Rana Gruber ASA

ANNUAL REPORT 2022 Rana Gruber’s operations involve iron ore mining and mineral processing to yield iron ore concentrates and specialised products. The products are based on natu- ral mineral resources which are upgraded and tailored for applications in multiple industries without the use of chemicals. All of Rana Gruber’s production is exported, mainly to European buyers. Rana Gruber has an annual production capacity of 1.8 mil- lion metric tons (mt) of iron ore concentrates (hematite and magnetite). In addition, the company produces a spe- cialised product, which is traded under the flagship brand COLORANA®. The company has about 300 employees. Rana Gruber controls five iron ore deposits located in the Dunderland Valley in Norway. In total, the com- pany has mineral rights connected to more than 23000000m 2 (5 700 acres). According to the resources and reserves estimate from November 2021, the com- pany possesses a vast resource base exceeding 444 mil- lion mt of iron ore. Of these 444 million mt of resources, 94 million mt have been classified as reserves. This is expected to ensure production for several decades. The processing plant and headquarters are located in Mo i Rana in the Nordland county. Rana Gruber was established in 1964, based on more than 200 years of min- ing experience. Through generations, the company has been a cornerstone for the development of the city of Mo i Rana, the local industry, and the local community. The creation of local jobs has attracted settlement, suppliers, and business in the region. Rana Gruber sup- ports a range of institutions and events related to sports, education, and cultural activ- ities, and has done so through decades. In addition, Rana Gruber has been important for the geographical development of the city with 2.51 million m 3 of tailings from the operations having been used to develop a large area close to the centre of Mo i Rana. RANA GRUBER IN BRIEF Rana Gruber is an iron ore producer located in the north of Norway. The company has one of the industry’s lowest carbon emissions per tonne produced, and aims to become the world’s first carbon free iron ore producer by the end of 2025. CONTENTS About ............................................................................. 2 Highlights ...................................................................... 4 Highlights 2022...................................................................................... 5 Key financial figures .............................................................................. 5 CEO letter ...................................................................... 6 Board of directors’ report ............................................ 8 Overview of the business ...................................................................... 9 Key events in 2022 .............................................................................. 10 Financial review ................................................................................... 12 Corporate governance......................................................................... 16 Corporate social responsibility ........................................................... 16 Employees and organisation ................................................................17 Natural environment ............................................................................17 Payments to governments ..................................................................17 Share and shareholder matters .......................................................... 18 Outlook ................................................................................................. 18 Declaration by the board of directors and CEO .................................. 19 Our business ............................................................... 20 Resources and mines .......................................................................... 24 Favourable logistics ............................................................................ 24 Products for a healthy world ............................................................. 25 Strategic priorities ............................................................................. 26 Strategic partnership for carbon free mining .................................... 28 Board and management ............................................. 32 The share .................................................................... 36 Corporate governance ................................................ 38 ESG ...............................................................................47 Highlights of 2022 ...............................................................................48 Sustainability reporting ......................................................................48 Materiality assessment and stakeholders .........................................50 Rana Gruber’s material topics ............................................................ 52 Goals and ambitions ............................................................................ 54 Climate ................................................................................................. 57 Nature .................................................................................................. 62 Resource utilisation ..............................................................................67 Decent working conditions ...................................................................71 Equality ................................................................................................ 74 Competence and development ............................................................ 77 Human rights ....................................................................................... 79 Safety ................................................................................................... 82 Local value creation ............................................................................ 84 Carbon accounts ....................................................................................88 Task Force on Climate-Related Financial Disclosures (TCFD) .......... 94 Equality statement..............................................................................112 Numbers and statistics ......................................................................117 GRI Universal Standards Index ......................................................... 122 Financial statements .................................................127 Primary financial statements ............................................................ 128 Notes to the financial statements ..................................................... 132 Auditor’s report ................................................................................. 163 Contact .......................................................................166 PRODUCTION SPLIT ■ Hematite ■ Magnetite ■ Colorana 94.0% 5.7% 0.3% Hematite: 1.6 million mt Magnetite: 98 000 mt Colorana: 5 500 mt 3 RANA GRUBER ANNUAL REPORT 20224 HIGHLIGHTS AND KEYFIGURES 20222021 CONCENTRATE PRODUCTION In thousand mt 1 652 1 728 20222021 EBITDA ■ EBITDA (NOK million) ■ EBITDA margin (%) 567.0 937.3 56.2% 39.8% 20222021 REVENUES NOKmillion 1 668.4 1 423.3 20222021 EARNINGS PER SHARE NOK 13.39 15.83 ■ Stable and strong production of 1 728 thousand metric tons ■ Good progress according to plan in zero carbon emissions project ■ Increased iron ore content in hematite product in line with Fe65 project ■ Successful uplisting to main list of Oslo Stock Exchange ■ NOK 6.16 per share distributed as dividend to shareholders Highlights 2022 Key financial figures Amounts in NOK million, except where indicated otherwise 2022 2021 Revenues 1 423.3 1 668.4 EBITDA 567.0 937.3 EBITDA margin (%) 39.8 56.2 Net profit 484.2 592.0 Adjusted net profit 391.8 499.5 Cash cost 835.9 775.3 Cash cost per mt produced (NOK) 482 468 EPS (NOK) 13.05 15.86 DPS (NOK) 6.16 11.05 Equity ratio (%) 57.0 51.5 For explanation of EBITDA, EBITDA margin, adjusted net profit, cash cost, and cash cost per mt produced, see appendix to the financial statements. RANA GRUBER ANNUAL REPORT 2022 5HIGHLIGHTS AND KEYFIGURES Letter from the CEO SHAPING THE FUTURE OF MINING Rana Gruber made good progress on several important indicators in 2022. The zero carbon project is on track. So is our other strategic projects. Towards the end of the year, the production reached record high levels. Oslo Stock Exchange gives us access to a broader inves- tor base. In the beginning of the year, the Rana Gruber share was uplisted to the main list. HIGH PRODUCTION The iron ore concentrate production ended at 1.73 million mt in 2022. This is the third highest production in the his- tory of Rana Gruber, and implies an increase of almost five per cent from 2021. This achievement was due to the continuous work to improve the capacity of the process- ing plant, but also the operational adjustments ensur- ing a more stable quality of the ore transported to the processing plant, which enables better utilisation of the plant. In a year with exceptionally high inflation and higher input costs, the high production has enabled only a slight increase in costs per tonne produced. STRATEGIC PROJECTS ON TRACK The world's steel producers are heading quickly in the direction of producing more sustainable steel. This puts pressure on the raw materials suppliers to deliver high grade iron ore with low carbon footprint. Our progress with increasing the minimum iron content in our hema- tite product to 65 per cent and removing CO 2 from our operations therefore enhances our market position going forward. SUSTAINABLE MINING Our focus on ESG impacts our operations. This has attracted attention, especially overseas. For the third year in a row, our direct and indirect greenhouse gas emis- sions per tonne produced iron ore are lower than those of the previous year. As we move from carbon-inten- sive machinery and transport to sustainable alternatives, we expect this figure to drop towards our zero emission goal. Some milestones in this respect were the signing of the letter of intent with Sandvik for the supply of electric machinery and support for the new on-site infrastructure, and the delivery of the first new drilling rig. In the past year, we have worked systematically with sustainability through risk assessments relating climate and the environment, human rights and decent working conditions, and equality and diversity. This is described in the ESG report included in this annual report. Our broad approach to sustainability is not only about becoming the world's first carbon free iron ore producer. It is also about taking social responsibility. We have extensive cooperation with trade unions, neighbours, and local industry. And we continue to be a cornerstone of the local community by supporting a wide range of local initiatives, sports teams, associations, individuals, and cultural events. FOCUS ON SAFETY We always target zero injuries related to the production, with tailored safety measures providing a healthy work environment at Rana Gruber. Sadly, there were two pro- duction-related injuries which led to short-term absence from work in 2022. Safety is our utmost priority, and we will continue to focus on the safety of our employees in the coming year. MARKET RECOVERY TOWARDS YEAR-END 2022 was an exceptional year, where both the devas- tating war in Ukraine and fluctuating markets affected us all. Raw materials prices have been highly volatile throughout the year, including prices for iron ore. The prices bottomed out at USD 79/mt in late October but recovered significantly towards year-end. The price increase was primarily due to the lifting of Covid-related restrictions in China, which is the world’s largest buyer of iron ore, combined with low stocks of both iron ore and steel in the country. It was also due to a lower pro- duction guiding from the larger iron ore players in Brazil and Australia. ATTRACTING TALENT We started insourcing of some workstreams in 2023. The insourcing is expected to reduce costs, improve cash flow predictability, and secure operational stability. It is pleasing to see that Rana Gruber attracts talent in a pressured labour market. RANA GRUBER ANNUAL REPORT 20226 LETTER FROM THE CEO “We expect to be able to continue to pay out solid dividends to our shareholders also in 2023.“ CONFIDENCE FOR THE NEW YEAR We are entering a new year with confidence and great progress. A highly positive production trend and pro- gress with strategic projects enabling higher prices for our products provide a promising foundation for 2023. Our continued focus on efficient operations enables a low financial leverage, which enables a strong cash gener- ation. This again enables us to fully fund capex through operations and to create value to our shareholders. In 2022, we were able to pay out NOK 228.8 million in div- idends, i.e. NOK 6.16 per share. We expect to be able to continue to pay out solid dividends to our shareholders also in 2023. Gunnar Moe CEO, Rana Gruber RANA GRUBER ANNUAL REPORT 2022 7LETTER FROM THE CEO Future rail transport will be either hydrogen- driven or electricity- driven. RANA GRUBER ANNUAL REPORT 20228 BOARD OF DIRECTORS’ REPORT BOARD OF DIRECTORS’ REPORT 2022 was an eventful year for Rana Gruber. In the beginning of the year, the Rana Gruber share was uplisted to the main list of Oslo Stock Exchange. Towards the end of the year, the production of the company reached record high levels. At the same time, the company made progress with the project to increase the minimum iron content in the hematite production. The company also made good progress with the project to increase the magnetite production, and the project to eliminate carbon emission from the operations. Overview of the business The board of directors’ report concerns Rana Gruber ASA (“Rana Gruber” or “the company”). BUSINESS AND LOCATION Rana Gruber is an iron ore producer established in 1964, with operations based on more than 200 years of mining experience. The company has about 300 employees, and the headquarter is in Mo i Rana. The company’s products are based on local natural mineral resources, which are upgraded and tailored for various applications in multi- ple industries, including steel production and the chemi- cal industry. The operations involve mining of both open-pit and underground mines, and take place at the company’s iron ore deposit, 32 kilometres north-east of Rana Gru- ber’s processing plant. The plant is located near Mo i Rana, with direct access to Rana Gruber’s own port and railway connection. The iron ore is transported from the mines to the processing plant by rail. PURPOSE, VISION, AND VALUES The company's objective is to produce and sell iron ore concentrates, and – through sustainable and economically sound business operations – create lasting and safe jobs in the company. Rana Gruber’s ambition is to be a force for change and a positive influence on society and the environment. Hence, the company has a goal to eliminate all carbon emissions from the production by the end of 2025, as the first iron ore producer in the global iron ore industry. The company has four core values: safe, responsible, proud, and brave. Together, these values make up the phi- losophy that guides the company’s employees, actions, and processes. PRODUCTS AND END-USERS Rana Gruber sells three products: hematite concentrate, magnetite concentrate, and the specialised product Colorana. The company has a strategic partnership with Cargill, which gives Rana Gruber support based on Cargill’s unique market insight and position as a globally leading commodity trader, including support to improve the qual- ity of the hematite product. Under this partnership agree- ment, Cargill is also committed to buy and market all of Rana Gruber’s hematite. This amounts to more than 90 per cent of the company’s total production. Currently, the hematite is distributed to three European steel produc- ers, which utilise the product to make steel. Steel again is used for a variety of end products, such as cars, buildings, and infrastructure. Chemical-free magnetite iron oxide concentrates are used in a variety of products, such as water purification and cosmetics. The end markets for magnetite are within the chemical industry, which yields premium prices com- pared to the steel industry. Rana Gruber has a produc- tion capacity of 1.8 million metric tons (“mt”) of iron ore concentrates (hematite and magentite). Customers for Colorana are within a diverse group of industries or market segments, such as concrete, paint, plastics, the automotive industry, heat management, and toner production. RANA GRUBER ANNUAL REPORT 2022 9BOARD OF DIRECTORS’ REPORT Key events in 2022 PRODUCTION GROWTH Rana Gruber’s production of iron ore concentrate in 2022 was the third highest production in the history of the com- pany. In thousand metric tons 2022 2021 Production concentrate 1 728 1 652 Production hematite 1 630 1 545 Production magnetite 98 108 Production Colorana 5.5 5.3 Production ore 5 127 5 150 Production underground (ore) 2 648 2 767 Production open-pit (ore) 2 479 2 383 Production open-pit (waste rock) 4 536 4 909 Iron ore concentrate production totalled 1 728’ mt, which implies an increase of 4.5 per cent from 2021. The pro- duction increase was partly due to the continuous work to improve the capacity of the processing plant. It was also due to operational improvements ensuring a more stable quality of the ore transported to the processing plant, which enables better utilisation of the plant. The majority of the produced volume was hematite con- centrate, which increased to 1 630’ mt in 2022. In addi- tion, 98’ mt of magnetite concentrate, and 5.5’ mt of Colorana were produced in 2022. The magnetite production decreased 9.1 per cent from 2021. The decrease was due to less magnetite content in the ore extracted, as a consequence of inherent natural variations in the ore body. PROGRESS WITH STRATEGIC PROJECTS The company made good progress with its strategic development projects in 2022. The completion of these projects is expected according to plan. The aim of the first project is to increase the minimum iron content in the hematite product to 65 per cent. To achieve this, the company has initiated several meas- ures. Firstly, the company does considerable R&D work to find the optimal production method, so that not much production volume is sacrificed for higher iron ore con- tent. Secondly, the company is upgrading the processing plant based on the R&D work. The final measure in this project is preparing the market to receive the improved product. The initial results from these measures have been promising and the product quality has improved since the summer. When the upgrade of the processing plant is finalised, the company expects to take the last few steps and produce hematite with an iron content of at least 65 per cent. This is expected to happen before the end of 2024. And once the steel mills have approved of the product quality, the company can negotiate the contractual terms and base the pricing of the hematite concentrate to the premium price index, Platts Fe65%. This is expected to happen during 2025. The aim of the second project is to increase the magnet- ite production. To this end, the company has completed the design of the processing plant and planned the organising of the upgrade. The next step is to order the equipment needed. This is part of the integrated process to upgrade the processing plant, which will also enable the company to increase the minimum iron content in the hematite product. The completion of this project will enable Rana Gruber to exploit the high demand for its chemical free magnetite concentrate, which will provide solid revenues and security in times with less demand for hematite. The plan is to increase today’s magnetite production volume by 50 per cent. The company expects to achieve this before the end of 2024. The aim of the third project is to eliminate carbon emis- sions from the production. One may divide the company’s execution plan into three parts: that which concerns the underground mine, that which concerns the open-pit mine, and that which concerns the rail transport. For the under- ground mine, the company has started the gradual pro- cess of replacing equipment. In November, the company signed a letter of intent with the electric mining machin- ery supplier, Sandvik, which will supply battery-pow- ered machines and help Rana Gruber adapt and organise the operations to make best use of the new machines. The company has also started the planning of the on-site infrastructure needed for electrified operations. The new infrastructure will involve both an efficient charg- ing structure and safety measures. The company works closely with external advisors and suppliers to identify and plan the best solution for the on-site infrastructure. For the open-pit mine, the production in Ørtfjell will con- tinue with today’s operations facilities until the company has exhausted the reserves of the deposit in 2024. Future open-pit production in the Stensundtjern deposit will be carbon free. But the company has not yet decided whether it will operate the Steinsundtjern mine with in-house per- sonnel or if it will make use of external providers. For the rail transport, there is an on-going project with Sintef and other players to investigate the pros and cons of electric- ity-based solutions and hydrogen-based solutions. Their recommendation is expected to be finalised in the first half of 2023. The completion of this project will enable Rana RANA GRUBER ANNUAL REPORT 202210 BOARD OF DIRECTORS’ REPORT Gruber to replace an annual consumption of five million litres of diesel with electric power. Carbon free operations are also expected to reduce operating costs and enable a future price premium for Rana Gruber products. The com- pany expects to be carbon free before the end of 2025. UPLISTING TO THE MAIN LIST OF OSLO STOCK EXCHANGE In March, the company’s share was uplisted to the main list of Oslo Stock Exchange. This gave Rana Gruber access to a deeper and global investor base. Being the first non-bank company from the Nordland county to be on the main list, the uplisting marked an important mile- stone not just for Rana Gruber, but also for the entire business community in Northern Norway. EVENTS AFTER THE BALANCE SHEET DATE On 14 February 2023, the board of directors decided to pay out a dividend of NOK 3.00 per share for the fourth quarter of 2022, or approximately NOK 111.3 million in total. The company has secured forward contracts under which Rana Gruber will sell 450 000 mt in the second quarter of 2023 to the first quarter of 2024 at an aver- age price of USD 121.29/mt. The swap contracts relate to physical shipments in the first quarter of 2023 to the fourth quarter of 2023. Final financial settlement of these shipments will be connected with the swap contracts. The iron ore concentrate production in 2022 was the third highest production in the history of Rana Gruber. RANA GRUBER ANNUAL REPORT 2022 11BOARD OF DIRECTORS’ REPORT Financial review All amounts in brackets are comparative figures for 2021 unless otherwise stated. ACCOUNTING POLICIES The financial statements for Rana Gruber ASA are pre- pared in accordance with the International Financial Reporting Standards (IFRS) as endorsed by the EU. GOING CONCERN The financial statements for Rana Gruber ASA have been prepared and presented based on the going con- cern assumption, and in accordance with section 3-3 of the Accounting Act. The board of directors confirms that the use of the going concern assumption is appropriate. STATEMENT OF COMPREHENSIVE INCOME Total revenues for 2022 came in at NOK 1 423.3 mil- lion, compared with NOK 1 668.4 million in 2021. The decrease in revenues is explained by the lower average market prices for iron ore in 2022 compared to 2021. In 2022, cash cost increased to NOK 835.9 million (NOK 775.3 million). The increase was due to inflationary pres- sure on wages, higher input costs (related to e.g. diesel, explosives, and steel), expansion of the company’s per- sonnel for administration and development work, and the one-off costs related to the company’s financial contribu- tion to the new Polarsirkelen Airport in Mo i Rana, and the uplisting of the Rana Gruber share to the main list of Oslo Stock Exchange. EBITDA ended at NOK 567.2 million (937.3 million). The decrease from 2021 was due to the decrease in rev- enues combined with the increase in cash cost, as described above. Net financial items of positive NOK 228.4 million con- sisted of NOK 61.2 million losses from currency hedges, NOK 53.2 million gains from hedging of iron ore, NOK 20.5 million gains from currency adjustments related to accounts receivable and bank accounts, NOK 2.0 mil- lion in net interest expenses, and NOK 217.8 gains from hedging of electric power. At year-end, the company had secured 240 000 mt of the hematite production at an average of USD 140/mt. See note 23.2 for more details about the forward contracts. The management continuously assesses the company’s portfolio of hedging positions based on dialogue with and input from customers, partners, industry experts, and analysts. The hedging positions shall contribute to a sus- tainable and stable cash flow, enabling future investments and compliance with the company’s dividend policy. As stated in the hedging policy, hedging positionsin iron ore can cover a maximum of 50 per cent of the annual production volumes, and can be divided into positions for a duration of two years. At 31 December 2022, the company had four flexi- ble currency hedging positions of a potential monthly impact of USD 11 million until April 2023, USD 8 million until July 2023, and USD 4 million for the remainder of 2023. See note 23.1 for further information about the hedging portfolio. In sum, this resulted in a profit for the year of NOK 484.2 million (NOK 591.0 million). This corresponds to earnings per share (EPS) of NOK 13.05 (NOK 15.86). STATEMENT OF FINANCIAL POSITION Rana Gruber had total assets of NOK 1 445 million at 31 December 2022, up from NOK 1 130 million at the end of 2021. Total non-current assets amounted to NOK 652.4 mil- lion, up from 573.0 million at 31 December 2021, of which the largest items include mine properties, prop- erty, plant, and equipment of NOK 491.4 million. The increase was due to investments related to the new mining level (L91), investments related to Fe65, and new leasing agreements for machines. Total current assets amounted to NOK 792.6 million, up from NOK 556.7 million at 31 December 2021, including invento- ries of NOK 159.9 million. The increase is related to positive fair value on forward contracts and higher inventory. Trade receivables were NOK 178.7 million at 31 December 2022, up from NOK 63.1 million at the end of 2021. The increase is explained by nIncreased provisional pricing elements due to increased prices by the end of the year. The capex for the year totalled NOK 161.7 million (NOK 125.7 million), of which NOK 97.9 million was development capex, mainly related to the new mine level and tangi- ble assets to be used in the strategic development pro- ject to increase the minimum iron content in the hematite concentrate from 63 to 65 per cen. NOK 63.8 million was related to other investments incluidng machines, building improvements etc. Non-current liabilities, which mainly constitutes leasing debt and deferred tax liabilities, totalled NOK 260.5 RANA GRUBER ANNUAL REPORT 202212 BOARD OF DIRECTORS’ REPORT million at 31 December 2022, up from 130.5 million at 31 December 2021. The increase is related primarily to Increase in deferred taxes. Total current liabilities were NOK 361.5 million at 31 December 2022, down from 417.4 million at 31 December 2021. The decrease is primarily explained by reduction in other current liabilities and current tax payables. Total equity ended at NOK 823.1 million at 31 December 2022, up from NOK 581.8 million at 31 December 2021. This represents an equity ratio of 57.0 per cent (51.5 per cent). The increase is explained mainly by a positive net profit of the year. Given the economic outlook for the industry, the board believes that the capitalised assets will ensure a satis- factory return on capital for Rana Gruber. STATEMENT OF CASH FLOWS Operating activities generated a cash flow of NOK 383.6 million for 2022 (NOK 868.4 million). The decrease was driven mainly by decreased profit and increased work- ing capital and the effect from unsettled derivatives. Depreciation and amortisation for 2022 amounted to NOK 158.7 million, compared to NOK 174.2 million in 2021. Investment activities generated a negative cash flow of NOK 161.7 million. These cash flows consist of expendi- tures on mine development of NOK 96.0 million and expenditures on property, plant, and equipment of NOK 65.7 million. Financing activities generated a negative cash flow of NOK 273.4 million (NOK 637.4 million). During 2022, Rana Gruber paid out total dividends through quarterly distributions of NOK 228.8 million (NOK 412.6 million), equating to NOK 6.16 (11.05) per share. Cash and cash equivalents amounted to NOK 212.8 mil- lion at 31 December 2022, down from NOK 264.4 mil- lion at the end of 2021. In addition, the company has an unused credit facility of NOK 100 million. ALLOCATION OF NET PROFIT Rana Gruber ASA had a profit for the year of NOK 484.2 million. The board decided to transfer the profit for the year to other equity, after paid dividends in 2022. DIVIDENDS In 2022, Rana Gruber distributed total dividends of NOK 228.8 million, corresponding to NOK 6.16 per share. Ex. date Dividend per share (NOK) 14 November 2022 1.05 26 August 2022 1.51 16 May 2022 2.09 15 February 2022 1.51 According to the company’s dividend policy, the adjusted net profit shall constitute the IFRS based net profit after tax, adjusted for unrealised gains and losses from the portfolio of hedging positions related to iron ore and currency. The relevant hedging positions are those related to shipments initiated in the quarter of reporting for which the final price is concluded in the subsequent quarter. From the fourth quarter of 2022, unrealised positions of electric power is included in the net finan- cial income and adjusted for in the adjusted net profit. The board has the flexibility to utilise approximately 30 per cent of the estimated dividend payments to repur- chase Rana Gruber shares for subsequent redemption and reduce the dividend payments correspondingly. Any buyback program to achieve the same purpose for future quarters will be announced separately. The board’s dividend decisions take into account legal restrictions, capital expenditure plans related to announced strategic projects, financing requirements, and fluctuations in the markets in which the company oper- ates. RESEARCH AND DEVELOPMENT Research and development (R&D) is a key part of Rana Gruber’s day-to-day operations. The company has a dedicated R&D department with six employees. In 2022, salary payments to employees at the R&D department amounted to NOK 4.5 million (NOK 3.8 million). In addi- tion to these costs, Rana Gruber invests significant amounts related to the company's strategic projects. The commitment to R&D laid the basis for increased development activity, and the company’s three strate- gic development projects will require increased R&D investments. RANA GRUBER ANNUAL REPORT 2022 13BOARD OF DIRECTORS’ REPORT RISK MANAGEMENT Rana Gruber is subject to several risks, which may affect the company’s operations, performance, finances and share price. These risks are monitored by the corporate management and reported to the board on a regular basis. Risk management is not about eliminating risk but taking the right risk based on the company’s competence, cap- ital adequacy, and development plans. The aim of risk management is to identify threats and opportunities for the company, and steering risk towards an acceptable level, so that there is a reasonable certainty that the company’s targets will be met. The board holds that the financial statements for the year provide an accurate picture of the company’s assets and liabilities, financial position, and profit, at 31 December 2022. Below is a summary of the key risks for the company. See note 23 for a more detailed description of the com- pany’s financial and market risks. Regulatory risk Rana Gruber is dependent on permits and registration to carry out its operations, and there is a risk that such permits and registration may be withdrawn, amended, or not renewed. The company is subject to several general and indus- try-specific laws, regulations, and permits in relation to its business. The company’s activities are regulated under the Norwe- gian Minerals Act (relating to the extraction and acqui- sition of mineral resources). Rana Gruber has a permit from the Norwegian Environment Agency for deposition of waste from the production, which was issued in 2012 (updated 2015). The Norwegian government has announced a strong commitment to support the Norwegian mining industry. However, there is a regulatory risk related to the design of the new government’s mining policies, especially when it comes to deposition permits. Furthermore, local and global taxation of carbon emis- sions might impact the business. But the company’s aim is to eliminate all carbon emissions from the production by the end of 2025. The regulatory risk related to CO 2 taxation will depend on the extent to which the decar- bonisation target is met. The regulatory risk is managed through close dialogue with policy makers, at a regional and national level, in addition to involvement and engagement through important trade organisations, such as the Norwegian Mineral Industry. Financial and market risk Decreases in iron ore prices and increases in freight prices may have a material adverse effect on Rana Gru- ber’s results, profitability, and financial position. The prices of iron ore and freight are concluded every day based on the global supply and demand. Rana Gruber’s business is also subject to currency and exchange rate risk, since the majority of the company's products are sold in USD, most of its specialised prod- ucts are sold in EUR, and most of its costs are denomi- nated in NOK. In addition, the company is subject to risks related to the prices of inputs, including the prices of electric power. The company has hedging positions related to prices of iron ore, USD, and electric power. The purpose of the hedging positions is to mitigate risks and secure a sus- tainable and stable cash flow. This enables investments and compliance with the company’s dividend policy. The iron ore extracted from the mines is transported by rail to Rana Gruber's processing plant. This is done on a public railway line and is subject to a transport tax set by the authorities. The determination of this fee repre- sents a risk for the company. There is also uncertainty related to when and to what extent carbon free hematite concentrate will give price premium and additional revenue which offsets the investment costs. Operational risk All mining and mineral processing activities are exposed to operational risk, and any events imposing risk to critical production-relevant equipment and infra- structure must be mitigated. To reduce the probability of critical production disturbances, the equipment and infrastructure are well maintained in accordance with detailed maintenance plans. The company also has sub- stantial amounts of spare parts for critical equipment on-site. Rock-stress in the underground mining operations is closely monitored and handled by rock-support meas- ures. Furthermore, multiple operational mining locations reduce the risk of severe ore production disturbance. RANA GRUBER ANNUAL REPORT 202214 BOARD OF DIRECTORS’ REPORT Rana Gruber conducts advanced R&D work. RANA GRUBER ANNUAL REPORT 2022 15BOARD OF DIRECTORS’ REPORT Hacking and cybercrime represent an operational risk. Therefore, the IT system and network for process con- trol is set up as a separate network without internet access, which reduces the risk of external attacks. Long-term challenges following climate change might affect the company’s operations, as more extreme weather can increase the risk of flooding and landslides. The company considers several measures to meet these challenges. Business risk The company is dependent on a few key suppliers and contractors which subject the company to, among oth- ers, risks of delays in deliveries and production, disrup- tion in operations, and increased costs. The company is highly dependent on its agreement with Cargill International Trading Pte Ltd, which has agreed to purchase Rana Gruber’s entire production of hematite concentrate. There are risks related to the estimation of ore reserves, as well as risks related to metallurgical sampling. In particular, there is a risk that measured, indicated, and inferred mineral resources cannot be converted into mineral reserves. Rana Gruber’s business may lead to pollution and dam- age to the environment, which may expose the company to negative attention, and thereby harm the company's reputation. Corporate governance Good corporate governance provides the foundation for long-term value creation, to the benefit of shareholders, employees, and other stakeholders. The board of direc- tors of Rana Gruber has established a set of governance principles to ensure a clear division of roles between the board of directors, the executive management, and the shareholders. The principles are based on the Norwe- gian Code of Practice for Corporate Governance. Following the uplisting to the main list at the Oslo Stock Exchange, Rana Gruber is subject to corporate govern- ance reporting requirements under section 3-3b of the Norwegian Accounting Act and the Norwegian Code of Practice for Corporate Governance, cf. section 4.4 of the Oslo Stock Exchange Rule Book II. The Norwegian Accounting Act may be found (in Norwe- gian) at lovdata.no. The Norwegian Code of Practice for Corporate Governance may be found at nues.no. Rana Gruber follows the Norwegian Code of Practice for Cor- porate Governance, and the company’s practice is in accordance with these recommendations. In 2022, Rana Gruber has carried out a due diligenc assessment of the value chain, in line with the require- ments of the Transparency Act, which entered into force on 1 July 2022. The board of directors has approved of the plans for further work with the Act, and the company will deliver a report by the end of June 2023. The annual statement on corporate governance has been approved by the board and can be found on pages 38 to 46. Corporate social responsibility Rana Gruber is required to report on its corporate responsibility and selected related issues under section 3-3a and section 3-3c of the Norwegian Accounting Act. Rana Gruber has chosen to report on its efforts related to the environment, social matters, and corporate gov- ernance, which is described in the ESG report and approved by the board of directors. EQUALITY AND ANTI-DISCRIMINATION Rana Gruber is committed to providing equal oppor- tunities for all employees in an inclusive work culture. Rana Gruber appreciates and acknowledges that every individual is unique, valuable, and should be respected for his or her individual abilities. The company does not accept any form of harassment or discrimination based on gender, religion, race, national or ethnic origin, cul- tural background, social group, disability, sexual orienta- tion, marital status, age, or political opinion. The company seeks to provide equal employment oppor- tunities and treat all employees and job seekers fairly. RANA GRUBER ANNUAL REPORT 202216 BOARD OF DIRECTORS’ REPORT Rana Gruber is subject to the requirement to provide an annual equality statement describing the company's efforts to secure equal opportunities under section 26-a in the Norwegian Equality and Anti-Discrimination Act. The annual equality statement can be found on pages 112 to 116. Employees and organisation The company had 286 permanent employees and 14 apprentices at 31 December 2022. In addition, Rana Gru- ber employed 12 temporary workers for operational pro- ject posts related to the new mining level, or to replace absence related to holiday, parental leave, and sick leave. In total, the company had 312 full time employees, corresponding to 307.24 man-years. CHANGES TO THE EXECUTIVE MANAGEMENT AND BOARD OF DIRECTORS The five shareholder-elected directors of the board were elected at the ordinary general meeting at 11 March 2021 for a period of two years. The three employ- ees-elected directors were elected in November 2022, also for a period of two years. The board consists of Morten Støver (chair), Kristian Ado- lfsen, Frode Nilsen, Ragnhild Wiborg, Hilde Rolandsen, Henriette Zahl Pedersen (worker director), Johan Hovind (worker director), and Lasse Strøm (worker director). According to the articles of association, the board of direc- tors of the company shall have three to eight members. The management team consists of CEO Gunnar Moe, CFO Erlend Høyen, COO Stein Tore Liljenström, and HR Direc- tor Anita Brattaas Mikalsen. INSURANCE The company has a board liability insurance covering the entire board and the CEO. INJURIES, ACCIDENTS, AND SICK LEAVE There were two production-related injuries in 2022 which led to short-term absence from work. Both inci- dents were handled according to procedure. The company is constantly working with ensuring safety measures in all parts of the production, and promoting a healthy work environment at Rana Gruber. The company had a total sick leave percentage of 7.48. Natural environment Rana Gruber has a permit from the Norwegian Environ- ment Agency for deposition of departure/waste masses from the production, which was issued in 2012 (updated 2015). The permit involves restrictions on discharges to water and soil, and to emissions to air. The company does its utmost to meet the threshold limit values in the permit. Good routines are in place to monitor dis- charges/emissions to ensure that negative environmen- tal effects are prevented or reduced. The company collaborates with partners and authori- ties to apply the best solutions for marine deposition in the Rana Fjord. The company also collaborates closely with both the Rana local authority and other industrial companies in the area to monitor the water quality in the Rana Fjord and the air quality in Rana. Please refer to the ESG report for further details on cli- mate and the environment. Payments to governments The company has assessed its relations with, and pay- ments to and from, governmental institutions, in accord- ance with section 3-3d of the Norwegian Accounting Act (and section 5-5a of the Norwegian Securities Trading Act). For more information, please see note 3.22 to the financial statements. RANA GRUBER ANNUAL REPORT 2022 17BOARD OF DIRECTORS’ REPORT Share and shareholder matters Rana Gruber’s shares are traded on the Oslo Stock Exchange under the ticker “RANA”. During 2022, the share traded between NOK 38.75 and NOK 67.24 per share, with a closing price of NOK 51.1 at 31 December 2022. At 23 February 2022, the company completed a buyback program of Rana Gruber shares. After approval by the shareholders at the general meeting on 22 March, the company deleted 306 908 treasury shares on 27 May. Following the share capital reduction, the share capital of Rana Gruber ASA is NOK 9 271 273 divided into 37 085 092 shares. At 31 December 2022, the company had a total of 6 398 shareholders, of which the 20 largest held 59.1 per cent of the total 37 085 092 issued shares. Rana Gruber has one share class, and all shares have equal rights in the company. The shares are registered in the Norwegian Central Securities Depository (VPS). The company's registrar is DNB Markets. The shares carry the securities number ISIN NO0010907389. Rana Gruber’s annual general meeting for 2023 is planned to be held on 12 April 2023. Outlook The long-term market outlook remains positive. In the short-term, the market demand may be more volatile due to the turbulent global economic situation. Rana Gruber plans investments related to the compa- ny’s ongoing strategic projects – the Fe65 project, the M40 project, and the zero carbon emissions project. The capex related to these projects will increase in the com- ing years. The company will not finance these projects with either new interest-bearing debt or share issues. The company plans to finance the projects with earnings from operations and lease obligations for vehicles and mobile machinery. The zero carbon emissions project is also expected to be subject to governmental support. The company is in close dialogue with Enova regarding the project. The completion of these projects is expected to contribute to solid product margins and be within the previously communicated time frame. In the board of directors’ report for 2021, the board expressed its belief that the production in 2022 would continue on the same level as in 2021. In fact, the pro- duction in 2022 exceeded the expectations of the board and ended at 1 728’ mt, which is 4.5 per cent higher than in 2021. Rana Gruber’s production is expected to remain stable in 2023. With stable production, vast resources, strategic off-take agreement with Cargill, a solid financial position, and investments in strategic projects, the outlook for Rana Gruber remains positive. Mo i Rana, Norway, 15 March 2023 The board of directors and CEO – Rana Gruber ASA Morten Støver Kristian Adolfsen Frode Nilsen Ragnhild Wiborg Hilde Rolandsen Chair Director Director Director Director Henriette Zahl Pedersen Johan Hovind Lasse Strøm Gunnar Moe Director Director Director CEO RANA GRUBER ANNUAL REPORT 202218 BOARD OF DIRECTORS’ REPORT Declaration by the board of directors and CEO We hereby confirm that, to the best of our knowledge, the annual financial statements for 1 January to 31 December 2022 have been prepared in accordance with applicable accounting standards and that the information in the financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the company. We confirm that the financial statements give an accurate and fair view of the development, profit, and position of the company, as well as a description of the principal risks and uncertainties it is facing. Mo i Rana, Norway, 15 March 2023 The board of directors and CEO – Rana Gruber ASA Morten Støver Kristian Adolfsen Frode Nilsen Ragnhild Wiborg Hilde Rolandsen Chair Director Director Director Director Henriette Zahl Pedersen Johan Hovind Lasse Strøm Gunnar Moe Director Director Director CEO RANA GRUBER ANNUAL REPORT 2022 19BOARD OF DIRECTORS’ REPORT Rail transport of iron ore from the mines to the processing plant. RANA GRUBER ANNUAL REPORT 202220 OUR BUSINESS OUR BUSINESS The favourable location of Rana Gruber’s deposits enables an energy-efficient logistics. The deposits are located only 32 kilometres from the processing plant and port. The deposits are also higher above the sea level. This enables short downhill transport of the ore to the processing plant and requires minimal amounts of energy. The mineral processing facility is electricity-driven, and highly efficient and optimised. This results in a low carbon intensity. The mineral extraction process is totally chemical free, and the mining operations, logistics, and processing capabilities are state-of-the- art. Rana Gruber’s operations consist of three separate activities: ■ Mining of iron ore from local open-pit and underground mines ■ Rail transport of iron ore from the mines to the processing plant ■ Extraction of hematite and magnetite in the processing plant, and production of Colorana. The company operates at the beginning of the value chain for the ferrous industry. After the production of iron ore concentrate and Colorana, the products are shipped to different industries, mainly to steel pro- ducers, water treatment chemicals producers, and paint producers. VALUABLE MINERALS Iron ore is an essential component for the global steel industry. Steel made from iron ore is used for construction, automobile manufacturing, and other industrial applications. Rana Gruber produces and sells iron ore concentrate mainly to European steel mills. China is one of the largest drivers of the global demand for iron ore. RANA GRUBER ANNUAL REPORT 2022 21OUR BUSINESS OPEN-PIT MINE Excavated using one or more horizontal benches OUR RESOURCES AND MINES UNDERGROUND MINING Ore from the underground operations is transported by truck to the underground crushing station TRANSPORTATION TO CRUSHER Ore transported by trucks UNDERGROUND SILO Here the crushed ore is mixed and loaded directly from the silo to rail wagons for further transport FROM SILO TO RAIL WAGONS Unique and efficient process using gravity to load ore directly from underground silos to rail wagons UNDERGROUND CRUSHING STATION CRUSHING STATION Above the underground silo HYDRO-ELECTRIC POWER Powering the mining process CONVEYOR BELTS LOGISTICS Shipping Processing plant Mines Stensundtjern Ørtvann Ørtfjell Finnkåteng Railway connected to Bane Nor Railway connected to Bane Nor 2 km 6 km 34 km RANA GRUBER ANNUAL REPORT 202222 OUR BUSINESS OPEN-PIT MINE Excavated using one or more horizontal benches OUR RESOURCES AND MINES UNDERGROUND MINING Ore from the underground operations is transported by truck to the underground crushing station TRANSPORTATION TO CRUSHER Ore transported by trucks UNDERGROUND SILO Here the crushed ore is mixed and loaded directly from the silo to rail wagons for further transport FROM SILO TO RAIL WAGONS Unique and efficient process using gravity to load ore directly from underground silos to rail wagons UNDERGROUND CRUSHING STATION CRUSHING STATION Above the underground silo HYDRO-ELECTRIC POWER Powering the mining process CONVEYOR BELTS LOGISTICS Shipping Processing plant Mines Stensundtjern Ørtvann Ørtfjell Finnkåteng Railway connected to Bane Nor Railway connected to Bane Nor 2 km 6 km 34 km RANA GRUBER ANNUAL REPORT 2022 23OUR BUSINESS Resources and mines Rana Gruber operates its own mines with iron ore deposits. The mines are located 32 kilometres northeast of the city Mo i Rana in Norway, in Storforshei and Ørt- fjell in the Dunderland Valley. The iron ore mining takes place at the company’s iron ore deposits at Ørtfjell in both open-pit and underground mines. Rana Gruber’s processing plant is also located near Mo i Rana, more precisely in Gullsmedvik, with direct access to the com- pany’s own port and railway connection. The ore estimate from November 2021 shows that the company possesses a vast resource base exceeding 444 million metric tons. Of these 444 million metric tons of resources, 94 million metric tons have been classified as reserves. The company has an on-going exploration drilling pro- gram to expand the resource and reserve bases. More detailed knowledge of the geological and physical prop- erties of the rock masses also provides more precision in the long-term mine plan. The exploration drilling was previously handled by external providers but is now car- ried out in-house. The Ørtfjell deposit is Rana Gruber’s main deposit and located on the company’s own property. It is connected to the existing infrastructure, including silo, crusher, rail- way, and a network of roads. The deposit contains 72 per cent of the company’s total resources and 69 per cent of the reserves and will be mined for several decades. There are three smaller deposits in areas called Finn- kåteng, Ørtvann, and Stensundtjern. The company also has exploration licence in one further deposit, in an area called Dunderland, outside of the company’s property. Start of mining at the Stensundtjern deposit is expected in the next few years. Favourable logistics Rana Gruber benefits from the advantageous topogra- phy of its production sites. The logistics, mining, and processing is largely based on gravity, which enables energy-efficient operations. ORE LOADED DIRECTLY FROM SILO TO RAIL WAGONS Efficient process uses gravity to load ore directly from underground silo to rail wagons. CONNECTION TO PUBLIC RAILWAY Fully loaded rail wagons connect directly to the pub- lic railway (Nordlandsbanen) and move to the process- ing plant. The processing plant is located lower in the landscape than the mines, enabling a transportation of iron ore that requires minimal amounts of energy. Rail- way maintenance is covered by the state enterprise (Spordrift). SHORT DISTANCE TO PROCESSING PLANT The processing plant is located only 32 km from the mines. PROCESSING The processing plant is integrated with the shipping location at Rana Gruber’s own port. LOADING Products are loaded on vessels at Rana Gruber’s own ice-free port terminal. Most products are sold to cus- tomers free on board. SHIPPING AND TRANSPORT Every month, two or three Panamax vessels are loaded with hematite, and two or three short sea vessels are loaded with magnetite. The Colorana® iron oxide pig- ments are packed into bags and placed on pallets for dispatch via truck or a combination of truck and rail transport to the final customer. RANA GRUBER ANNUAL REPORT 202224 OUR BUSINESS Products for a healthy world Rana Gruber has three products: hematite, magnetite, and the specialised product Colorana. Of these, hematite constituted 94 per cent of the total production in 2022. Hematite Hematite is used in metal- lurgical applications. Key customers are large steel manufacturers, mainly in Europe. Rana Gruber has an off-take agreement with Cargill until 2030 for its entire hematite production, in which Cargill assists the company with sales, market- ing, technical support, prod- uct development, and risk management. The end mar- ket is that of processed steel to, among other things, build- ings, infrastructure, and the automotive industry. The demand drivers for hematite are largely associated with infrastructure projects, con- struction, and the automo- tive industry. Magnetite Magnetite from Rana Gruber is a chemical-free iron oxide concentrate. Key customers for the magnetite concen- trates are within the chem- ical industry, mostly the European water purification industry. Rana Gruber has a leading position in this market. In addition to water treatment, the magnetite concentrates are applied in a variety of products, such as cosmetics. The company has announced a strategic initiative to increase the production of magnetite, following increased demand and pre- mium pricing. Colorana ® The specialised product Colorana is based on mag- netite concentrate and is used both for colorants and highly advanced products such as brake linings, mag- netic stripes, and chemical processes. Customers are located all over the world and are within a diverse group of industries or mar- ket segments, such as con- crete, paint, plastics, the automotive industry, heat management, and toner pro- duction. The demand for Col- orana depends on growth within the above range of industries and markets. RANA GRUBER ANNUAL REPORT 2022 25OUR BUSINESS Strategic priorities Rana Gruber has three major strategic development pro- jects. ON TRACK TO ZERO CO 2 EMISSIONS Today, Rana Gruber has among the industry’s lowest carbon emissions. The ambition is to go even further and eliminate all carbon emissions by the end of 2025. There are four reasons for the company to become car- bon free. ■ Social responsibility. The steel industry is responsible for seven to eight per cent of global carbon emissions. Rana Gruber wants to pave the way for the industry and become the world’s first carbon free iron ore producer. ■ Cost reduction. Replacing an annual consumption of 5 million litres diesel with renewable power will be cost saving. ■ Price premium. Iron ore concentrate which is produced in a more sustainable way will help the steel mills to reach their emission goals. This is expected to give sustainably produced iron ore a price premium. ■ Investment attractivity. Being compliant to future expectations will make Rana Gruber a more attractive investment. One of the company’s advantages for achieving an indus- try-leading carbon footprint is the location of the depos- its. They are located close to the processing plant and port. The deposits are also higher above the sea level. This enables a short downhill railway transport of the ore, which requires minimal amounts of energy. In addi- tion to this, Rana Gruber is located in an area with good access to renewable power. Becoming carbon free includes substitution of fossil energy-powered mobile machinery and rail transport to sustainable alternatives. The mining equipment, vehicles, railway, and underground mine heating facility will be electrified, or else replaced with a non-fossil fuel alter- native. This is a difficult challenge, as the machinery needs to handle large and heavy masses of iron ore. The compa- ny’s execution plan has three parts: that which concerns the underground mine, that which concerns the open-pit mine, and that which concerns the rail transport. For the underground mine, a gradual process of replac- ing equipment is on-going. The same applies to the plan- ning of the on-site infrastructure needed for electrified operations. The new infrastructure involves both an effi- cient charging structure and safety measures. This work is done in close cooperation with external advisors and suppliers to identify and plan the best solutions. For the open-pit mine, the production in Ørtfjell will con- tinue with today’s operations facilities until the com- pany has exhausted the reserves of the deposit in 2024. Future open-pit production in the Stensundtjern deposit will be carbon free. But the company has not yet decided whether it will operate the mine with in-house personnel or if it will make use of external providers. For the rail transport, there is an on-going project with Sintef and other players to investigate the pros and cons of electricity-based solutions and hydrogen-based solu- tions. Their recommendation is expected to be finalised in the first half of 2023. Rana Gruber desires to be at the forefront of sustainable mining. GETTING READY FOR FE65 The market prices for hematite concentrate depend on the iron content in the shipped products. The demand and prices are higher for hematite with higher iron con- tent. The higher demand is due to environmental advan- tages with higher iron content, and the environmental responsibilities facing the steel industry. Most European steel mills aim to reduce emissions by around 30 per cent before 2030, and to be carbon neutral before 2050. Hematite with higher iron content will enable steel mills to use less hematite concentrate in their production, which again leads to less carbon emissions and waste. This is why Rana Gruber wants to increase the minimum iron content in the hematite product from around 63 per cent to 65 per cent. Considerable R&D work is done to find the optimal pro- duction method, so that production volumes are stable on a high level although the iron content increases. The company also works to upgrade the processing plant, based on this R&D work. Another measure in this project is preparing the market to receive the improved product. The pricing based on the Platts Fe65% index depends on approval of the product quality by the steel mills that receive it. Once the steel mills receiving the iron ore produced by Rana Gruber have approved of the product RANA GRUBER ANNUAL REPORT 202226 OUR BUSINESS quality, the contractual terms can be negotiated, and the pricing can be based on the Platts Fe65% index. This is expected to happen during 2025. INCREASING MAGNETITE PRODUCTION VOLUMES M40 is a unique, natural, chemical free, high-grade mag- netite concentrate with demand exceeding the supply. The target is to increase the M40 volume by 50 per cent. Rana Gruber’s magnetite concentrate is sold to Euro- pean chemical producers, mostly the European water purification industry. There are two reasons why the company wants to increase its magnetite production. The first reason is that there is a high demand for the magnetite. Magnet- ite is usually utilised in steel production. But since Rana Fossil fuel-powered machinery will be replaced with non-fossil fuel alternatives. RANA GRUBER ANNUAL REPORT 2022 27OUR BUSINESS Gruber does not use chemicals in its production, the magnetite is clean and therefore suitable for a product used in water purification. The demand for water treat- ment products based on magnetite is very high and Rana Gruber often gets requests from players wanting to buy the magnetite. But with the current production level, the company cannot meet this demand. Another reason for a desired increase of the magnetite production is that the company’s revenues from magnet- ite provide security in times with fluctuating prices for hematite. To increase the magnetite production, Rana Gruber has completed the design of the processing plant and planned the organising of the upgrade. The next step is to order the equipment needed. This is part of the inte- grated process to upgrade the processing plant, which will also enable the company to increase the minimum iron content in the hematite product from around 63 per cent to 65 per cent. The plan is to increase today’s magnetite production vol- ume of 100 000 metric tons per year, by 50 per cent by the end of 2024. Strategic partnership for carbon free mining In November 2022, Rana Gruber signed a letter of intent with the global engineering and mining equipment sup- plier Sandvik. The partnership secures supplies of equipment and planning of the on-site infrastructure to make the operations of Rana Gruber carbon free. “The goal is to be the world’s first carbon free iron ore producer before the end of 2025. One of the main chal- lenges to reach this goal is to replace all machinery that runs on fossil fuel with new electric machinery. We are happy for this agreement with Sandvik, which is vital to reach our goal,” says Gunnar Moe, CEO of Rana Gruber. According to the agreement, Sandvik will deliver bat- tery-powered machines and help Rana Gruber adapt and organise the operations to make best use of the new machines. “In Rana Gruber’s 24/7 operations, the machines need change of batteries five to seven times a day. We will help Rana Gruber to find out where it is best to establish locations for changing and charging the batteries based on how the machines will be used inside the under- ground mine”, says Christian Bjorne, Vice President for Sandvik's operations in Northern Europe. The project will be financed with earnings from opera- tions and with a public support scheme from Enova. The company is in dialogue with Enova regarding this. Rana Gruber’s CEO is confident that the investment will be profitable – both through decreased operating costs and through premium prices for products with a low carbon footprint. The investment will also have further benefits. “Our strategic choice to become carbon free makes a dif- ference to the climate. Electrification will contribute to remove the company's emissions of CO 2 , which are cur- rently 8.47 kilograms CO 2 equivalents per tonne pro- duced iron ore. It will also be beneficial for the health of our employees. Without diesel-powered machines in the mine, the air will be cleaner, and less ventilation will be needed”, says Moe. VALUE CREATION AWARD In December 2022, Rana Gruber was awarded the local jobs and value creation award by the Nordland county part of the Confederation of Norwegian Enterprise (NHO) – Norway’s largest organisation for employers, and the leading business lobbyist representing more than 30 000 companies. The jury’s statement was as follows: "The company operates the adventure that has created growth in Rana for more than 200 years. The company has secured unique expertise on iron ore in the region, which has made the region significant in a European context. The company of the month has shown growth and restructuring in recent years, it contributes to an attractive local community and produces iron ore – for December, the award therefore goes to Rana Gruber AS!" RANA GRUBER ANNUAL REPORT 202228 OUR BUSINESS The partnership with Sandvik secures supplies of equipment and assistance relating to planning of the on-site infrastructure to make the operations of Rana Gruber carbon free. RANA GRUBER ANNUAL REPORT 2022 29OUR BUSINESS OVERWHELMED BY THE CONTROL ROOM “I still remember when I entered the control room and saw all the screens. Then I thought – those who understand all this, they must be incredibly skilled”, which I also wanted to be. So I applied for an apprenticeship here, and then ended up with a permanent job as an operator afterwards,” says Sandra Robertsen, technical supervisor in Rana Gruber. How did you end up at Rana Gruber? “It all started when I was on a tour with my chemistry and process class. Then we visited several companies, and for my part, Rana Gruber stood out positively. The company had a lot of equipment to keep track of, which I was looking for as a future operator.” Sandra says that her workdays vary greatly in terms of tasks. But she always starts the day by visiting the control room to get a quick overview of the status of the processing plant, as well as having a little chat with the control room operator. “Then I go into the office to prepare for the morning meeting where I look deeper into what has happened in the production process, and what measures need to be taken to meet our quality standards. After the meeting, workdays are very different, but they are usually made up of observation of the operations in the mines and processing plant, analysing data about the operations, meetings, Lean 5S, and other procedures. THE COMPANY HAS CHANGED How do you think the company has developed since you started six years ago? “I feel that Rana Gruber has changed a lot as an employer since I first started at the company. The transition to a listed company was noticeable to most employees. One had to deal with new stricter information policies, as well as some organisational changes. Personally, I like to have clear rules, as long as it is feasible to work with those rules in practice.” Sandra highlights the installations of new equipment in particular as an interesting challenge at work. “I find it extra exciting with new equipment, as I get to be more involved in the process from planning until the equipment has become part of the operations.” GOOD WORK ENVIRONMENT Sandra speaks warmly about the work environment at Rana Gruber. “People stay serious when it comes to work, but there is also room for joking and banter during the coffee break. There is a good mix of personalities in the company, so there is no need to try to be anyone but yourself.” Working in a male-dominated company does not scare her. “I do not think about the gender of my colleagues. I feel confident being myself and laugh a lot at work.” She is optimistic for the future of both the company and the local community. Why should young people apply to Rana Gruber? “Rana Gruber is a safe and stable workplace that is constantly developing. As an employee, you get opportunities to develop, and you are offered courses and other useful training. You will never stop developing, as new challenges constantly arise. You work in a team but also independently. In addition to exciting tasks, you also get to work with wonderful people who make the workday much easier.” What is most important to you, at work and in your private life? “At work, it is to develop in line with the company and to be a good colleague. In private life, I want to be happy,” Sandra concludes, before rushing into another operations meeting with good colleagues. RANA GRUBER ANNUAL REPORT 202230 OUR BUSINESS NAME: SANDRA ROBERTSEN AGE: AGE: 26 POSITION: Technical supervisor EDUCATION: Certificate in chemistry and process, and vocational school process engineering WORK EXPERIENCE: Operator in the processing plant for five years, technical supervisor for one year. Spinning instructor on the side. RANA GRUBER ANNUAL REPORT 2022 31OUR BUSINESS MORTEN STØVER (born in 1957) Chair since 2020 (independent) MSc in economics from BI Norwegian Business School, and multiple leadership courses from i.a. IMD. Several management positions at Nordlands- banken/DNB. Chair of Eksportfinansiering Norge, Løvold Solutions AS, Elektro AS, Nofir AS, and Linpro AS. Director of Sykehusapotek Nord og Cetho Holding AS. Støver held 6 000 shares at 31 December 2022. Støver attended ten board meetings in 2022. HILDE ROLANDSEN (born in 1963) Director and member of the audit committee since 2022 (independent) MSc in economics. Various positions at Elkem for 23 years, plant director at Renewable Energy Corpora- tion for two years, and own- ership director at Helse Nord for 11 years. Rolandsen held no shares at 31 December 2022. Rolandsen attended nine board meetings in 2022. RAGNHILD WIBORG (born in 1961) Director since 2021 (independent) BSc in finance and macroe- conomics from Stockholm School of Economics and Business Administration. Involvement in several boards in Norway and Swe- den, CEO and investment director in fund management in Norway and Sweden, chair of audit and risk committees Chair of ENERGIA, Paper- shell, Cerebrum Invest, and WKAB. Director of Kistefos and Intrum. Wiborg held 3000 shares at 31 December 2022 (owned through Cerebrum Invest AS). Wiborg attended ten board meetings in 2022. FRODE NILSEN (born in 1963) Director since 2008 BA in civil engineering from Narvik Engineering School, MSc in civil engineering from the Norwegian University of Science and Technology, with specialisation in tunnels and mining. Site engineer for four years, project manager for six years, project director for four years, and CEO for 15 years at Leonhard Nilsen & Søn- ner AS. Chair of Leonhard Nilsen & Sønner, a material business contact to Rana Gruber, LNS Spitsbergen, LNS Mining, and Hålogaland Element. Direc- tor of LNS Ocean, and Andøy Energi. Nilsen held 20 250 shares at 31 December 2022 (additional 11 689 265 shares owned through Leonhard Nilsen & Sønner Eiendom, and 70 000 through TunComp AS). Nilsen attended nine board meetings in 2022. BOARD OF DIRECTORS RANA GRUBER ANNUAL REPORT 202232 BOARD AND MANAGEMENT KRISTIAN A. ADOLFSEN (born in 1961) Director since 2017 MSc in business and econom- ics (No. Siviløkonom) from the Norwegian School of Management (Handelshøys- kolen BI) and MBA from Uni- versity of Wisconsin, Madison, USA. Developed an international company with 27 000 employ- ees over the past 30 years. Chair and director of more than one hundred companies. Adolfsen held 2 865 414 shares at 31 December 2022 (owned through several com- panies). Adolfsen attended ten board meetings in 2022. JOHAN HOVIND (born in 1969) Club leader and worker director since 2020 (independent) Certificate in metallurgical processes. 30 years of experience from industrial companies in Rana. Hovind held 606 shares at 31 December 2022. Hovind attended 10 board meetings in 2022. LASSE ORLANDO STRØM (born in 1990) Operator since 2013, deputy club leader, and worker director since 2020 (independent) Concrete worker certificate. Concrete worker at Helge- land Betong for three years. Strøm held 653 shares at 31 December 2022. Strøm attended nine board meetings in 2022. HENRIETTE ZAHL PEDERSEN (born in 1995) Operator and team leader since 2020 and worker director since 2023 (independent) Upper secondary education in the field of automation and certificate as automation technician. One and a half years as apprentice, two and a half years as automation techni- cian, and five years as team leader at Rana Gruber. Zahl Pedersen held 1 000 shares at 31 December 2022. Zahl Pedersen was elected as director in November 2022 and did not attend any board meetings in 2022. RANA GRUBER ANNUAL REPORT 2022 33BOARD AND MANAGEMENT MANAGEMENT TEAM GUNNAR MOE CEO since 2017 (and 2010–2013) BA in Pedagogy from Nesna University College. Teacher in Rana for 13 years, journalist and editor at Rana Blad for 10 years, head of personnel and administration at Rana Gruber for three years, CBDO at Momek Group for two years, and CBDO at Leonhard Nilsen & Sønner for two years. Moe held 15 733 shares at 31 December 2022. ERLEND HØYEN CFO since 2020 BA in Economics and Administration from Trondheim Business School, and MSc in Financial Economics from BI Norwegian Business School. Business controller at TDC Norge AS for two years, controller manager at TDC Norge AS for three years, senior associate at PricewaterhouseCoopers AS for one year, field economist/controller at Rana Gruber for two years, and procurement manager at Rana Gruber for five years. Høyen held 10 000 shares at 31 December 2022. DR. STEIN-TORE LILJENSTRÖM COO since 2016 Master of Science from Umeå University, and PhD in Physical Chemistry from Umeå University. Department manager at Molab AS for six years, plant manager at Rana Gruber for five years, production manager at Rana Gruber for four years, and CEO at Glør AS for one year. Liljenstöm held 9 920 shares at 31 December 2022. ANITA BRATTAAS MIKALSEN HR director since 2020 Various positions at the Norwegian police for 22 years, head of personnel at Rana Gruber for three years, and head of HR at Rana Gruber for five years. Mikalsen held 606 shares at 31 December 2022. RANA GRUBER ANNUAL REPORT 202234 BOARD AND MANAGEMENT RANA GRUBER ANNUAL REPORT 2022 35BOARD AND MANAGEMENT SHAREHOLDER INFORMATION Rana Gruber aims to be an attractive investment for shareholders, delivering competitive return through sustained growth and an attractive dividend policy. The share is listed on the Oslo Stock Exchange and the ticker code is RANA. Rana Gruber ASA has one share class, and all shares have equal rights and are freely transferable. Each share grants the holder one vote and there are no structures granting disproportionate voting rights. The nominal value of the share is NOK 0.25. Total number of shares issued is 37085092. At 31 December 2022, Rana Gruber’s market value was NOK 1.90 billion. The average daily volume of Rana Gru- ber shares traded on Oslo Stock Exchange was 164124, equivalent to 0.44 per cent of the total number of Rana Gruber shares issued at year-end, and yielding an aver- age daily turnover of NOK 8 817 412. SHARE PRICE Rana Gruber’s share price opened at NOK 47.80 on 3January 2022 and closed at NOK 51.0 on 30 December 2022. During 2022, the share traded between NOK 38.75 and NOK 67.24 per share. DIVIDENDS Pursuant to the company’s dividend policy, the com pany targets to distribute 50-70 per cent of its adjusted net profit as quarterly dividends. The board of directors may decide that up to 30 per cent of the allocated divi dend amount can be applied for acquisition of Rana Gru ber shares. According to the company’s dividend policy, the adjusted net profit shall constitute the IFRS based net profit after tax, adjusted for unrealised gains and losses from the portfolio of hedging positions related to iron ore and cur- rency. The relevant hedging positions are those related to shipments initiated in the quarter of reporting for which the final price is concluded in the subsequent quarter. From the fourth quarter of 2022, unrealised positions of electric power is included in the net financial income and adjusted for in the adjusted net profit. The board also has power of attorney to adjust for extraordinary events which do not count as being part of the company’s core business. The board has the flexibility to utilise approximately 30 per cent of the estimated dividend payments to repur- chase Rana Gruber shares for subsequent redemption and reduce the dividend payments correspondingly. Any buyback program to achieve the same purpose for future quarters will be announced separately. Rana Gruber distributed total dividends of NOK 6.16 per share in 2022. DIVIDEND DISTRIBUTION Dividend per share DPS/EPS Date of approval Ex-date Payment date Q4 2022 NOK 3.00 70% 15 February 2023 17 February 2023 1 March 2023 Q3 2022 NOK 1.05 70% 9 November 2022 14 November 2022 24 November 2022 Q2 2022 NOK 1.51 70% 23 August 2022 26 August 2022 7 September 2022 Q1 2022 NOK 2.09 70% 11 May 2022 16 May 2022 25 May 2022 Q4 2021 NOK 1.51 70% 10 February 2022 15 February 2022 23 February 2022 Extraordinary dividend NOK 2.50 - 8 December 2021 9 December 2021 20 December 2021 Q3 2021 NOK 1.05 70% 9 November 2021 12 November 2021 22 November 2021 Q2 2021 NOK 3.86 70% 25 August 2021 30 August 2021 8 September 2021 Q1 2021 NOK 2.90 70% 11 May 2021 18 May 2021 26 May 2021 Prior to admission for trading NOK 0.74 - - - - SHARE PRICE DEVELOPMENT Click or scan the QR code for access to the share price development at Oslo Stock Exchange. RANA GRUBER ANNUAL REPORT 202236 SHAREHOLDER INFORMATION ANALYSTS Four analysts are covering Rana Gruber, providing market updates and estimates for Rana Gruber’s financial development. DNB Markets Niclas Gehin [email protected] +47 24 16 91 98 Sparebank1 Markets Rune Tryti [email protected] +47 47 63 07 95 TREASURY SHARES At 23 February 2022, the company completed a buyback program of Rana Gruber shares. After approval by the shareholders at the general meeting on 22 March, the company deleted 306 908 treasury shares on 27 May. Following the share capital reduction, the share capi- tal of Rana Gruber ASA is NOK 9271273 divided into 37085092 shares. SHAREHOLDERS At 31 December 2022, Rana Gruber had 6 398 sharehold- ers, of which the 20 largest held 59.1 per cent of total shares. Non-Norwegian shareholders owned 6.9 per cent of the shares. Leonhard Nilsen & Sønner – Eiendom was the largest shareholder with 20.46 per cent of the shares. THE 20 LARGEST SHAREHOLDERS AT 31DECEMBER 2022 Shareholder Number of shares Per cent holding 1 Leonhard Nilsen & Sønner - Eiendom 7 589 265 20.46% 2 Morgan Stanley & Co. Int. Plc. 2 607 351 7.03% 3 HI Capital AS 2 224 465 5.99% 4 Zolen & Månen AS 1 350 000 3.64% 5 Grafo AS 1 202 113 3.24% 6 Eidissen Consult AS 1 189 991 3.21% 7 A.H. Holding AS 1 168 008 3.15% 8 Nordnet Livsforsikring AS 652 114 1.76% 9 The Northern Trust Comp, London Br 578 506 1.56% 10 Songa Capital AS 502 697 1.36% 11 Klevenstern AS 436 690 1.18% 12 Mecca Invest AS 436 690 1.18% 13 State Street Bank and Trust Comp 344 821 0.93% 14 The Bank of New York Mellon SA/NV 276 752 0.75% 15 Brown Brothers Harriman & Co. 273 247 0.74% 16 The Bank of New York Mellon 241 294 0.65% 17 Clearstream Banking S.A. 231 626 0.62% 18 Nordnet Bank AB 222 316 0.60% 19 Kara Invest AS 204 259 0.55% 20 The Bank of New York Mellon 201 100 0.54% Total 20 largest shareholders 21 933 305 59.14% Clarksons Bendik Folden Nyttingnes [email protected] +47 22 01 63 47 Pareto Kenneth Sivertsen [email protected] +47 24 13 21 89 FINANCIAL CALENDAR 2023 12 April 2023: Annual General Meeting 11 May 2023: Report for Q1 2023 29 August 2023: Report for Q2 and H1 2023 15 November 2023: Report for Q3 2023 RANA GRUBER ANNUAL REPORT 2022 37SHAREHOLDER INFORMATION Rana Gruber has established guidelines for the company’s reporting of financial and other information based on the ideal of transparency and equal treatment of all participants in the securities market. RANA GRUBER ANNUAL REPORT 202238 CORPORATE GOVERNANCE CORPORATE GOVERNANCE STATEMENT Rana Gruber seeks to maintain high standards for corporate governance and believes that good corporate governance is an important prerequisite for value creation. The company's shares were admitted for trading on Euronext Growth Oslo in February 2021 and uplisted to the main list at the Oslo Stock Exchange on 28 March 2022. Rana Gruber is therefore required to issue an annual corporate governance statement in accordance with section 3-3b of the Norwegian Accounting Act and the Norwegian Code of Practice for Corporate Govern- ance; cf. section 7 on the continuing obligations of stock exchange listed companies. The board of directors (“the board”) of Rana Gruber has prepared and approved a corporate governance pol- icy that describes the company's main principles for corporate governance and establishes a framework of guidelines and principles that regulate the relationship between the company's shareholders, the board, the chief executive officer (“CEO”), and the other manage- ment positions of the company. Corporate governance at Rana Gruber shall be based on the following main principles: ■ Rana Gruber shall at all times comply with all laws and regulations that apply to the company. ■ The board shall ensure that the company has appropriate corporate governance. ■ The company shall at all times seek to comply with the recommendations in the Norwegian Code of Practice for Corporate Governance. If, in the opinion of the board, there are special considerations which indicate that the company should deviate from any of these recommendations, the board must provide a justification for any deviance. In each annual report, the board will give a statement on the company's corporate governance. ■ The company's operations must be conducted in accordance with high ethical standards. The company shall actively take social responsibility. ■ The company must create value for shareholders in a sustainable way. In its work, the board shall take into account economic, social, and environmental conditions. ■ The board shall ensure that the company has clear goals and strategies for its operations. ■ The company should have equity that is adapted to the company's goals, strategy, and risk profile. ■ The board shall ensure that the company has a clear and predictable dividend policy. ■ The company shall avoid any unreasonable discrimination of shareholders. ■ The company's transactions with related parties shall be based on normal business terms and the arm's length principle. ■ The company's shares must be freely tradeable. ■ The board of directors should facilitate the participation of as many shareholders as possible at the company's general meeting, so that shareholders can exercise their rights. ■ The board shall ensure that the company has good internal control and appropriate systems for risk management in relation to the scope and nature of the company's activities. Rana Gruber’s corporate governance principles have been developed in accordance with the Norwegian Accounting Act §3-3b and based on the current Norwe- gian Code of Practice (“the Code”) for Corporate Govern- ance, most recently issued on 14 October 2021. The Code is available at www.nues.no. A review of Rana Gruber’s compliance with the Code’s recommendations follows herein. 1. IMPLEMENTATION OF AND REPORTING ON CORPORATE GOVERNANCE Rana Gruber’s corporate governance principles are determined by the board, which has the overall respon- sibility for ensuring that the company has a high stand- ard of corporate governance. The board has prepared a corporate governance policy document addressing the framework of guidelines and principles which regu- late the interaction between the shareholders, the board, and the CEO. RANA GRUBER ANNUAL REPORT 2022 39CORPORATE GOVERNANCE The corporate governance policy can be changed by the board and will be reviewed by the board on a regular basis. Deviations from the Code: None 2. BUSINESS Rana Gruber is a Norwegian iron ore producer estab- lished in 1964, with operations based on more than 200 years of mining experience. The business purpose is set out in the company’s articles of association and reads as follows: "The company's objective is to conduct production and sales of mining products and related activities, and, through economically sound business operations, create lasting and safe jobs in the company. The company shall seek to develop new products and businesses, and the company may participate in other companies as owner or to fulfil the above objectives." It follows from the company’s corporate governance principles that the company must create value for share- holders in a sustainable way, for which purpose the board has defined clear objectives, strategies, and risk profiles related to the company's business activities. In its work, the board shall consider economic, social, and environmental conditions. The board of directors evaluates these objectives, strat- egies, and risk profiles on a yearly basis. Deviations from the Code: None 3. EQUITY AND DIVIDENDS The board is committed to maintain a satisfactory capi- tal structure for the company to support its goals, strat- egy, and risk profile, thereby ensuring that there is an appropriate balance between equity and other sources of financing. The board will continuously assess the cap- ital requirements related to the company’s strategy and risk profile. Equity At 31 December 2022, the company’s equity totalled NOK 823.1 million, which corresponds to an equity ratio of 57.0 per cent. The board considers Rana Gruber’s finan- cial position to be solid with the necessary capacity to support its objectives, strategy, and risk profile. Dividends According to the company’s dividend policy, the adjusted net profit shall constitute the IFRS based net profit after tax, adjusted for unrealised gains and losses from the portfolio of hedging positions related to iron ore and currency. The relevant hedging positions are those related to shipments initiated in the quarter of reporting for which the final price is concluded in the subsequent quarter. From the fourth quarter of 2022, unrealised positions of electric power is included in the net financial income and adjusted for in the adjusted net profit. The board has the flexibility to utilise approximately 30 per cent of the estimated dividend payments to repur- chase Rana Gruber shares for subsequent redemption and reduce the dividend payments correspondingly. Any buyback program to achieve the same purpose for future quarters will be announced separately. When deciding whether to propose a dividend and when determining the dividend amount, the board of directors will take into account legal restrictions as well as capital expenditure plans related to announced strategic pro- jects, financing requirements, and the volatile nature of the market in which the company operates. During the financial year 2022, the company’s board of directors has resolved to distribute total dividends of NOK 6.16 per share, equal to NOK 228.8 million. In addi- tion the company puchased NOK 14.2 million in treasury shares. Board mandates At the annual general shareholder meeting in 2022, the board was granted the following mandates: "The board of directors is authorised pursuant to the Public Limited Companies Act section 8-2 (2) to approve the distribution of dividends based on the company annual accounts for 2021. The authorisation shall remain in force until the annual general meeting in 2023. The authorisation is not valid until it is registered with the Norwegian Register of Business Enterprises." "The board of directors is authorised pursuant to the Public Limited Liability Companies Act section 9-4 to acquire shares in the company ("own shares") on behalf of the company with an aggregate nominal value of up to NOK 934800 (corresponding to 10 per cent of the com- pany's share capital). The authority also encompasses contractual pledges over own shares. When acquiring own shares, the consideration per share may not be less than NOK 1 and may not exceed NOK 400. The board of directors determines the methods by which own shares can be acquired or disposed of. The authority shall remain in force until the annual general meeting in 2023, but in no event later than 30 June 2023. With effect from the time of registration of this authority with the Nor- RANA GRUBER ANNUAL REPORT 202240 CORPORATE GOVERNANCE wegian Register of Business Enterprises the previous authority to acquire own shares is withdrawn." Both mandates are valid until the annual general meet- ing in 2023. In the event that a board mandate is proposed, the man- date should be limited to a specific purpose and treated as a separate issue, subject to vote by the sharehold- ers at the general meeting. Board authorisations are valid for the period of time determined at the sharehold- ers' meeting. The board's authorisations to increase the share capital or buy Rana Gruber shares will normally only be given for an interval lasting no longer than until the next annual general meeting after the authorisation is given. Deviations from the Code: None 4. EQUAL TREATMENT OF SHAREHOLDERS Rana Gruber has a single class of shares, and all shares carry the same voting and dividend rights. It follows from the company’s guidelines for investor relations that all communication with shareholders shall be based on equal treatment. Any decision to waive the pre-emption rights of exist- ing shareholders to subscribe for shares in the event of an increase in share capital shall be justified. In the event that the board of directors resolves to carry out an increase in share capital and waive the pre-emption rights of existing shareholders on the basis of a mandate granted to the board, the justification for the increase will be publicly disclosed in a stock exchange announce- ment. Deviations from the Code: None 5. SHARES AND NEGOTIABILITY Rana Gruber’s shares are freely tradeable and there are no restrictions on the ability to own, trade, or vote for the shares. Deviations from the Code: None 6. ANNUAL SHAREHOLDERS’ GENERAL MEETING Notice of the annual general meeting Rana Gruber’s highest decision-making body is the group of shareholders at the annual general meeting. All shareholders have the right to participate in the general meetings of the company. It follows from Rana Gruber’s corporate governance principles that the board of direc- tors shall facilitate the participation of as many share- holders as possible at the general meeting, so that they can exercise their rights. The general meeting for 2023 will take place 12 April 2023. The full notice for general shareholder meetings shall be sent to the shareholders no later than 21 days prior to the meeting. The board will ensure that the notice includes information about resolutions and that support- ing information is sufficiently detailed to allow share- holders to form a view on all matters to be considered at the meeting. Shareholders will be able to vote on each individual proposition, including on each individual candidate nomi- nated for election. Shareholders who wish to participate in a general share- holder meeting, shall notify the company of this within a deadline which is set out in the notice of the general meeting, and which cannot be set earlier than five days prior to the meeting. The cut-off for confirmation of attendance shall be set as short as practically possible. Shareholders may also send notification of their attend- ance, using the form provided, by post or email to the company’s account manager, DNB, or via the company’s website, www.ranagruber.no. In accordance with article 7 of the company’s articles of association, documents relating to matters to be addressed at a general meeting of shareholders may be made available on Rana Gruber’s website. The same applies to documents which by law must be included in or attached to the invitation to attend the general meet- ing. If the documents are made available in this way, the statutory requirement with respect to distribution to shareholders is not applicable. A shareholder may ask to be sent documents relating to matters to be discussed at the general meeting. The company cannot demand any form of compensation for sending the documents to the shareholders. Meeting chair and voting The board of directors, the chair of the nomination com- mittee, and the company’s auditor are expected to attend the general meetings. The shareholders at the general meeting elect a person to chair the meeting. The board of directors shall ensure that the shareholders at the general meeting are able to elect an independent chair. Shareholders who are unable to attend a general meet- ing may cast an advance vote on matters to be consid- ered at general meetings of the company. Such votes can also be cast by electronic communication. The right to vote in advance is conditional on the existence of a RANA GRUBER ANNUAL REPORT 2022 41CORPORATE GOVERNANCE reassuring method for authenticating the sender. The board decides whether such a method is appropri- ate prior to the individual general meeting and may lay down more detailed guidelines for written advance votes. It shall be stated in the notice of the general meet- ing whether access to advance voting has been granted and what guidelines may be laid down for such voting. Shareholders unable to attend may also vote by proxy and the company will nominate a person who can act as a proxy for shareholders. The procedures for electronic voting and proxy voting instructions are described in the meeting notification and published on the company web- site. The form provided by the company for shareholders to appoint a proxy should be drawn up so that separate voting instructions can be given for each matter to be considered at the meeting and for each of the candidates nominated for election. Minutes of the general meeting will be published as soon as possible via the Oslo Stock Exchange’s messag- ing service www.newsweb.no (ticker: RANA) and on the company’s website www.ranagruber.no. Deviations from the Code: None 7. NOMINATION COMMITTEE Rana Gruber has appointed a nomination committee as required by article 8 of the company’s articles of associ- ation. At 31 December 2022, the nomination committee consisted of the following members: ■ Leif Teksum, chair, elected in March 2021 for two years ■ Lisbeth Flågeng, member, elected in March 2021 for two years ■ Robert Sotberg, member, elected in December 2021 until March 2023 The guidelines for the nomination committee have been approved by the shareholders at the general meeting. The primary tasks of the nomination committee are, at the general meeting, to recommend and propose candidates and remuneration for the company’s directors and nom- ination committee, and remuneration to the members of the board committees. The recommendation will include a proposal for appointment of a chair and deputy chair to be elected by the shareholders at the general meeting. The members of the nomination committee’s fees shall be determined by the shareholders at the general meeting. According to the articles of association, the nomination committee shall consist of three members, including the chair, and the nomination committee members shall be shareholders or representatives of shareholders. The members of the nomination committee, including its chair, have been elected by the shareholders at the general meeting. The members of the nomination com- mittee’s period of service shall be two years unless the shareholders at the general meeting decide otherwise. The nomination committee shall be composed so that the interests of the shareholder community are taken into account, and the members shall be independent of the company's board and executive management team. In its work to propose candidates, the nomination committee shall contact, among others, the largest shareholders, board members, and the day-to-day man- agement. A justification for proposing a candidate will be provided for each candidate. The nomination committee's recommendation to the general meeting regarding the election of sharehold- er-elected board members, members of the nomination committee, and fees should be available early enough to be sent to the shareholders together with the notice of the relevant general meeting. Information regarding the composition of the nomination committee, which members are up for election, and how input and proposals may be submitted to the committee is posted on Rana Gruber’s website under “Investors”. Deviations from the Code: None 8. BOARD OF DIRECTORS: COMPOSITION AND INDEPENDENCE Composition According to article 5 of Rana Gruber’s articles of asso- ciations, the board shall consist of a minimum of three and a maximum of eight directors. Directors are elected by the shareholders at the general meeting for a period of two years. The shareholders at the general meeting elect the chair of the board and the deputy chair of the board. Proposed candidates for the board of directors shall have the necessary experience, competence, and work capacity, and there should be an appropriate replace- ment for each individual holding a position. The board should be composed so that it can safeguard the inter- ests of the shareholder community and the company's need for competence and diversity. When appointing candidates to the board, it should be taken into account that the board aims to function as a collegial body. At 31 December 2022, Rana Gruber’s board consisted of RANA GRUBER ANNUAL REPORT 202242 CORPORATE GOVERNANCE eight directors, five of which were elected at the com- pany’s general meeting at 18 March 2021 for a period of two years. Three directors were elected by and among the employees in November 2022 for a two-year period. The current composition of the board is presented on page 32-33 of this report, including an overview of each individual board director’s independence, competence, and attendance at board meetings. Directors are encouraged to own shares in the company. At 31 December 2022, seven of the directors held shares in Rana Gruber. Independence of the board Rana Gruber’s board is composed such that it is able to act independently of any special interests. All directors of the board of directors are independent from the com- pany's executive management. Being the chief executive officer of Leonhard Nilsen & Sønner – Eiendom AS, Frode Nilsen is not independent from the company's largest shareholder, Leonhard Nilsen & Sønner – Eiendom AS, which is also a material business partner to the company. Deviations from the Code: None 9. THE WORK OF THE BOARD OF DIRECTORS The board has adopted instructions to lay down rules for the work and management of the board, as well as the CEO's work in relation to the board. The board shall ensure proper organisation of the com- pany's activities and supervise the company's day-to-day management. The board shall determine the necessary plans and budgets for the company's activities. The board’s primary responsibility shall be (i) participat- ing in the development and approval of the company’s strategy, (ii) performing necessary monitoring func- tions, and (iii) acting as an advisory body for the execu- tive management team. The board is also responsible for ensuring that the operations of the company are com- pliant with the company’s values and ethical guidelines. The chair of the board is responsible for ensuring that the board’s work is performed in an effective, efficient, and correct manner. All directors of the board shall receive information about the company’s operational and financial development regularly. The company’s strategies shall also be subject to review and evaluation by the board at a regular basis. It follows from the company’s corporate governance principles that transactions with related parties shall be based on normal business terms and the arm’s length principle. A presentation of transactions and balances with related parties is included in the notes to the finan- cial statements, on page 156. According to the instructions for the board and CEO, a board director with prominent personal or financial interests in a particular matter (or with relation to a per- son with such interests, as defined in the Public Limited Liability Companies Act, section 1-5) shall not participate in the consideration of or decision related to that matter. Board directors must also not participate in any action the board might take concerning a loan or other credit to themselves or actions concerning a guarantee for their own debt. A board director shall inform the board if he or she, directly or indirectly, has a significant interest in an agreement entered into by the company. Additional information on transactions with related par- ties can be found in note 27.2 to the 2022 financial state- ments. The board evaluates its own performance and expertise once a year. Sub-committees of the board Audit committee Pursuant to the Norwegian Public Limited Liability Companies Act and the listing rules of the Oslo Stock Exchange, the company shall have an audit committee. The audit committee is appointed by the board. The committee’s main tasks are to prepare the board’s follow-up of the financial reporting process, monitor the performance of the company’s internal control and risk management systems, and maintain an ongoing dialogue with the selected auditor. At 31 December 2022, the audit committee consisted of the following directors: ■ Hilde Rolandsen, chair ■ Morten Støver, member The board has decided not to appoint a remuneration committee. Deviations from the Code: None RANA GRUBER ANNUAL REPORT 2022 43CORPORATE GOVERNANCE 10. RISK MANAGEMENT AND INTERNAL CONTROL The board shall ensure that Rana Gruber has a sound internal control, and systems for risk management that are appropriate in relation to the extent and nature of the company’s activities. The internal control and the systems for risk management shall also encompass the company’s corporate values and ethical guidelines. The objective of the risk management and internal con- trol is to manage exposure to risks in order to ensure the successful conduct of the company’s business, and to support the quality of financial reporting and compli- ance with relevant laws and regulations. The board shall carry out an annual review of the com- pany’s most important areas of exposure to risk and its internal control arrangements. The board shall provide an account in the annual report of the main features of the company’s internal control and risk management systems as they relate to the com- pany’s financial reporting. Internal control of financial reporting is achieved through day-to-day follow-up by the management, and supervision by the audit committee. Deviations from the Code: None 11. REMUNERATION OF THE BOARD OF DIRECTORS Remuneration of directors shall be reasonable and reflect the board's responsibilities, expertise, time invested, and the complexity of the business. The remu- neration to the directors is not performance-related and does not include share option elements. The annual general meeting shall determine the board’s remuneration after considering recommendations by the company’s nomination committee. The company will establish guidelines for remuneration of the board of directors and executive management for approval at the ordinary general meeting in 2023. Addi- tional information on remuneration paid to directors for 2022 is presented in note 27.1 to the financial statements, pursuant to the Accounting Act section 7-31b and in the annual remuneration report, which will be presented to the shareholders in accordance with the Norwegian Pub- lic Limited Liabilities Companies Act section 6-16b. None of the board directors or companies with which they are associated have assignments for the company other than their appointment as a director of the board. The board shall be informed if individual directors per- form tasks for the company or any company entities other than exercising their role as directors. Fees for any such services shall be approved by the board. Work in sub-committees may be compensated in addition to the remuneration received for board directorship. Deviations from the Code: None 12. REMUNERATION OF EXECUTIVE PERSONNEL Following the transfer from Euronext Growth Oslo to the main list at the Oslo Stock Exchange on 28 March 2022, and pursuant to the Norwegian Public Limited Liabilities Companies Act, section 6-16a, the company is required to establish guidelines for the remuneration of the exec- utive management. The guidelines will be presented to the shareholders for approval at the ordinary general meeting in 2023 in the form of a separate document. Further information about remuneration to executive personnel is provided under note 27.1 to the financial statements pursuant to the Accounting Act, section 7-31b, and in the annual remuneration report, which will be presented to the shareholders in accordance with the Norwegian Public Limited Liabilities Companies Act, sec- tion 6-16b. Deviations from the Code: None 13. INFORMATION AND COMMUNICATIONS Investor relations Rana Gruber has established guidelines for the compa- ny’s reporting of financial and other information based on the ideal of transparency and equal treatment of all participants in the securities market. The purpose of these guidelines is to ensure simultaneous access to accurate, relevant, and up-to-date information about Rana Gruber. In addition, the guidelines shall contribute to investor relations being exercised in accordance with applicable laws, rules, and recommendations. These guidelines also include principles for the compa- ny’s contact with shareholders at occasions other than general meetings. The company’s ambition is to comply with the Oslo Stock Exchange’s Code of Practice for IR. Financial information The company holds open investor presentations in con- nection with the company's quarterly reports. Pres- entations prepared for investors in connection with the quarterly reports are made publicly available together with the reports. Important events that affect the com- pany will be reported immediately. The company pub- RANA GRUBER ANNUAL REPORT 202244 CORPORATE GOVERNANCE lishes an annual financial calendar with an overview of dates for financial reporting and other important events. Quiet period In the 30 days period prior to the publication of results, Rana Gruber will minimise meetings and contact with investors, analysts, media, or other parties as relat- ing to the company’s results and future outlook. This is to ensure that all interested parties in the market are treated equally. Deviations from the Code: None 14. TAKEOVERS The board has established guidelines on how to act in the event of a take-over bid. It follows from these guidelines, that if an offer is made for the purchase of shares in Rana Gruber, the board shall comply with the general principle of equal treat- ment of all shareholders, and, as far as possible, ensure that the company's activities are not unnecessarily inter- rupted. The board will do its best to ensure that share- holders receive the necessary information and time to assess the offer. The board of directors shall not seek to prevent an offer to purchase shares unless it believes such an action can be defended with regard to the company's or sharehold- ers' interests. The board will not exercise any author- ity or make any decisions aimed at counteracting such offers, unless this has been approved by the sharehold- ers at the company's general meeting after the offer has been made public. If an offer is made for the purchase of shares in the com- pany, the board shall give a statement in accordance with statutory requirements and the Norwegian Code of Practice for Corporate Governance. If an offer is made for the purchase of shares in the com- pany, the board shall obtain a valuation from an independ- ent expert. If an offer is made by a major shareholder, a member of the board or the day-to-day management, or related parties or related parties thereof, or others who have recently held such a position, who are either buyers or a person with a special interest in the takeover bid, the board shall obtain an independent valuation. Any transaction that is in effect a disposal of the com- pany’s activities shall be submitted for approval by the shareholders at the general meeting. Deviations from the Code: None 15. AUDITOR The auditor makes an annual presentation of the audit- ing plan to the audit committee. Further, the auditor provides the board with a written confirmation that the requirement of independence has been met. The auditor participates in all meetings of the audit com- mittee and in the board meeting that deals with the annual report. The auditor reports to the audit commit- tee and board on his assessment of the internal control of the financial reporting process. At these meetings, the auditor reports on any material changes in the company’s accounting principles and key aspects of the audit, and comments on any material estimated accounting figures. There have been no disa- greements between the auditor and management on any material matters. Once a year, the board of directors reviews the compa- ny’s internal control procedures with the auditor, includ- ing weaknesses identified by the auditor and proposals for improvement. The board and the audit committee have met with the auditor without representatives of the executive man- agement being present regarding the preparation of the annual report for 2022. The board of directors has established guidelines for the use of the auditor by the company’s executive man- agement for services other than the statutory financial statement audit. At the annual general meeting, the board shall present a review of the auditor’s compensation required by law for auditory work and remuneration associated with other specific assignments. Compensation paid is presented in note 6 to the financial statements. The board shall facilitate the attendance of the auditor at all general meetings. Deviations from the Code: None RANA GRUBER ANNUAL REPORT 2022 45CORPORATE GOVERNANCE ESG REPORT 2022 RANA GRUBER ANNUAL REPORT 202246 ESG REPORT PAVING THE WAY FOR SUSTAINABLE MINING At Rana Gruber, we work every single day to reduce our environmental footprint, create a safe and attractive work environment, and to be a positive contributor to the local environment around us and society as a whole. We are an important part of Norway's history and a proud mining tradition. The miners have extracted iron ore from our mountains since the 18 th century, and our company has existed for almost 60 years. Mining is therefore a fundamental part of Rana municipality's com- mon identity and storytelling, and today, Rana Gruber is a cornerstone of Mo i Rana. We are proud of our history but also conscious of our responsibility. At Rana Gruber, we will take responsibility for the future and the everyday life we create. We must work in a sustainable way. Today, Rana Gruber has one of the industry's lowest carbon emissions. We will deliver fossil-free iron ore products by the end of 2025. It is a very high ambition that will demand a lot from us, our customers, and our suppliers. To deliver on our ambition, we must substitute fos- sil-powered machinery and transport with sustainable alternatives. This will make Rana Gruber the world’s first carbon free iron ore miner. In 2022, we have taken important steps to pave the way for sustainable mining. We have increased the electri- fication of the operations, enhanced the quality of the hematite product (which enables less emissions and waste from the steel mills), and signed an agreement with Sandvik on the supply of electric machines and sup- port for the new on-site infrastructure. We have also achieved an 86.3 per cent waste sorting rate. Rana Gruber's core values are proud, brave, safe, and responsible. The values constitute our philosophy that drives our employees and our actions every single day. Since the early 1960s, we have taken pride in safe opera- tions with a focus on minimising negative impact related to e.g. emissions of oil and dust from the production, and injuries. This has also been an important part of our social mission. LEAN mining is important for our mindset and how we work together at Rana Gruber. Employees at all levels must be involved in order to ensure that every activity is done as smartly and efficiently as possible. We shall not waste time, resources, or funds, and we shall pave the way for the future of mining. Therefore, in last year's report, we promised an even clearer focus on how we would work with sustainability in 2022. We com- mitted to establishing an ESG strategy and good plans for reporting, so that we will be able to better measure our footprint and societal impact. In 2022, we have worked systematically with the prom- ises from last year and you can see the result in this annual report. Nancy Schreiner Environment and sustainability manager RANA GRUBER ANNUAL REPORT 2022 47ESG REPORT Highlights of 2022 Rana Gruber acknowledges the impact the business has on the climate and environment, people, and society at large. The company works systematically to reduce its footprint and contribute to positive changes in its own operations and in the supply chains. In 2022, the company has focused on establishing a good structure and building a solid foundation for work with ESG. The entire executive management team has con- tributed to the company’s first materiality assessment and ESG strategy. The ESG strategy has been communicated broadly in the organisation. The strategy is presented in general meet- ings, manager meetings, work environment committee meetings, company development committee meetings, and other relevant meetings. The company has also informed employees about the ESG strategy in letters to employees (e.g. in the Christmas letter from the CEO). Sustainability work is made visible in all levels of the organisation. As part of the ESG strategy, Rana Gruber has employed several people, in all levels of the organi- sation. In accordance with the requirements of the Equality and Anti-Discrimination Act, the company has carried out a risk assessment of the business which deals with dis- crimination and harassment. In line with the require- ment to provide an annual equality statement describing the company's efforts to secure equal opportunities, the company prepared a separate statement in 2021, which was included in the annual report for 2021. This work was revised in the autumn of 2022. In 2022, Rana Gruber has carried out a due diligence assessment of the value chain, in line with the require- ments of the Transparency Act, which entered into force on 1 July 2022. The board of directors has approved of the plans for further work with the Act, and the company will deliver a report by the end of June 2023. The company has also carried out a climate risk assess- ment, in which the company has focused on the threats and opportunities it faces regarding the consequences of climate change. A statement has been developed in line with the recommendations of Task Force on Climate-Re- lated Financial Disclosures. KEY FACTS ■ Emissions: 8.47 kgCO 2 e/tonne produced iron ore ■ Materiality assessment and ESG strategy ■ Equality statement in line with the Norwegian Equality and Anti-Discrimination Act ■ Due diligence assessment in line with the Norwegian Transparency Act ■ Climate risk assessment in accordance with the recommendations from Task Force on Climate-Related Financial Disclosures ■ Reporting in accordance with GRI Universal Standards 2021 ■ Reporting in accordance with Towards Sustainable Mining Sustainability reporting This ESG report is an important part of Rana Grubers commitment to transparency and sustainability. The report is intended to provide an overview of the com- pany’s efforts to reduce the environmental footprint, support employees and the local community, and cre- ate long-term value for stakeholders. The report covers Rana Gruber's operations, and partly indirect operations, for example, in the carbon accounts. In 2022, Rana Gruber has adopted several recognised frameworks for sustainability reporting. This report is prepared in accordance with the GRI Uni- versal Standards 2021. In accordance with this stand- ard, the report focuses on the key ESG issues for Rana Gruber, based on a materiality assessment done in 2022. The report provides details on material topics and is structured according to the company’s efforts related to ESG. The GRI index at the end of the report provides an overview of the disclosures according to the GRI Univer- sal Standards, including references to where information on the individual disclosures may be found. Rana Gruber has as of 2022 adopted reporting on cli- mate risk in line with the recommendations set by Task Force on Climate-related Financial Disclosures (TCFD). The company has prepared a TCFD statement, which is included as an appendix to this report. In addition, this ESG report contains the updated carbon accounts for 2022. Rana Gruber applies greenhouse gas (GHG) inven- RANA GRUBER ANNUAL REPORT 202248 ESG REPORT tory accounting principles as its reporting methodology, in accordance with the GHG Protocol Corporate Account- ing and Reporting Standard. More information about the carbon accounts can be found in the appendix of the report. The ESG report also includes Rana Gruber’s annual equality statement, in accordance with the require- ments of the Norwegian Equality and Anti-Discrimination Act. This statement can be found in the appendix of this report. Further, the company will disclose its work with human rights and due diligence in line with the requirements of the Norwegian Transparency Act. This statement will be published on the company website by 30 June 2023. Lastly, in the past year, Rana Gruber, through his mem- bership in the Norwegian Mineral Industry, has con- tributed to the translation of the Canadian reporting framework, TSM - Towards Sustainable Mining. This ESG report is prepared according to that framework. The ESG report covers the fiscal year from 1 January, 2022, to 31 December, 2022. It is published as part of the Annual Report of 2022. No restatements from previous reports have been made. The carbon accounts are exter- nally assured by PwC. The rest of the ESG report has not been assured. For more information about sustainability and the sus- tainability reporting of Rana Gruber, please contact: Nancy Schreiner, Environment and Sustainability Man- ager of Rana Gruber, at [email protected] RANA GRUBER ANNUAL REPORT 2022 49ESG REPORT The control room contains highly advanced digital systems. Materiality assessment and stakeholders PURPOSE A materiality assessment is carried out to assess what is most important to focus on in the business. Rana Gru- ber has mapped the opportunities and risks within ESG that the company faces. In addition, the company has looked at its most important stakeholders and what they are most concerned about. The purpose is to identify the most relevant and critically important areas within sustainability. In this way, the company can implement measures and prioritise resources in a more targeted manner. PROCESS On 20 and 21 April 2022, managers representing the entire company met for a two-day workshop. The managers carried out a materiality assessment, which formed the basis for the sustainability strategy, in line with the GRI Universal Standard. In this workshop, the manag- ers carried out an assessment of megatrends, the industry, stakeholders, and the value chain, before the managers prioritised material topics according to the stakeholders' focus and the company's own focus within ESG. STAKEHOLDERS Rana Gruber strives for an open and honest dialogue with its stakeholders through conversations and meet- ings, as part of the daily operations. The company has an extensive dialogue with the local environment in which it operates, the employees, and with authorities and industry associations. The company regularly informs about its work in quar- terly reports, half-yearly reports, and annual reports. The company takes feedback seriously and works con- tinuously with stakeholder dialogue. The insight built up through this dialogue forms the basis for the company’s priorities when it comes to various topics within ESG. As part of the materiality assessment, the company has therefore looked at what is important to its stakeholders within ESG: RANA GRUBER ANNUAL REPORT 202250 ESG REPORT Employees have access to a canteen in the underground mine. Who Topics of importance Dialogue with the company Employees ■ Safe operations and a reliable workplace Work environment committee, wage negotiations, general meetings, development meetings, operations meetings, and employee representative meetings Customers ■ Financial sustainability and ability to deliver products ■ Premium for sustainability focus ■ Co 2 emissions Status meetings, both directly and indirectly with Cargill Shareholders ■ Responsible operations ■ Reliability ■ Sustainability Quarterly reports and presentations, annual general meeting, and stock exchange announcements Local community ■ Good relationship with Rana Gruber ■ Local impact: role as employer and role model ■ Local noise and pollution ■ Information spreading locally and availability for questions Through media coverage, organised meetings etc Authorities ■ Future industry ■ Nature management ■ Safety ■ Jobs Meetings with ministers, ministries, and local authorities. Contact with the Directorate of Mining and the Norwegian Environment Agency. Indirect contact with authorities through membership in the Federation of Norwegian Industries and the Norwegian Mineral Industry Suppliers ■ Good relationship with Rana Gruber ■ Local impact: role as employer and partner ■ The Transparency Act Meetings Trade unions, employee and employer organisations ■ Collaboration between employers, trade unions, and authorities for decent working conditions ■ Descent salary and safe working conditions Meetings with trade unions, and contact through membership in the Confederation of Norwegian Enterprise (NHO) and the Federation of Norwegian Industries NGOs ■ Ambitions and plans relating to climate ■ Nature management Contact with Bellona Industry organisations ■ Common reporting standard for the industry ■ Cooperation with authorities Contact with TSM, and membership in the Federation of Norwegian Industries and the Norwegian Mineral Industry Bank and finance ■ Good sustainability strategies and plans ■ Implementation of strategy Meetings with banks Potential investors ■ Good sustainability strategies and plans ■ Implementation of strategy Quarterly reports and presentations, and stock exchange announcements Media ■ Economy ■ Responsible operations ■ Nature management ■ Local cooperatio Contact with media outlets and journalists Education and research institutions ■ Apprenticeships ■ Research projects Contact with the Science Centre in Nordland, Kunnskapsparken Helgeland, the Norwegian University of Science and Technology, and the rock blasting and mining class at Fauske upper secondary school RANA GRUBER ANNUAL REPORT 2022 51ESG REPORT ASSESSMENT In the below matrix, the company’s material topics within ESG are placed according to how much impact Rana Gruber's activities have on the topics (x-axis), and according to how much impact the company's handling of the topics has on the stakeholders' decisions (y-axis). ■ Climate ■ Decent working conditions ■ Safety – HSE ■ Resource utilisation ■ Nature ■ Competence and development among employees ■ Local value creation ■ Equality ■ Human rights Material for Rana Gruber Material for stakeholders The following material topics form the basis for the pri- orities in the sustainability strategy: 1. Climate 2. Decent working conditions 3. Safety - HSE 4. Resource utilisation 5. Nature 6. Competence and development among employees 7. Local value creation 8. Equality The matrix shows that, in order to ensure a sustaina- ble business and transition to a carbon free operations, it will be important for Rana Gruber to think holistically about the operations, suppliers, and employees. The pri- oritised material topics provide a basis of new system- atic measures in Rana Gruber's sustainability strategy and work. Rana Gruber’s material topics CLIMATE Rana Gruber wants to contribute to the world's daily struggle to reach the goals of the Paris Agreement, and wants to contribute to reducing the world's total CO 2 emissions. The global steel industry accounts for seven to eight per cent of total CO 2 emissions. The company has a high ambition of delivering fossil-free products by the end of 2025, and this is also a strong desire of Car- gill, with which the company has an offtake agreement for the hematite production. To achieve this important goal, the company has established carbon accounts with data from 2019 onwards and has set concrete goals/ KPIs for a reduction in the company's total CO 2 emis- sions. See more about this on page 57. DECENT WORKING CONDITIONS A decent working life is a prerequisite for society. Employees being safe and having influence on the busi- ness are part of Rana Gruber’s DNA. Rana Gruber has a long and strong tradition in the local environment, and fully supports the collaboration between employers, trade unions, and authorities to secure decent working conditions. Today, almost 100 per cent of the employ- ees are members of a trade union. A close collaboration with the trade unions is absolutely central to the devel- opment and growth of the company. See more about this on page 71. RANA GRUBER ANNUAL REPORT 202252 ESG REPORT SAFETY The health and safety of employees, customers and part- ners has always been Rana Gruber’s highest priority. The company has a separate HSE policy with the aim to conduct the operations with zero work-related accidents, based on thorough training modules, systems, and pro- cedures to identify hazards in the workplace. Rana Gru- ber has a long experience of safe operations, and the company has not had any serious injuries in the last 10 years. See more about this on page 82. RESOURCE UTILISATION Rana Gruber wants to utilise resources in the best pos- sible way. For several years, the company has worked according to the LEAN method. LEAN mining is a work and management tool where the point is to involve employees at all levels of the organisation, and to ensure that every activity is done as smartly and efficiently as possible. LEAN mining involves a strict focus on not wasting time or funds, while all significant changes must have a positive environmental impact. Read more about this on page 67. NATURE Rana Gruber has a goal to minimise the environmental impact from the operations and production. The com- pany has several certifications within ISO 9001 (quality management) and ISO 14001 (environmental certifica- tion), and also works with certification within the sus- tainability standard Towards Sustainable Mining (TSM) in collaboration with the Norwegian Mineral Industry. Rana Gruber works continuously to reduce the effects of inter- ventions in nature, and aims to rehabilitate and ensure the revegetation of affected areas. Read more about this on page 62. COMPETENCE AND DEVELOPMENT Rana Gruber shall be a business that contributes to increased competence internally and for the external environment, including the company’s partners. The company offers both apprenticeships for young people and further education for the employees throughout the operations. The company also gives educational institu- tions access to the business for various research pro- jects. Read more about this on page 77. LOCAL VALUE CREATION Rana Gruber is a stable and significant player in the local value creation. Mining is a fundamental part of Rana municipality's identity and narrative, and Rana Gruber is one of the region's largest and most important employ- ers. The position as a local cornerstone involves respon- sibility. Rana Gruber wants to take social responsibility beyond being a large workplace. The company collabo- rates with trade unions, neighbours, and local industry. Read more on page 84. RANA GRUBER ANNUAL REPORT 2022 53ESG REPORT The health and safety of employees, customers and partners has always been Rana Gruber’s highest priority. EQUALITY Rana Gruber employees have an obligation to avoid dis- criminatory practices with regard to gender, age, race, and religion. The company has zero tolerance for physi- cal, verbal, or sexual abuse and harassment in the work- place. The company has assessed its work with equality and diversity, and carried out a risk assessment relating to discrimination and harassment in accordance with the Norwegian Equality and Anti-Discrimination Act. Mining is traditionally a male-dominated industry, and the com- pany has a goal of employing more women. Read more on page 74. HUMAN RIGHTS Rana Gruber acknowledges a responsibility for those who, throughout the value chain, contribute to the com- pany being able to deliver its products in a good way. For 2022, Rana Gruber has carried out a due diligence assessment relating to human rights and decent working conditions, in accordance with the Norwegian Transpar- ency Act and thus the OECD's guidelines for responsible business. The company will provide a statement in line with the requirements in the act by 30 June 2023. Read more about this on page 79. Goals and ambitions SUSTAINABILITY STRATEGY Rana Gruber aims to be a leading business within sus- tainability in the mining industry, and the ambitions below have been set in a long-term perspective. It is important for the company to set specific goals and assess uncertainties related to goal achievement, so that necessary measures can be identified, and the company can assign responsibility in the organisation and thus achieve its goals. This is described in the following sections. Further, the work within the material topics is described in more detail according to the GRI Universal Standards 2021 throughout the ESG report. ENVIRONMENTAL Material topic Ambition Climate ■ Deliver CO 2 free products before the end of 2025 Nature ■ Minimise tailings and find alternative uses for the tailings ■ Minimise the discharge of solids into the river ■ Rehabilitate and ensure the revegetation of affected areas Resource utilisation ■ Utilisation of resources in the best possible way SOCIAL Material topic Ambition Decent working conditions ■ Base the business on the collaboration between employers, trade unions, and authorities for decent working conditions, and be a safe and reliable employer Competence and development ■ Contribute to increased competence internally and for the external environment, including the company’s partners Equality ■ Increase the amount of female employees to 33 per cent by 2027 (19 per cent today) GOVERNANCE Material topic Ambition Local valuecreation ■ Be a stable and significant player in the local value creation Safety ■ Prioritise safety and have zero work-related injuries RANA GRUBER ANNUAL REPORT 202254 ESG REPORT THE UN SUSTAINABLE DEVELOPMENT GOALS The UN Sustainable Development Goals (SDGs) are the world's plan to eradicate poverty, fight inequality, and stop climate change by 2030. These goals highlight societal challenges, but also promote solutions for the future. The sustainable development goals form the basis of the company’s work with sustainability. In Rana Gru- ber's newly established sustainability strategy, the com- pany has incorporated four out of seventeen sustainable development goals. The strategy shows how the com- pany will contribute to the achievement of the global sustainable development goals: RANA GRUBER’S CONTRIBUTION TO SDG 8: Employees being safe and having influence on the business are part of Rana Gruber’s DNA. Rana Gruber has a long and strong tradition in the local environment, and fully supports the collaboration between employers, trade unions, and authorities to secure decent working conditions. RANA GRUBER’S CONTRIBUTION TO SDG 9: Rana Gruber is working towards the goal of becoming the world's first supplier of CO 2 -free iron ore. This requires the entire operations to be sustainable – from extraction of ore in the mines to processing and loading of ore in the vessels. The company has made good progress with this project. RANA GRUBER’S CONTRIBUTION TO SDG 12: The company continues to increase the electrification of the operations. The company achieved an 86.3 per cent waste sorting rate. In addition, Rana Gruber works continuously to reduce the effects of interventions in nature, and aims to rehabilitate and ensure the revegetation of affected areas. RANA GRUBER’S CONTRIBUTION TO SDG 13: Rana Gruber wants to contribute to reducing the world's total CO 2 emissions. The global steel industry accounts for seven to eight per cent of total CO 2 emissions. The company has a high ambition of delivering fossil-free products by the end of 2025. The company has established carbon accounts and has concrete goals for a reduction in the company's total CO 2 emissions. SUSTAINABILITY GOVERNANCE STRUCTURE Sustainability permeates all operations and the organi- sational structure of Rana Gruber. The board of directors has the ultimate responsibility for corporate governance, including the oversight of stra- tegic planning and review of strategic processes. This includes the sustainability strategy. The CEO, supported by the board of directors, has the ultimate operational responsibility for the implementation of the strategic processes, including sustainability. The board of direc- tors is regularly informed by the executive management about Rana Grubers sustainability work and is respon- sible for overseeing the management of impacts caused by the companys activities. In cases of critical concerns applicable for the company’s work with sustainability, the CEO will communicate these to the board of directors if necessary. The environment and sustainability manager reports to the CEO. This person is responsible for the management of impacts, in collaboration with the CEO and other mem- bers of the executive management. The environment and sustainability manager is also responsible for preparing the information disclosed in the annual ESG report, with the CEO and the board of directors responsible for reviewing and approving the reported information. RANA GRUBER ANNUAL REPORT 2022 55ESG REPORT THE ENVIRONMENT Rana Grubers ambitions is to lead the way for the decarbonisation of the global steel industry. The company acknowledges the impact mining opera- tions have on climate and nature, and works systemati- cally to reduce the company's climate and environmental footprint and to use resources in an efficient and sus- tainable way. The company’s work for the environment is based on the UN sustainable development goals and the company’s three material topics relating to the environ- ment: climate, nature, and resource utilisation. The company acknowledges that, in addition to having a direct impact from the company’s own operations, the company also has an indirect impact related to upstream and downstream activities in the value chain. The company is in the process of mapping the indirect emissions and suppliers’ climate and environmental performances. The company’s aim to deliver carbon free products before the end of 2025 is a contribution to the decarbonisation of sec- tors that depend on the products Rana Gruber produces. RANA GRUBER ANNUAL REPORT 202256 ESG REPORT Climate RANA GRUBERS IMPACT Climate change is the greatest challenge of our time. In its sixth main report, the UN climate panel presents research that shows that climate change is accelerating and leading to consequences that are becoming increas- ingly intense. To succeed in limiting global warming to 1.5 degrees, all sectors must adapt and contribute. The steel industry is no exception. The international mining industry (includ- ing coal mining) is responsible for huge amounts of GHG emissions. According to the McKinsey report "Climate risk and decarbonisation: What every mining CEO needs to know", it accounts for about seven per cent of the total global emissions. As there will be a high demand for iron ore in the future, there is a need for low carbon and sustainable solutions going forward. Norway’s government saluted the min- eral sector towards the end of 2021, as minister of trade and industry, Jan Christian Vestre, stated that the world will need the mining industry if the green transition is to succeed. He expressed ambitious goals for making the industry’s operations in Norway the most sustainable in the world. Rana Gruber is ready to contribute to this tran- sition. The company is well aware that mining has an impact on the climate. Due to the impact of the mining sector in general, and Rana Gruber in particular, the company aims to become an iron ore producer contributing to a RANA GRUBER ANNUAL REPORT 2022 57ESG REPORT The iron ore deposits in the Dunderland Valley has been a source of value creation for generations. far more sustainable value chain than that of today. To this end, the company has set ambitious goals and aims to become the world’s first iron ore producer with zero CO 2 emissions by the end of 2025. The company is on track with this project. Rana Gruber is one of the iron ore producers with the lowest CO 2 emissions across all geographies (8.47 kilo- grams CO 2 -equivalents per tonne produced iron ore concentrate on the scope 1 and 2 emissions detailed below). Location wise, Rana Gruber has some advantages. There is a short distance from the mining site to the port at Gullsmedvik, meaning that there is no need for long-dis- tance transport. Hence, Rana Gruber has a good starting point for meeting the zero emissions target. Rana Gruber's processing plant is electricity-powered. The company works to replace the machines and vehi- cles powered by fossil fuels to machines and (autono- mous) vehicles powered by electricity. Regarding emissions from upstream activities, the com- pany delivers iron ore to the production of steel, which is used in sectors such as construction, infrastructure, and car manufacturing. These sectors are responsible for significant emissions. However, the steel industry in Scandinavia and Europe is at the forefront of developing sustainable solutions. Rana Gruber is ready to contribute to lower emissions in these industries. RANA GRUBER’S APPROACH Rana Gruber’s vision is to be a world-class sustainable mineral producer and the company seeks sustainable solutions in its daily activities. The company’s approach to climate issues is based on the Paris Agreement and the UN sustainable development goal number 13. The company works continuously to reduce the climate foot- print of its own operations and the indirect emissions related to upstream and downstream activities. Rana Gruber sees a great business opportunity in being able to offer CO 2 -free products and aims to be able to offer this in 2025. The company has a close dialogue with customers and is experiencing an increasing demand for CO 2 -free products. RANA GRUBERS AMBITION ■ Rana Gruber aims to deliver carbon free products by the end of 2025. To achieve this, Rana Gruber measures its greenhouse gas emissions, diesel consumption, and degree of elec- trification. Furthermore, the company calculates CO 2 per tonnes produced iron ore concentrate. Carbon emissions Rana Gruber reports its greenhouse gas emissions in accordance with the methodology and principles described in the GHG protocol. The major sources of greenhouse gas emissions in the company’s own operations are related to the mining process with transportation, stationary com- bustion and electric power being the main sources. Indirect emissions stem from upstream and downstream activities. The company acknowledges its responsibil- ity for indirect emissions and is in the process of map- ping scope 3 emissions according to the methodology in the GHG protocol. As of 2022, the reported indirect emissions stem from fuel-and-energy-related activities, waste, business travel, upstream transportation, and some purchased goods and services. Category tCO 2 e Transportation 13 728 Stationary combustion 214 Electric vehicles 0.3 Electric power (location based) 691 Fuel and energy related activities 3 457 Waste 461 Purchased goods and services 1424.6 Business travel 6.2 Upstream transportation and distribution 12.5 In 2022, Rana Gruber lowered the CO 2 -equivalents per tonne produced iron ore concentrate from 9.29 kilo- grams to 8.47 kilograms. This includes both scope 1 and scope 2 emissions. One measure that has contributed to this is the shut- down of the propane-driven heating facility. Heating of air in the underground mine has been done with propane up to and including the winter of 2022, when the com- pany decided to replace the propane-based heating facil- ity with an electric heating facility. In the winter of 2023, there will be a transitional phase with a diesel-driven heating facility. The company’s key measure to reduce greenhouse gas emissions is to replace fossil-powered vehicles and machinery with electric alternatives. At year-end, the company had ten electric cars, of which six were pro- cured in 2022 and four in 2021. In 2022, the company collected more information about scope 3 emissions than in 2021, such as emissions from RANA GRUBER ANNUAL REPORT 202258 ESG REPORT purchased goods and services. This resulted in more emissions being included in the carbon accounts. The company strives to have a better overview of its scope 3 emissions and to include these in the carbon accounts going forward. GHG EMISSION PER CATEGORY 2022 0% 20% 40% 60% 80% 100% Purchased goods and services Waste Fuel and energy related activities Electricity (location based) Electric veichles Stationary combustion Transportation Business travel Upstream transportation and distribution 71% 1% 4% 2% 7% 15% 0% 0% 0% ANNUAL GHG EMISSIONS PER SCOPE tCO 2 e 2020 2021 2022 % share of total emissions Scope 1 total 13 675 14 352 13 942 Transportation 13 597 13 636 13 728 69% Stationary Combustion 78 716 214 1% Scope 2 total 884 991 692 Electric vehicles - - - 0.002% Electric power location based 884 991 691 3% Scope 3 total 3 725 3 860 5 361 Waste 354 239 461 2% Fuel & Energy related activities 3 372 3 621 3 457 17% Purchased goods and services - - 1 425 7% Business travel - - 6 0.03% Upstream transportation and distribution - - 13 0.06% Total 18 284 19 202 19 995 100% Electric power market based 38 877 39 837 39 993 KEY PERFORMANCE INDICATOR 2020 2021 2022 Tonne iron ore 1 558 997 1 652 376 1 728 000 kgCO 2 e (Scope 1 & Scope 2) 14 558 600 15 342 500 14 633 900 kgCO 2 e/tonne iron ore 9.34 9.29 8.47 The full carbon accounts are externally assured by PwC and can be found on page 88. Electrification and energy use To succeed with the 2025 ambition, the company is dependent on efficient energy consumption and a transi- tion to fossil-free energy. This applies to both the mining machines and the rail transport. In 2022, the company’s use of electric power differed lit- tle from the previous year. However, the the company expects the use of electric power to increase as more RANA GRUBER ANNUAL REPORT 2022 59ESG REPORT electrical machinery will be used in the mine. At the same time, the company acknowledges that there is a potential to be more effective in terms of energy con- sumption and will work on this in the years ahead. The company’s fossil-driven mining machines will be replaced by electricity-driven alternatives. In 2022, the company has increased the electrification of the opera- tions. Further, an important step in the direction of full electrification has been the signing of a frame agreement with Sandvik on the supply of electric machines and sup- port for the new on-site infrastructure, including train- ing in operation and maintenance of the machines, and safety measures. The Trans4Mine study carried out by Sandvik forms the basis to identify the required battery capacity for the electrification process. The study also provides insight about the expected electric power consumption as well as the optimal location of the charging stations. For the railway transport, there is an on-going project with Sintef and other players to investigate the pros and cons of electricity-based solutions and hydrogen-based solutions. The company expects their recommendation to be finalised in the first half of 2023. Climate risk In 2022, the company has assessed its exposure to cli- mate risk and the consequences thereof. The assess- ment has been done in accordance with the framework and recommendations set by Task Force on Climate-Re- lated Financial Disclosures (TCFD). The company has concluded that it is exposed to phys- ical risks and transition risks, and has implemented measures to reduce its risk exposure. The relevant risks involve risks of increased rainfall and flooding as well as risks linked to uncertainty related to the EU Taxonomy and how this will impact Rana Gruber and the technical viability of the decarbonisation strategy. The company has concluded that it is well equipped to meet physical challenges brought about by climate change. For more information on the assessment on climate risk, see the statement provided in accordance with the rec- ommendations from TCFD on page 94. HIGHLIGHTS OF 2022 The company’s ambition is to become carbon free by the end of 2025 and all decisions are made in line with that target. The decisive measure to achieve this ambition is the replacement of fossil-driven machinery and transport to sustainable alternatives. The company has made good progress with this in 2022. Together with external suppliers and advisers, the com- pany has also worked to find the best solutions for the on-site infrastructure, especially with regard to charging and safety. This work prepares the ground for further electrification in the coming years. ■ Reduction scope 1 emissions: 3 per cent ■ Reduction scope 2 emissions: 30 per cent ■ More sources added to scope 3 emissions in carbon accounts of 2022 ■ Shutdown of the propane-driven heating facility in the mine ■ Signed letter of intent with supplier of electrical machines to be used in operations ■ Started to prepare for the transition to all-electric operations ■ Climate risk assessment and statement in accordance with the framework and recommendations set by Task Force on Climate-related Financial Disclosures. THE WAY FORWARD Rana Gruber's ambition is to lead the way for the decar- bonisation of the global steel industry. The company aims to deliver CO 2 -free products before the end of 2025, which involves a transition to renewable energy and a replacement of fossil-driven mining machines with elec- tricity-driven machines. High grade iron ore products help to reduce CO 2 emis- sions at the steel mills through less consumption of iron ore and less waste from the steel production process. Products with higher iron content are therefore key for reducing the environmental footprint of the steel indus- try. Rana Gruber aims to increase the minimum iron con- tent in its hematite product from 63 to 65 per cent. The company has implemented several measures to this end and expects to deliver the improved product by the end of 2024. As regards indirect emissions, the company is in the pro- cess of mapping emissions in its upstream and down- stream activities. The goal is to have an overview of all relevant scope 3 emissions by the end of 2025. RANA GRUBER ANNUAL REPORT 202260 ESG REPORT RANA GRUBER ANNUAL REPORT 2022 61ESG REPORT Replacement of fossil- driven machinery and transport contributes to the company’s ambition to become carbon free by the end of 2025. Nature RANA GRUBERS IMPACT According to the UN climate panel, sustainable man- agement of nature and biological diversity is crucial for our ability to adapt to climate and environmen- tal changes. But the general development is going in the wrong direction, and according to the UN Nature Panel, the loss of nature is as big a threat as climate change. As much as 75 per cent of all ecosystems on land and 66 per cent in the sea have been sig- nificantly altered as a result of climate change and human activity. A healthy nature is also important for a resilient econ- omy. According to the World Economic Forum, more than half of the world's economy is strongly or moder- ately dependent on nature. Loss of biological diversity and ecosystem collapse is ranked as one of the five big- gest threats humanity will face by 2030. On 19 December 2022, the first global nature agreement was established. This includes, among other things, an agreement on the protection of 30 per cent of nature and oceans by 2030 and a requirement that large transna- tional companies monitor and assess the effects their business may have on biological diversity. Mining companies know that they have an impact on nature. The key question is therefore how this impact can be minimised. Rana Gruber wants to take its share of the responsibility to reduce negative impact. The greatest impact on nature stems from the compa- ny’s own operations, which are based on the extraction of ore. The company also affects nature through emis- sions. This concerns discharge of tailings into the river and the sea, as well as emissions of dust and green- house gases into the air. The company believes that there are risks associated with interventions in nature and that nature restoration is expensive. Further, the company is responsible for impact on nature related to the company’s purchase of products and ser- vices as well as downstream activities related to the use of the iron ore in industries such as construction, infra- structure, and car production. Downstream activities related to the use of iron ore can also contribute to an impact on nature. Industries such as construction involve consumption of resources, land use, and can have an impact on biological diversity. Rana Gruber is aware of this indirect influence and has a close dialogue with its customers. RANA GRUBER’S APPROACH Rana Gruber works continuously to reduce its impact on nature and has a goal of minimising the environmental impact of its operations. The company focuses on sev- eral areas, including rehabilitation of sites, waste man- agement, spilling to water, and emissions to air. The company has an agreement with the Norwegian Environment Agency and the Directorate of Mining to allocate funds for clean-up, control, and monitoring of e.g. sea landfill, in the event of a closure or bankruptcy. Further, Rana Gruber wants to contribute to a sustain- able steel industry and will apply for membership in RANA GRUBER ANNUAL REPORT 202262 ESG REPORT Responsible Steel during 2023. Responsible Steel is the steel industry's first global standard and certification ini- tiative. Regarding impact related to upstream activities, the company is in the process of assessing the environmen- tal footprint of all suppliers and business partners that provide the company with goods and services. This is conducted by means of a supplier self-assessment pro- cess which also covers human rights and decent work- ing conditions. Downstream activities can also contribute to an impact on nature. Industries such as construction lead to large resource consumption, land use, and can have an impact on biological diversity. Rana Gruber is aware of this indi- rect impact and has a close dialogue with its customers. RANA GRUBERS AMBITIONS ■ Minimise tailings and find alternative uses for it ■ Minimise discharge of solids to the river ■ Rehabilitate and revegetate affected areas CERTIFICATIONS Rana Gruber has obtained several certifications, includ- ing ISO 9001:2015 (quality management), ISO 14001:2015 (environmental management) and EN 12878. The com- pany is also working to obtain a sustainable mine certifi- cation in collaboration with Norwegian Mineral Industry. Membership in this trade association commits Rana Gru- ber to participate in the Towards Sustainable Mining (TSM) initiative. Launched in 2004 by the Mining Associ- ation of Canada, TSM provides a system to help mining RANA GRUBER ANNUAL REPORT 2022 63ESG REPORT Rana Gruber works continuously to reduce its impact on nature and has a goal of minimising the environmental impact of its operations. companies to evaluate and administer their environmen- tal and social responsibilities. It provides a fully tested reporting programme used in several countries around the world. COMMITMENT TO THE TSM GUIDING PRINCIPLES Rana Gruber has committed to comply with TSM’s guid- ing principles. These principles aim at safeguard of the environment, a secure workplace, and protection of indigenous communities and other stakeholders. The TSM initiative covers eight operational areas, three of which are linked to nature and environment: 1. Prevention of child and forced labour 2. Contact with NGOs, local communities, and indigenous peoples 3. Crisis management and communication 4. Health, safety, and the environment (HSE) 5. Tailing management 6. Management of energy consumption and GHG emissions 7. Water stewardship 8. Biodiversity conservation management Known as assessment protocols (or just protocols), these operational areas have been designed to help the reporting businesses to understand and comply with TSM’s guiding principles. REDUCING IMPACT ON NATURE AND BIODIVERSITY Rana Gruber works continuously to reduce its impact on nature and biodiversity. The company follows the regu- lations and laws set by the Norwegian authorities in this area and is aware of its responsibility to conduct respon- sible mining operations. RANA GRUBER ANNUAL REPORT 202264 ESG REPORT Spiral concentrators help extract iron ore and play an important role to increase the iron content of the hematite concentrate, in line with the company's strategy. The company's mining operations are conducted in accordance with the regulatory plan of the Directorate of Mining. The area where Rana Gruber operates is not defined as a vulnerable area nor does it contain red list species. The open-pit mine consists of rock, and a direct conse- quence of the operations is emissions of dust to the sur- rounding nature. The company works to get more insight into the nature and severity of these emissions. The Rana river is adjacent to the mines. There is salmon in the river and Rana Gruber has permission to dis- charge water and solids into it, in accordance with regu- lations that set limit values for pollution and emissions. When assessing any new operations and changes to existing operations, Rana Gruber assesses the impact on nature and the ecosystem. The company will then comply with regulatory plans and permits from the Norwegian authorities, including the Norwegian Envi- ronment Agency and the Directorate of Mining. For instance, Rana Gruber has an on-going process with a regulatory plan for Ørtfjell, where the company assesses biological diversity and valuates the karst areas. This is done in accordance with new require- ments from the authorities. CHEMICAL-FREE PRODUCTION Most mining companies use chemicals in their opera- tions, which helps to produce better, cleaner, and more expensive products. Despite these advantages, Rana Gruber has developed a chemical-free production, for the sake of environmental concerns. WASTE MANAGEMENT AND DISPOSAL TO NATURE A universal challenge for all mining companies is waste management. The industry has been subject to justified criticism due to poor waste handling. Rana Gruber has a system for marine deposition in the Rana Fjord. These waters were bereft of life in the 1970s following mas- sive pollution from coking plant discharges. After the closing of the coking plant in 1979, the fjord has regen- erated faster than expected. Tailings from Rana Gruber have been beneficial in this specific case, since they con- sist of clean sand and function as a lid locking in the old pollution on the seabed. As a result, life has returned to these waters. Naturally, however, there is no ecosystem of seabed-dwelling organisms. Rana Gruber monitors the discharge of tailings to the sea, both continuously and through planned controls with assistance from consultants (seabed scanning and sam- pling of bottom sediments). The company also looks at alternative waste management solutions, together with partners and the government, for the purpose of identify- ing better and more sustainable solutions for the future. SPILLING TO WATER Rana Gruber currently holds a permit from the Norwe- gian Environment Agency to spill solid particles into the Rana River after ore extraction at the mine. This is issued pursuant to Norway’s Act on Protection Against Pollution and Waste. When extracting ore, fine particles are generated both from drilling and from transport. These particles follow the production water through the mine. The purifying plant in the mine consists of three settling pools and one clean water pool. The production water passes through a settling basin so that particles are sedimented (and later deposited), while purified water is released to the RANA GRUBER ANNUAL REPORT 2022 65ESG REPORT Rana river. Spilling of fine particles (so-called suspended substance) to the Rana river has a limit value of 50 mg/l. The company is looking into how these processes can be improved, particularly in regards to discharges to the river. In the event of heavy rainfall and melting of snow, huge amounts of water enter the mine and thereby the purifi- cation plant. In such events, the interval between water entering and leaving the basin is too short to achieve a satisfactory sedimentation, which results in more sus- pended substances entering the Rana river. Because of this, the company is working to improve the purifica- tion system and to reduce the spilling of suspended sub- stances to the river. EMISSIONS TO AIR Rana Gruber has introduced several measures to reduce emissions to air. One measure is to store products under a water mist system, which prevents dust from escaping the surrounding areas. A second measure is related to the combustion of rub- ber, which takes place in an incinerator about once a month. During combustion, smaller amounts of sul- phur and dust are emitted to the air. With the help of an external laboratory, emissions are sampled at certain intervals. This monitoring enables the company to keep emissions far below the permitted limit. A third measure is the filtering system used in the pro- duction of Colorana, specifically, in the production of iron oxide pigment. The filtering systems run continuously and emit very small amounts of dust. In the event of sys- tem failure or damaged filter bags, however, the emis- sions may increase for a limited time. There have been some challenges with obtaining rep- resentative measurement results from the filtering sys- tems. The company has therefore worked to get an emission meter installed, so that the company can mon- itor emissions and avoid exceeding the permitted emis- sion limits. In the current transitional phase, however, emission measurement will be done with the use of an external laboratory. REHABILITATION OF NATURE Rana Gruber is determined to ensure that sites are reha- bilitated in the best possible way, which involves refill- ing and revegetating open-cast mines after extraction of ore is terminated. This is done in accordance with legal regulations and in cooperation with relevant local and national governmental institutions. In this context, the Stortjønna lake provides a good example. When extraction was terminated in this area, Rana Gruber collaborated closely with Statskog to reha- bilitate the lake in the best possible way. Stortjønna was filled with rocks and then covered with soil to allow the natural restoration of vegetation. The goal was to enable migration routes for elk and other wild animals, angling and outdoor life, and rough grazing. Just two years after extraction ended at Stortjønna, plants and trees are now starting to grow, and elk have reclaimed their migration route. Rana Gruber’s goal is to rehabilitate active open-cast mining sites to the largest possible extent, for the pur- poses listed above, and for the benefit of the local com- munity. HIGHLIGHTS OF 2022 Rana Gruber works continuously to reduce its impact on nature and has a goal of minimising the environmental impact of its operations. The company focuses on sev- eral areas, including rehabilitation of sites, waste man- agement, spilling to water, and emissions to air. The companys ambitions is to minimise tailings and find alternative use for it, minimise discharge of solids to the river and rehabilitate and revegetate affected areas. In 2022, the company has developed plans for the work to be done going forward. To contribute to limit impact on the environment and nature in the supply chain, the company has developed a supplier self-assessment which aims to assess the environmental footprint of all suppliers and business partners that provide the com- pany with goods and services. The assessments will start in 2023. THE WAY FORWARD A key question for mining companies going forward is how impact on nature can be minimised. Rana Gruber wants to take its share of the responsibility to reduce negative impact and aims to do this through ambitions that minimise tailings and discharge of solids to the river. In addition, the company aims to rehabilitate and revegetate nature affected by the operations. Further, the company is well aware of the impact related to the production of goods and services in the supply chain. Assessment of impact by suppliers and business partners on the environment, nature and biodiversity will therefore be an increased focus for the company going forward. RANA GRUBER ANNUAL REPORT 202266 ESG REPORT Resource utilisation RANA GRUBERS IMPACT The major cause of climate and natural change is the world's enormous consumption of resources. According to a report from the International Resource Panel and the UN Environment Programme, economic growth and consumption of materials, input factors, and energy have increased proportionally with greenhouse gas emissions since 1970. In the same period, biodiversity has been greatly reduced according to the World Wide Fund for Nature's Living Planet report 2022. Today, resources are consumed faster than we are able to recover and regenerate them. This contrib- utes to nature losses that exceed tolerable limits, large amounts of waste, and increased greenhouse gas emissions. The report Circularity Gap Report Norway shows that the Norwegian economy is less circular than the average in the world and that as much as 97 percent of the resources we extract from the earth do not return to the circuit. In order to safe- guard and use resources in a more sustainable way in the future, a reduction in resource consumption and a transition to a circular economy is absolutely necessary. Business can play an important role for this transition. Mining involves utilisation of large amounts of resources. It is built on the extraction of natural resources and the use of input factors such as water, energy, and concrete. Furthermore, the degree of reuse of resources is limited. RANA GRUBER ANNUAL REPORT 2022 67ESG REPORT When extraction of ore is terminated, Rana Gruber aims to rehabilitate sites in the best possible way. As regards upstream activities, many goods used by the company are particularly resource-intensive to extract and produce. Further, the iron ore Rana Gruber pro- duces is used in industries and products which are also resource-intensive. RANA GRUBERS APPROACH For Rana Gruber, it is important not to waste time, funds, or resources. The commitment to LEAN mining applies to employees at all levels of the organisation and ensures that every activity is done as smartly and efficiently as possible. At the same time, all changes must have an environmental improvement effect. In the company’s own operations, resources should be utilised in the best possible way. This means making sure to utilise the resources the company extracts in the best possible way, minimising waste, and making sure to contribute to circular solutions where possible. RANA GRUBERS AMBITION ■ Utilise resources in the best possible way HANDLING OF WASTE As a mining company, Rana Gruber generates large amounts of tailings from the processing of ore, and masses of waste rock from mining. When it comes to waste other than tailings, the company works continu- ously to reduce as much waste as possible and has an ambition not to generate residual waste in the future. Rana Gruber's largest waste fractions in 2022 were steel, paper, plastics, electronic waste, and waste oil. In terms of tonnage, the largest fraction is metal complexes, which is recycled by Celsa Nordic Mining. The company only pro- duces limited amounts of hazardous waste, with waste oil being the largest proportion of this waste. In 2022, the sorting rate was 86 per cent, down from 88 per cent in 2021. The decrease is the natural result of large quantities of metal and cables having been sent for recycling in 2021 relating to a major clean-up process in the company, as these items are more easily recycla- ble than other items. The company pays out bonuses for high sorting rates, and the 2022 rate was sufficiently high for bonus payment to the relevant employees. In terms of contributing to a more sustainable resource utilisation, the recycling of materials is an important measure for Rana Gruber. Good sorting and recycling have a clear environmental effect and also reduces costs. The company aims to recycle all waste and has initiated measures and training for better sorting. Of 1 028 tonnes of waste in 2022, 52.1 per cent went to recycling of materials. This concerns scrap iron, plastics, glass, electronic waste, cardboard/paper, etc. Combus- tible waste, such as wood, plastics, and residual waste is incinerated and recovered as energy. This accounts for approx. 25 per cent of the total waste produced by the company. RANA GRUBER ANNUAL REPORT 202268 ESG REPORT In terms of contributing to a more sustainable resource utilisation, the recycling of materials is an important measure for Rana Gruber. Hazardous waste is handled according to current laws and regulations. The company has routines for emptying oil separators and waste oil tanks, so that oil does not escape into the environment. The company has good control over what happens to waste. Everything that is capable of being recycled is recycled and only small amounts go deposition in the Rana fjord. WASTE MANAGEMENT Waste management (tonnes) Amount of total waste management (%) Deposition of tailings 65.2 6.3 Recycling of materials 536.0 52.1 Energy recovery 393.3 38.3 Reuse 23.7 2.3 Composting 9.8 1.0 USE OF WATER In the underground mine, water is mainly taken from a separate clean water basin with rainwater. The water is used for cleaning machines and the operation of drilling rigs. Drinking water and water for cooking in the mine is water purchased in cans. Water from the Rana river is used in the extraction pro- cess in the processing plant. In 2022, 23.9 million cubic meters of water from the river were used. The water in the river is not a limited resource so this does not affect the local community to any extent. With regard to discharge of water, the company follows regulations by the Norwegian Environment Agency. Only tailings can be discharged with the water, including sol- ids such as mine sludge and fines. To ensure compliance with this, the company has installed a purification sys- tem which involves a basin for collecting solids and oil, as well as devices for the separation of permitted and unpermitted substances. Monitoring of potential emissions via water is required by law, and if it shows high values, measures will be ini- tiated. HIGHLIGHTS OF 2022 Mining involves utilisation of large amounts of resources. Furthermore, the degree of reuse of resources is lim- ited. For Rana Gruber, it is important not to waste time, funds, or resources, and the companys ambition is that resources should be utilised in the best possible way. Important measures in this regard are handling of waste. Sorting and recycling are important areas of focus for Rana Gruber, and the company aims not to generate residual waste in the future. Further, water consumption should be done in a responsible and sus- tainable way and the company has measures to limit unnecessary water use and use rainwater when pos- sible. ■ Sorting rate: 86 per cent ■ Recycling of materials: 52.1 per cent ■ 23.9 million cubic meters of water from the river were used (not a limited resource) ■ Rainwater used for cleaning machines and the operation of drilling rigs in the mine THE WAY FORWARD The utilisation of resources contributes to nature losses that exceed tolerable limits, large amounts of waste, and increased greenhouse gas emissions. A sustainable use of materials and resources is therefore needed to reduce emissions and protect and restore nature. Rana Gruber wants to take its share of the responsibility and aims to do this through its ambition that resources be utilised in the best possible way in the company’s operations. The company will continue to work to increase both the sorting rate and materials recycling. Rana Gruber will also continue to work on mapping resource utilisation and the potential for more sustainable solutions. Assess- ment of impact by suppliers and business partners on the environment and resource utilisation will therefore be an increased focus for the company going forward. RANA GRUBER ANNUAL REPORT 2022 69ESG REPORT RANA GRUBER ANNUAL REPORT 202270 ESG REPORT Rana Gruber promotes equality and diversity in company and the industry. SOCIAL MATTERS Rana Gruber aims to be a safe and responsible employer which contributes to increased equality and diversity in the industry. The company shall contribute to safeguarding human rights and decent working conditions in its own business, supply chains, and with its partners. The company acknowledges that it can do more to contribute to positive changes and is aware of its responsibility. The company’s work on social matters is based on the UN sustainable development goals and the company’s three material topics relating to social matters; decent working conditions, equality, and human rights. Decent working conditions RANA GRUBER’S IMPACT Rana Gruber is a cornerstone of Mo i Rana and an impor- tant employer in the local community. The employ- ees are the company’s most important resource. The company aims to be a safe, reliable, and responsible employer. The mining industry is characterised by phys- ical and demanding work and the working hours are largely shift-based. Rana Gruber therefore implements several measures to ensure that the employees have a good and safe workday. RANA GRUBER’S APPROACH Rana Gruber has a long and strong tradition in the local community, and fully supports the collaboration between trade unions, employers, and authorities for decent working conditions. Almost 100 per cent of the employ- ees are members of a trade union. A close collaboration with the trade unions is central to the development and growth of the company. The company has great confidence in its employees and takes their interests seriously. The company is commit- ted to complying with the UN's universal declaration on human rights and the International Labour Organisa- tion convention, as well as the Ethical Trading Initiative Act, which regulates and defines the rights and duties of companies and employees. As an employer, Rana Gruber respects the employees' right to form and join trade unions of their own choice. The company also encourages these activities. The com- pany's management has regular collaboration meet- ings with union representatives in the work environment committee. The committee collaborates on work regula- tions that define standards relating to employment and dismissal, working hours, wages, and rules of order for the company. Safety and good work environment are important values at Rana Gruber. The company undertakes assessments of the physical work environment at the company’s sites every year, based on the Norwegian Labour Inspection Authority's guidelines and standards. The company carries out employee support conversa- tions every year and health examinations of employees at least every three years. Rana Gruber has established a whistleblowing system and the management collaborates with employee repre- sentatives to ensure that the company has a culture for reporting objectionable conditions. The company has a well-established culture for reporting hazardous situa- tions or incidents, and the company's handbook – which describes safety procedures – has been delivered to all employees. All employees are covered by insurance schemes, employee rights, and occupational health services. The employees have a large influence on the company's deci- sions through board directorship and through the gen- eral meeting as shareholders of the company. RANA GRUBER ANNUAL REPORT 2022 71ESG REPORT RANA GRUBERS AMBITION ■ Promote the collaboration between trade unions, employers, and authorities for decent working conditions, and be a safe and reliable employer. NEW HIRES, STAFF TURNOVER AND PARENTAL LEAVE In 2022, the company’s workforce turnover was low (7 per cent), and great emphasis was placed on ensuring a good and secure work environment for employees. The company hired 17 employees – 4 women and 13 men. At Rana Gruber, no distinction is made between employ- ees in terms of insurance schemes, pensions, and other rights. Everyone has access to life insurance, disability insurance, health insurance, pension provision, and the right to parental leave. This includes full-time and part- time permanent employees, temporary employees, and apprentices. The exception is contracted personnel, as these are hired on an hourly basis. 16 employees were on parental leave in 2022 – 6 women and 10 men. The total number of employees who returned to work after taking parental leave was 16 – 100 percent. See appendix page 119 From 1 November 2021, the health insurance has included physiotherapy (up to 6 times per year) and the need for urgent psychological assistance. The company is listed on the Oslo Stock Exchange and shares are thus available to all employees HEALTH AND WORK ENVIRONMENT ASSESSMENTS Rana Gruber shall provide safe and hygienic working conditions, and the company places great importance in the employees' physical and mental health. The company conducts annual physical work environ- ment assessments in order to map Rana Gruber employ- ees’ exposure to hazardous substances, dust, and noise. These assessments are based on guidelines and stand- ards from the Norwegian Labour Inspection Authority and are carried out by Nemko Norlab. The assessment involves a detailed occupational hygiene assessment, covering a minimum of six measurements in each group of workers with comparable exposure to an unwanted item, and a statistical assessment of the results. The analysed results are combined with risk assessments and a mapping of potential measures for reducing expo- sure to the unwanted item. These interventions always aim to remove the source of the unwanted item as much as possible. Measurements carried out in 2022 show that the com- pany’s measures have been satisfactory, including the routines for cleaning work clothes and machines to min- imise exposure to quartz. The annual employee support conversations are conducted by the relevant manager for each employee. All employees are entitled to a health examination at least every three years. This is carried out by the corporate health service supplier “Helse og sikkerhet” and is adapted to the employee's health and everyday working life. The corporate health service supplier is an important sup- plier and partner for Rana Gruber. It also takes part in the physical work environment assessment and is available for urgent needs against a deductible. It also assists with risk assessments and advice related to, for example ergo- nomics use of chemicals in the laboratory, work tasks for pregnant women, and other adjustments in working condi- tions for employees who need a temporary adjustment. In 2022, the corporate health service supplier has, among other things, assisted with the mapping of noise in the processing plant. All employees have also been offered a free flu vaccine. The corporate health service provider has a permanent representative in the work environment committee. The corporate health service provider also provides courses in safety and team work for the company’s safety representatives and others if they want/need this. For some employees, these courses are required by law. The health service provider also has an occupa- tional hygienist who participates in various meetings and inspections, and is a resource for Rana Gruber. For further information about health and safety, please see page 82. HIGH LEVEL OF UNIONISATION Rana Gruber fully supports the collaboration between employers, trade unions, and authorities for decent working conditions. Close and trustful cooperation with the unions is crucial for the company’s development and growth. As an employer, Rana Gruber both respects and encourages employees to form and join unions of their own choice. The unionisation of Rana Gruber employees is close to 100 per cent. The management holds regular meetings with elected union officers through the work environment commit- tee, and collaborates on framing rules on matters such as recruitment and dismissal, working hours and wages, and discipline on the company’s sites. RANA GRUBER ANNUAL REPORT 202272 ESG REPORT Rana Gruber wants to encourage constructive discus- sion and openness in negotiations, and makes provisions for communication with all employees, for the purpose of handling conflicts or other concerns. Moreover, employ- ees have influence on the company’s decisions through board directorship, and through the annual general meeting as shareholders. WHISTLEBLOWING Each and every employee has the right to report irreg- ularities in the company they work for. Effective whis- tleblowing mechanisms can be a valuable resource for risk management, protection against financial losses, lia- bilities, and reputational damage. In collaboration with union officials, the management therefore ensures that Rana Gruber’s whistleblowing system for the reporting of irregularities is in place. The company is also responsible for making sure that whistleblowers do not experience any direct or indi- rect sanctions. It is in Rana Gruber’s interest that these mechanisms are well known among the employees, and the company will work continuously to train and guide employees in collaboration with union officials. In 2022, there were no registered whistleblowing cases. HIGHLIGHTS OF 2022 Rana Gruber aims to be a safe, reliable, and responsi- ble employer. The employees are the company’s most important resource and shall be provided safe and hygienic working conditions. Further, Rana Gruber places great importance in the employees' physical and mental health. In 2022, Rana Gruber has conducted physical work envi- ronment assessments in order to map Rana Gruber employees’ exposure to hazardous substances, dust, and noise. The turnover in the company has been low (21 employees, 7 per cent). The company has 17 new hires and 16 has been in parental leave. ■ New hires: 17 ■ Turnover: 7 per cent ■ Sick leave: 7.48 per cent ■ No whistleblowing cases ■ Unionsation close to 100 per cent ■ Health insurance and parental leave offered to all employees (including permanent employees, temporary employees, and apprentices) ■ Employee survey completed for all employees ■ Health examination completed for employees subject to this ■ Physical work environment assessments conducted at the mine, laboratory, and office space ■ Mapping of noise is developed for buildings in Gullsmedvik THE WAY FORWARD Rana Grubers ambition is to promote the collabora- tion between trade unions, employers, and authorities for decent working conditions, and be a safe and relia- ble employer. A focus area going forward will be to con- tinue promoting good physical and mental health for all employees. Conducting physical environment assess- ment annually is an important measure in this regard, as well as offering health services and insurances to all employees, regardless of whether they are full-time, part time, temporary employees, or apprentices. The com- pany aims to have a low turnover and sick leave, and will continue to work closely with the unions and encourage the unionisation of employees. The sick leave percentage for 2022 may be partially related to Covid. Also, an unusually high number of employees got the seasonal flu. The company expects- this number to drop in 2023. RANA GRUBER ANNUAL REPORT 2022 73ESG REPORT Equality RANA GRUBER’S IMPACT Mining is traditionally a male-dominated industry. The work in mining is largely physical, and the working time can be a challenge. Historically, this has made it chal- lenging to recruit women to the industry. In 2022, Rana Gruber carried out an analysis and assess- ment of the company’s work with equality and non-dis- crimination. The assessment was made on the basis of a checklist prepared by the equality representative – adapted to the company’s work to comply with the Equal- ity and Anti-Discrimination Act. The assessment shows several conditions that can con- tribute to preventing equality and diversity in the busi- ness. Among other things, the company's operations are largely based on shift work, which can prevent equal- ity. Furthermore, the work is by its nature physically demanding and requirements for strong physique can contribute to discrimination. Due to security reasons, the company has a requirement that all employees must speak Norwegian. This language requirement can be an obstacle to a diverse workplace and thus contribute to discrimination. Furthermore, Rana Gruber is located in a region that is not characterised by great ethnic diversity. The mines and processing plant are limiting in terms of accessibility. The administration building from 2012, on the other hand, is adapted to several mercantile functions and meets the requirements for universal design. Furthermore, the assessment showed that there is a lack of concrete goals and measures that address work on equality and anti-discrimination, and that the vision, guidelines, and work on equality and diversity are not well communicated in the organisation. For more information about conditions the company has identified as possible obstacles to equality and anti-dis- crimination, see the equality statement on page 112. RANA GRUBER’S APPROACH Rana Gruber aims to contribute to increased equality and diversity in society by promoting equality and anti-dis- crimination in the mining industry in general and in the company in particular. The company shall avoid discrim- inatory practices with regard to gender, age, race, and religion, and has zero tolerance for physical, verbal, or sexual abuse or harassment in the workplace. Consideration of equality and anti-discrimination is also included in the personnel policy. Active cooperation between the management of the com- pany and employee representatives through the trade unions and their representatives is important for the work on equality and anti-discrimination. There is a close and good cooperation in the company's work environ- ment committee. In addition, representatives from the executive management team and the employee organisa- tions meet regularly. At Rana Gruber, the most qualified and suitable candi- date will be chosen for employment. The HR department has the final say on hires, and ensures that the com- pany takes care of considerations related to equality and RANA GRUBER ANNUAL REPORT 202274 ESG REPORT diversity in the hiring process. Furthermore, trade union representatives receive the applicant lists, and can pro- vide input. The company has also mapped and initiated physical measures that will comply with requirements for uni- versal design and other physical measures that can contribute to promoting equality and diversity. This applies, among other things, to ergonomic adaptations such as the possibility of raising/lowering the worksta- tion. Based on identified conditions that can prevent equal- ity and non-discrimination, Rana Gruber has started the process of establishing a strategy for increased equal- ity and diversity that will be discussed by the work envi- ronment committee, the executive management, and the board of directors. The company acknowledges that targeted efforts must meet the requirements set by the Norwegian Equality and Anti-Discrimination Act. The strategy is to be completed in 2023. The company sees training in company principles and guidelines as an essential part of the work to increase equality and diversity. The strategy and associated measures and guidelines shall be well known in the company, and the company shall develop a plan for train- ing in equality and diversity work. RANA GRUBERS AMBITION ■ 33 per cent female employees by 2027 RANA GRUBER ANNUAL REPORT 2022 75ESG REPORT The underground canteen is a place for meals and socialisation. PRINCIPLES AND GUIDELINES FOR DIVERSITY AND INCLUSION AT RANA GRUBER: ■ Rana Gruber shall avoid discriminatory practices relating to gender, age, race, and religion, and the company does not tolerate physical, verbal, or sexual abuse or harassment in the workplace. ■ The company should select the best qualified and most suitable candidate for all positions. ■ The HR department should have the final say for recruitments. This is to ensure that considerations related to gender equality and diversity are taken into account in the recruitment process. Relevant union representatives shall look at the list of applicants and provide input. First-line managers (i.e. managers of shifts and departments) shall participate in interviews together with the relevant line manager and HR manager. The final decision shall be made by the HR manager, and the union representative shall be informed of the decision. ■ Considerations of equality and anti-discrimination shall be taken into account in the personnel policy. ■ The management shall collaborate with union representatives to ensure that objectionable matters are communicated through the whistleblowing system. THE COMPANY'S WORK FOR INCREASED EQUALITY AND ANTI-DISCRIMINATION Consideration of equality and anti-discrimination is cen- tral to Rana Gruber and is included in the personnel pol- icy. The company continuously works to increase the proportion of women in the company, including in man- agement positions and representational positions. The company has a principle of working to avoid discrimi- natory practices with regard to gender, age, race, and religion and has zero tolerance for physical, verbal or sexual abuse or harassment in the workplace. Employees can report discrimination anonymously through the company's whistleblowing system. Notices through this system are received by the HR department and the employee representative in the work environ- ment committee. No cases of discrimination have been reported in 2022. Salary, and any salary differences, are continuously monitored in the company. The salary survey from 2022 shows that the company does not have objectionable gender differences when it comes to salary. Any dif- ferences have their natural explanation (seniority etc.). Salary differences are reviewed annually with union rep- resentatives. For more information about gender distribution and sal- ary differences, see page 120. HIGHLIGHTS OF 2022 Rana Gruber aims to contribute to increased equal- ity and diversity in society by promoting equality and anti-discrimination in the mining industry in general and in the company in particular. In 2022, the company has reviewed its work with equal- ity and diversity and conducted a risk assessment relating to the company's work against discrimination and harassment in accordance with the Equality and Anti-Discrimination Act. A number of measures have been implemented in 2022 as a result of this assessment. Among other things, the company's ambition for the proportion of female employ- ees has been added to the company’s job adverts. Fur- thermore, the company has done work to get more women to take up representational positions and man- agement positions. The new female employee represent- ative in the board of directors is a result of this work. The company has also worked systematically to make sure the corporate culture is consistent with equality and anti-discrimination. ■ In 2022, women accounted for 48 of Rana Gruber’s 286 employees. ■ The executive management team of four includes one woman, while the female proportion of the board of directors is 40 per cent. ■ Review of the company’s work with equality and diversity is completed. ■ No incidents of discrimination reported. For more information about Rana Gruber’s work with equality and anti-discrimination, see the equality state- ment on page 112. THE WAY FORWARD In 2023, Rana Gruber will establish a strategy for increased equality and diversity in the business. The company’s ambition is to have 33 per cent female employees by 2027 and that more women take on rep- resentational positions and management positions. As part of ongoing strategy work for equality and diversity, the company will establish relevant KPIs. The company will work to communicate the strategy to employees and to establish a plan for training in strat- egy, guidelines, and measures for increased equality and anti-discrimination. RANA GRUBER ANNUAL REPORT 202276 ESG REPORT Competence and development RANA GRUBER’S IMPACT Rana Gruber depends on competent employees who want to contribute to the development of the mining industry. Lack of professional competence is a chal- lenge and competence and training require time and resources. The company particularly wants to target girls, as the proportion of women in the industry and the company is lower than desirable. In 2022, Rana Gruber's HR department and employees from the mine visited upper secondary schools to engage young people in the opportunities that exist in the mining industry. RANA GRUBER’S APPROACH A top priority for the company is to enhance the exper- tise of Rana Gruber employees. This entails covering educational costs, such as course fees, learning mate- rials, and PCs. Paid leave is also provided for meetings, travel, and examinations related to further educa- tion. This has encouraged both master’s degrees and PhDs. The company has also awarded scholarships and apprenticeships with a range of specialisations to upper secondary pupils. RANA GRUBER ANNUAL REPORT 2022 77ESG REPORT To enhance the expertise of Rana Gruber's employees is a top priority. Dropouts from upper secondary schools are among Norway’s major concerns for adolescents. Rana Gruber therefore believes that commitment to young individ- uals is among the most important contributions which Norwegian industrial companies can make to their local communities. One of the company’s most valuable con- tributions is the recruitment of unskilled young people. Through training and mentoring, young dropouts end up with qualifications and new opportunities in life. Rana Gruber also supports research and educational institutions. The company funds the Science Centre in Mo i Rana, a mining-relevant educational program at the Norwegian University of Science and Technology, and the associated academic staff. In addition, the com- pany has an academic partnership with the University of Tromsø. RANA GRUBERS AMBITION ■ Contribute to increased competence internally in the organisation and for the external environment, including the company’s partners. TRAINING, COMPETENCE AND FURTHER DEVELOPMENT Rana Gruber has a continuous focus on training and further development of the company's employees. All employees are taught about, among other things, the company, operations, safety, and work tasks. Further- more, specialised training is provided when needed in the various units of the operations. The training mainly takes place through the company's electronic training platform. The department managers are responsible for necessary and relevant training. Employee support conversations shall be conducted annually for all employees with the relevant manager. In 2022, 16 of the company's employees did not have an employee support conversations. The company aims to provide all employees with the necessary training to perform a number of different tasks. This involves extra training and courses that make the operations less vulnerable in connection with holi- days and illness. When several people are able to per- form different tasks, it is also easier to ensure efficient job rotation. Good job rotation prevents the risk of strain injuries and makes the workday less repetitive. In order to get younger people into the industry, appren- ticeships are offered in a number of fields, including IT, electric power, and mining. In 2022, the company had a total of 14 apprentices and seven employees received professional certificates. The company only uses clean- ing operators with professional certificates to have the best competence and improve the reputation of this pro- fession. The company also provides opportunities and encourages further education such as professional cer- tificates and undergraduate and graduate studies. The tasks in the company are largely characterised by specialist work. In some cases it can therefore be chal- lenging for employees to perform tasks which are dif- ferent from the ones they usually do, but the company always tries to find solutions for employees who want different work tasks. The aim is to find solutions and facilitate a flexible work life within the company's scope of possibilities. HIGHLIGHTS OF 2022 A top priority for Rana Gruber is to enhance the exper- tise of the companys employees. One measure for com- petence development is regular training of employees. Further, apprenticeships are offered in a number of fields to get younger people into the mining industry. ■ Number of apprentices: 14 ■ Number of employees who have received professional certificates: 7 ■ Number of employees who do further education: 22 ■ Employee support conversations conducted with 97 per cent of employees. THE WAY FORWARD Rana Grubers ambition is to contribute to increased competence internally in the organisation and for the external environment, including the company’s partners. The company is dependent on competent employees who want to contribute to the development of the min- ing industry. The company particularly wants to target girls, as the proportion of women in the industry and the company is lower than desirable. Going forward, Rana Gruber will continue to focus on training and further development of the company's employees. Measures such as continuous training on health and safety and dif- ferent work tasks will be a focus area. Further, as new technology and machines are introduced in the mine, there will be focus on training to make sure all employ- ees can operate the machines in a safe way. RANA GRUBER ANNUAL REPORT 202278 ESG REPORT Human rights RANA GRUBER’S IMPACT According to the UN, 3 billion people work under condi- tions that do not ensure their economic and social wel- fare. Around 40 million people are victims of modern slavery and more than 150 million children conduct child labour. The challenges in the global value and supply chains are huge. The UN sustainable development goals aim to reduce inequality and eradicate poverty. The role of business is crucial to achieve these goals. The Organisation for Economic Cooperation and Develop- ment (OECD) has guidelines for multinational companies in areas such as human rights, labour rights, the envi- ronment, anti-corruption, and transparency. A key ele- ment in the OECD's guidelines companies is making due diligence assessments to avoid harm to people, society, and the environment. The guidelines are central to the Act relating to enter- prises' transparency and work on fundamental human rights and decent working conditions (Transparency Act) which was introduced in Norway in 2022. The Act means that businesses must contribute to promoting human rights and decent working conditions in their own oper- ations, supply chains, and with business partners. The Act also entails an obligation to provide a statement on the work with due diligence assessments and to provide information about the company’s work to anyone who wants this. In 2022, Rana Gruber carried out a due diligence assess- ment of the company’s work to promote and safeguard human rights and decent working conditions in the com- pany’s own business and supply chains. The assess- ment was made on the basis of the OECD's guidelines for responsible business, where the implementation of due diligence assessments is central. The purpose was to identify shortcomings and potential for improvement in order to be able to promote human rights and decent working conditions in the operations, supply chains, and with business partners. The company considers the risk of human rights viola- tions to be low in its own operations. The national legal requirements are strict, and the company has good pol- icies and routines in place to look after the wellbeing of the employees. But the safeguarding of human rights and decent working conditions in the company’s supply chains is more challenging. This is due to several factors. First and foremost, it is challenging to gain insight into all con- tributors in the supply chain, especially subcontractors. The possibility of positive impact is also limited. The due diligence assessment shows several conditions that may prevent Rana Gruber from safeguarding human rights and decent working conditions, mainly in the sup- ply chain. The main challenges are the following: ■ Lack of internal resources to examine suppliers ■ Lack of knowledge about the degree of freedom of expression in the supply chain ■ Lack of equal information about all suppliers ■ Lack of internal routines for due diligence assessments ■ Lack of requirements and follow-up related to procurement ■ Lack of routines related to supplier dialogue and documentation ■ Different rules in different countries RANA GRUBER’S APPROACH Rana Gruber is committed to comply with the UN’s uni- versal declaration on human rights and the International Labour Organisation convention, OECDs Guidelines for Multinational Enterprise, as well as the Ethical Trad- ing Initiative Act, which regulates and defines rights and duties of companies and employees. The OECD Guide- lines set standards for responsible business conduct across a range of issues such as human right, labour right, and the environment. The company values responsible business and works actively to safeguard and promote human rights and decent working conditions. Based on the due diligence assessment, the company has implemented a number of measures to strengthen its work with safeguarding human rights and decent working conditions. The work started in 2022 and will continue in 2023, and includes the following: ■ Establish a Code of Conduct and communicate this to employees, suppliers, and partners ■ Ensure better insight into suppliers through supplier surveys, and implementation of screening and due diligence assessments in procurement processes ■ Establish routines for procurement and carry out due diligence assessments ■ Ensure better control of subcontractors by setting requirements for audits and supplier evaluations of the subcontractors’ suppliers ■ Clarify the internal organisation of the work with due diligence assessments and ensure that resources have been set aside for the implementation of the work and supplier dialogue RANA GRUBER ANNUAL REPORT 2022 79ESG REPORT RANA GRUBERS AMBITION ■ Ensure better insight into the supply chain and establish routines to carry out due diligence assessments and supplier dialogue supporting human rights and decent working conditions. Rana Gruber shall safeguard human rights and decent working conditions in all of the company’s activities. Companies must take responsibility by providing new solutions and be proactive in the transition to a more sustainable society. This also involves a responsibility to safeguard basic human rights and decent working con- ditions. SUPPLIER CODE OF CONDUCT During the first half of 2023, Rana Gruber will establish a Supplier Code of Conduct based on existing guidelines and principles for the company’s business, as well as the work related to the Transparency Act. RISK ASSESSMENTS The due diligence assessment carried out in 2022 shows that the company needs to strengthen its work with risk assessments related to human rights and decent working conditions. This applies particularly to risk assessments linked to the procurement of goods and services from suppliers and their sub-suppliers. Circumstances that may be appropriate to include in such a risk assessment include child labour, forced labour, the right to freedom of association, discrimina- tion, and health and safety. As part of the company's further work with due diligence assessments, such a risk assessment will be prepared. This will act as a starting point for closer supplier dia- logue and follow-up. SUPPLIER ASSESSMENTS Rana Gruber emphasises good dialogue with its suppli- ers, and will examine human rights and decent working conditions in the supply chains more closely going for- ward. The company sees a particularly increased risk when using suppliers outside the EU, and believes that examination of these suppliers is the most important contribution to avoiding violations of human rights and decent working conditions. As of 2022, the company has been in the process of establishing a system to assess social matters at all sup- pliers and business partners providing the company with goods and services. This includes human rights, decent working conditions, discrimination, diversity and inclu- sion, anti-corruption, as well as climate and environmen- tal factors. The assessment will be conducted by means of a supplier self-assessment survey. As the system was under development in 2022, no sup- pliers were assessed in the reporting year. As a conse- quence, the company was unable to disclose negative social impacts in the supply chain in 2022. From the first quarter of 2023, assessments regarding social matters will be conducted for all suppliers. That said, Rana Gruber has no reason to believe that there has been a violation of human rights and decent working conditions in the supply chain. If there had been cases of this, the company would have initiated remedi- ation in collaboration with suppliers and business part- ners. For more information about the company's work to pro- mote human rights and decent working conditions, see the explanation on the company's website. In line with the requirements of the Transparency Act, the compa- ny’s report will be publicly available by 30 June 2023. RANA GRUBER ANNUAL REPORT 202280 ESG REPORT HIGHLIGHTS OF 2022 Rana Gruber values responsible business and works actively to safeguard and promote human rights and decent working condition. The company works in line with the Transparency Act, which came into force in 2022. In this regard, the company has taken a number of measures to strengthen its work to safeguard of human rights and decent working conditions in its own opera- tions and supply chains: ■ Conducted due diligence assessment of the company's work to safeguard human rights and decent working conditions in line with OECD guidelines ■ Complied with the Transparency Act ■ Developed a code of conduct ■ Implemented measures to improve internal routines for carrying out due diligence assessments and examinations of human rights and decent working conditions ■ Started work on a system for supplier examination THE WAY FORWARD Rana Gruber shall safeguard human rights and decent working conditions in all parts of its business. The com- pany emphasises good dialogue with its suppliers, and will examine human rights and decent working condi- tions in the supply chains more closely going forward In 2023, Rana Gruber will establish a system for closer supplier examination. The company will conduct supplier surveys and establish a closer dialogue with the suppli- ers in the value chain. Rana Gruber will establish a Sup- plier Code of Conduct. Furthermore, the company will continue working with due diligence assessments with the ambition of increasing risk understanding, improve the dialogue with suppliers, and initiate risk mitigation measures. RANA GRUBER ANNUAL REPORT 2022 81ESG REPORT Technical supervisors monitor the production process thoroughly. GOVERNANCE The company’s governance is based on the UN's sustainable development goals and two of the company’s material topics related to corporate governance; safety and local value creation. Safety RANA GRUBER’S IMPACT Mining requires high standards for safety and coop- eration in the face of challenges related to the opera- tions, employees, and the local community. Rana Gruber always puts health and safety first, and the company strives to have a constructive dialogue with relevant stakeholders. The company is a well-organised busi- ness characterised by instructive collaboration between the management and trade unions. This collaboration also extends to the local community, the authorities, and other relevant organisations. RANA GRUBER’S APPROACH The health and safety of employees, customers, and partners are always a top priority at Rana Gruber. The company has a dedicated policy which sets high health, safety and environment (HSE) standards for the work environment at all sites of the operations. The aim is to offer a workplace that is free of accidents, as the result of accurate and detailed training modules, systems, and procedures, including the use of top quality personal protective equipment. The company follows legal requirements, but in some areas, the company has developed stricter guidelines and procedures. For example, the company operates with a lower limit value for air quality in the mine than what is required by law. This is monitored with daily gas measurements. RANA GRUBER ANNUAL REPORT 202282 ESG REPORT Rana Gruber has tailored safety measures ensuring a healthy work environment. The company has substantial experience on operating safely, and consequently no employees have incurred serious injuries over the past ten years. The company has adopted measures in cooperation with the unions to safeguard operations and production, while simul- taneously avoiding excessive workloads on employees in the event of accumulation of absence related to sick- ness. The company policy includes health examination for employees, keeping track of lost working hours, and registering and reporting potential occupational hazards. RANA GRUBER’S AMBITION ■ Zero work-related injuries HEALTH, SAFETY, AND ENVIRONMENT (HSE) Rana Gruber has a system for managing health and safety in the workplace. This is available to all employ- ees, including temporary employees and contracted per- sonnel. The system follows the requirements for risk assessment and deviation management, ISO 31000:2018. All employees must familiarise themselves with guide- lines and systems for safeguarding health and safety in the workplace. The company provides mandatory train- ing in the system, guidelines, and procedures related to HSE, and a lot of time is devoted to train new hires and informing employees about changes to systems and rou- tines. Special training is also provided for certain func- tions and tasks, and there are separate training plans and routines for handling machines and equipment. Employees are also trained in registering deviations and giving suggestions for improvements for safety in the workplace. Training routines for safety is also offered to contracted personnel and visitors. The company also follows rules for conducting incident drills. Employees who are responsible for safety are required to have four annual drills, but for other employees, the amount is not specified. Rana Gruber has 26 safety representatives who are responsible for safety in various parts of the business. Safety representatives complete courses required by law and have a particular responsibility for safeguard- ing the interests of employees in matters relating to the work environment. In 2022, the company facilitated a monthly meeting point for all safety representatives where they can discuss relevant matters. In 2022, Rana Gruber has also hired a chief safety officer, who only works with employee safety. For more information on how Rana Gruber takes care of the employees’ health, please see pages 71-73. RISK ASSESSMENTS The company has good routines and systems for risk assessments relating to workplace safety. The company includes a wide range of affected parties when carrying out risk assessments, including the chief safety officer, operators, and technical supervisors. These assess- ments are carried out regularly, with somewhat different frequency in different sites of the business. All employ- ees can report deviations and give input and sugges- tions for improvement regarding safety in the workplace through dialogue with their manager and safety repre- sentative. Furthermore, the company is in the process of updating a risk assessment regarding safety for all work tasks. This work will continue in 2023. DEVIATION MANAGEMENT The company has good routines for registering and han- dling safety deviations. The deviation system is available to all employees on PC and mobile phones. In the case of registered deviations, the company follows given rou- tines and procedures. In the event of major incidents, an internal investigation involving the participation of sev- eral employees is carried out according to given proce- dures. The company encourages everyone who reports deviations to say their name, as this makes it easier to deal with the deviation quickly and efficiently. The com- pany also encourages having a low threshold for report- ing deviations. Employees can also report deviations via their manager. In collaboration with union officials, the management has also ensured that Rana Gruber has a whistleblowing system for the reporting of irregularities in place. Please see page 73 for more information. Despite meticulous work with safety, seven injuries were registrated in 2022. Two of them resulted in a short-term of absence. The first incident occurred in connection with wagon emptying and was investigated in accordance with procedures. The injured person has contributed to clarifications and was back at work after short-term absence. The second incident was a broken arm when dis- embarking from a loader. This incident has not been investigated, as the accident was the result of non-blameworthy conditions. Here too, the injured per- son contributed with clarifications. These two accidents resulted in a total of 16 days of absence for 2022. The company takes any injury seriously and constantly seeks to avoid such incidents. HIGHLIGHTS OF 2022 The health and safety of employees, customers, and partners are always a top priority at Rana Gruber. The company has a dedicated policy which sets high health, RANA GRUBER ANNUAL REPORT 2022 83ESG REPORT safety and environment standards and aims to offer a workplace that is free of accidents. Measures in place is detailed training modules, systems, and procedures, including the use of top quality personal protective equipment. ■ Chief safety officer hired ■ Total accidents: 7 ■ Accidents leading to absence from work: 2 - 16 days in total ■ Accidents without subsequent absence from work: 5 ■ In process of updating a risk assessment regarding safety for all work tasks. This will continue in 2023. THE WAY FORWARD The safety of employees is Rana Gruber’s highest prior- ity, and the company ambition is zero injuries. The com- pany is in the process of updating a risk assessment regarding safety for all work tasks. This work will con- tinue in 2023 and relevant measures will be set in action if needed. Further, continuous training of employees in HSE is an important measure to provide a safe work- place. Local value creation RANA GRUBER’S IMPACT Mining is a fundamental part of the Rana communi- ty’s identity and history, and Rana Gruber is one of the region’s largest and most important employers. It is therefore clear that the company carries several obli- gations, one of which is taking on a corporate social responsibility, which extends beyond being a large work- place. RANA GRUBER’S APPROACH Rana Gruber wants to be a contributor to the local com- munity by building local expertise, and contribute to initiatives and projects, and be a good partner in the industry cluster. The company has a good collabora- tion with unions, neighbours, and local industry. The company is keen to be a good neighbour in the local community and strives for close dialogue with nearby neighbours, especially with regard to conditions such as noise and dust. Furthermore, the company strives to be a good partner for other industrial companies and the Rana municipality and local community. The company funds sports clubs, charities, and music related activi- ties, and thereby enables recipients to gain opportunities which would otherwise have been unattainable. RANA GRUBER’S AMBITION ■ Be a stable and significant contributor to local value creation A RESPONSIBLE CONTRIBUTOR IN THE LOCAL COMMUNITY Rana Gruber shall be a positive contributor to the local community, and shall have the least possible negative impact on neighbours and surrounding areas. The com- pany responds to all inquiries from neighbours and local communities, and has a good dialogue with residents in the area close to the mine and the processing plant. The company meets with residents at least once a year. In cases that lead to particular noise, dust or traffic, the company notifies residents in nearby areas and imple- ments measures if possible. For example, when neigh- bours complained about reversing alarms on vehicles making noise, the company chose to close off the areas from which the reversing alarms disturbed the most. SUPPORT FOR LOCAL ORGANISATIONS AND FACILITIES The following organisations and facilities received sup- port from Rana Gruber in 2022: ■ Local airport – see below ■ BUA ■ Mo i Rana hospital ■ The volunteering centre ■ Science centre Nordland ■ The Salvation Army ■ Bodø/Glimt football club ■ Rana football club ■ Dunderlandsdalen shooting team ■ Smeltedigelen music festival ■ Storforshei sports club ■ Skonseng sports club ■ Rana handball club ■ Rana athletics club ■ Rana slalom club ■ Storforshei leisure club ■ Fageråsbakkene ■ Arctic Circle skiing club ■ Arctic Circle casting and fly fishing association ■ Rana Kormakeri RANA GRUBER ANNUAL REPORT 202284 ESG REPORT ■ Mo horn music ■ Bergringen ■ Football pitch at Storforshei ■ "Vi vil leve", a film about prevention of suicide ■ Blå Vegen ■ Arctic Race of Norway ■ Båsmokoret ■ First Lego League ■ Turnhall Gruben ■ Stålhallen ■ Bellona Individuals who have received sponsorships: ■ Håkon Skog Erlandsen ■ Emilie Ågheim Kalkenberg (national team athlete) ■ Robin Pedersen ■ Benedicte Stien Schreiner ■ Marthe Kråkstad Johansen (recruit national team athlete) ■ Kristian Skjømming (recruit national team athlete) ■ Oda Leiråmo ■ Birk Fjellheim ■ Emil Bergli ■ Kasper Ågheim Rana Gruber is also a sponsor and co-owner of Arctic Circle Raceway, which is a motorsport facility located on a former mining area. In the beginning, Rana Gruber sponsored the construction, and thereafter the company joined a group of investors to buy the facility. This is an example of how Rana Gruber contributes to activities in the local community. FUNDING OF THE NEW AIRPORT IN MO I RANA The company has participated in the funding of the new Polarsirkelen Airport in Mo i Rana with NOK 15 million. The contribution was given in the first quarter of 2022 and the airport will improve the region’s accessibility, and enhance recruitment and the business activity of the RANA GRUBER ANNUAL REPORT 2022 85ESG REPORT company. Rana Gruber is already shareholder in the air- port’s holding company. LOW-PROFILE AND HIGH-PROFILE COMMITMENTS Some of Rana Gruber’s sponsorships are high-profile, such as its commitment to Bodø/Glimt football club. The three-year sponsorship of NOK 3 million is directed at talent development by the Glimt Academy. The purpose is, among other things, the recruitment of football play- ers from the Helgeland region – where Rana Gruber is situated – so that talents can play for a high-quality club in their own region. PARTNER FOR RANA FOOTBALL CLUB Rana Gruber is a partner for the local football club, Rana FK. The funds from the company will be used for: ■ Sports for children and adolescents ■ Social equalisation (funding of those with less funds to pay for fees) ■ Equality ANTI-CORRUPTION Rana Gruber has a specific anti-corruption policy. In addition, the company has developed a set of guidelines that comply with Norwegian legislation and statutory regulations. These guidelines apply to Rana Gruber and all its employees. The policy provides an overview of rules and procedures for preventing corruption and explains how employees should behave in order to avoid it. All of Rana Gruber managers are required to ensure that these pro- cedures are well known in the organisation. Rana Gruber has had an anti-corruption policy in place for several years. This policy applies for all Rana Gruber and their employees. Line managers are responsible for making the policies known in their organisation and promoting a culture of awareness and compliance and for monitoring compli- ance. There were no confirmed indidents of corruption and actions taken in 2022. Likewise, there were no legal actions for anti-competetive behaviour, anti-trust or monopoly practices. RANA GRUBER ANNUAL REPORT 202286 ESG REPORT RANA GRUBER ANNUAL REPORT 2022 87ESG REPORT Rana Gruber supports children and adolescents’ leisure activities, including the science and technology competition FIRST LEGO league. APPENDIX 1 Carbon accounts KEY FIGURES GHG EMISSIONS SCOPE 1 Description Unit 2020 2021 2022 Transportation Diesel Ørtfjell tank 1 and 2 tCO 2 e - - - Diesel Ørtfjellmoen tCO 2 e 1 549.8 1 238.8 1 932.9 Diesel LNS tank Ørtfjell tCO 2 e 9 299.2 9 493.3 8 693.6 Diesel Gullsmedvik tCO 2 e 755.4 715 763.9 Diesel Rail transport tCO 2 e 1 813.9 2 018.3 2 144.5 Diesel (NO) Passenger cars tCO 2 e 161.1 36.1 43.2 Diesel (NO) Selfors tCO 2 e 17.1 3.6 5.3 Diesel (NO) Lease plan tCO 2 e - 130.6 144.3 Petrol Passenger cars tCO 2 e 0.5 0.2 0.2 Petrol Lease plan tCO 2 e - - 0.2 Total tCO 2 e 13 597.1 13 635.7 13 728.2 Stationary combustion Propane (NO) tCO 2 e 72.8 677 29.5 Heavy fuel oil tCO 2 e 4.8 38.5 3.8 Petrol, stationary tCO 2 e 0.3 0.3 0.5 Biodiesel, HVO, stationary tCO 2 e - - 0.4 Diesel, stationary tCO 2 e - - 180.1 Total tCO 2 e 77.9 715.8 214.2 SCOPE 1 total tCO 2 e 13 675 14 351.5 13 942.4 SCOPE 2 Unit 2020 2021 2022 Electric vehicles Electric car Nordic tCO 2 e - - 0.3 Total tCO 2 e - - 0.3 Electric power location-based Electric power Norway tCO 2 e 883.6 991 691.2 Total tCO 2 e 883.6 991 691.2 SCOPE 2 total tCO 2 e 883.6 991 691.5 RANA GRUBER ANNUAL REPORT 202288 APPENDIX SCOPE 3 Unit 2020 2021 2022 Fuel- and energy-related activities Diesel (WTT) tCO 2 e 3125.6 3129 3195 Propane/butane (WTT) tCO 2 e 8.7 78.3 3.4 Diesel (B5) (WTT) tCO 2 e 49.7 50.5 56.8 Electric power Norway (upstream) tCO 2 e 186.5 356.7 197.5 Petrol (WTT) tCO 2 e 0.2 0.1 0.2 Diesel tCO 2 e - - Burning oil (WTT) tCO 2 e 0.8 6.4 0.6 Biodiesel, HVO (WTT) tCO 2 e - - 3.5 Total tCO 2 e 3 371.5 3 621 3 457.1 Waste Residual waste, incinerated tCO 2 e 330.5 220.6 75 Diesel tCO 2 e 23 18 - Asbestos, landfill tCO 2 e - - - Cardboard waste, recycled tCO 2 e - - 0.6 EE waste, recycled tCO 2 e - - 0.3 Glass waste, recycled tCO 2 e - - - Mixed industrial waste, recycled tCO 2 e - - 0.4 Metal waste, recycled tCO 2 e - - 10 Mineral wool waste, recycled tCO 2 e - - - Mixed waste, recycled tCO 2 e - - 0.2 Organic waste, incinerated tCO 2 e - - 0.2 Paper waste, recycled tCO 2 e - - - Plastic waste, incinerated tCO 2 e - - 11. 4 Plastic waste, recycled tCO 2 e - - 0.1 Rubber waste, incinerated tCO 2 e - - 61.5 Soils contaminated, landfill tCO 2 e - - 0.7 Textile, landfill tCO 2 e - - 0.7 Wood waste, incinerated tCO 2 e - - 2.2 Hazardous waste, incinerated tCO 2 e - - 297.4 Metal waste, landfill tCO 2 e - - 0.2 Total tCO 2 e 353.5 238.5 461 Purchased goods and services Hydraulic oil tCO 2 e - - 40.5 Engine oil tCO 2 e - - 3.3 Lubricating oil tCO 2 e - - 47 Explosives, Subtek Velcro, Orica (A1-5) tCO 2 e - - 1 298.8 Dynamite, Eurodyn 2000 (A1-5) tCO 2 e - - 4.1 Gear oil tCO 2 e - - 30.9 Total tCO 2 e - - 1 424.6 Business travel Air travel, continental, incl. RF tCO 2 e - - 1.1 Air travel, domestic, incl. RF tCO 2 e - - 5.1 tCO 2 e - - 6.2 Upstream transportation and distribution Transportation diesel tCO 2 e - - 12.5 Total tCO 2 e - - 12.5 SCOPE 3 total tCO 2 e 3 725 3 859.5 5 361.4 Total (SCOPE 1 + 2) tCO 2 e 14 558.6 15342.5 14 633.9 Total (SCOPE 1 + 2 + 3) tCO 2 e 18 283.6 19202 19 995.3 Percentage change 12.6% 5% 4.1% Annual market-based GHG emissions Electric power total (SCOPE 2) with market-based calculations tCO 2 e 38 876.5 39 837 39 992.9 SCOPE 2 total with market-based electric power calculations tCO 2 e 38 876.5 39 837 39 993.3 SCOPE 1+2+3 total with market-based electric power calculations tCO 2 e 56 276.5 58 048 59 297 Percentage change 35.1% 3.1% 2.2% RANA GRUBER ANNUAL REPORT 2022 89APPENDIX KEY FIGURES ENERGY SCOPE 1 Description Unit 2020 2021 2022 Transportation Diesel Ørtfjell tank 1 and 2 MWh - - - Diesel Ørtfjellmoen MWh 6 129.1 4890 7 634.8 Diesel LNS tank Ørtfjell MWh 36 776.1 37 474.8 34 338.8 Diesel Gullsmedvik MWh 2 987.6 2 822.3 3 017.2 Diesel Rail transport MWh 7 173.6 7 967.2 8 470.7 Diesel (NO) Passenger cars MWh 763.2 180.1 215.4 Diesel (NO) Selfors MWh 80.8 17.8 26.3 Diesel (NO) Lease plan MWh - 651.6 718.9 Petrol Passenger cars MWh 2.1 0.7 0.7 Petrol Lease plan MWh - - 1 Total MWh 53 912.5 54 004.6 54 423.8 Stationary combustion Propane (NO) MWh 312.5 2906.9 126.6 Heavy fuel oil MWh 18 143.5 14.3 Petrol, stationary MWh 1.4 1.4 1.9 Biodiesel, HVO, stationary MWh - - 99.3 Diesel, stationary MWh - - 711.5 Total MWh 331.9 3051.8 953.5 SCOPE 1 total MWh 54 244.4 57 056.4 55 377.3 SCOPE 2 Unit 2020 2021 2022 Electric power Electric power Norway MWh 98 173 99 097 98 748 MWh 98 173 99 097 98 748 Electric vehicles Electric car Nordic MWh - - 11.9 Total MWh - - 11.9 SCOPE 2 total MWh 98 173 99 097 98 759.9 Total (SCOPE 1 + 2 + 3) MWh 152 417.4 156 153.4 154 137.1 Total (SCOPE 1 + 2 + 3) GJ 548 702.7 562 152.1 554 893.7 Percentage change 7.2% 2.5% -1.3% SCOPE 1 renewable energy MWh - 208.1 334.6 SCOPE 1 renewable energy share % - 0.4% 0.6% SCOPE 2 renewable energy MWh - 93 844.9 94 708.4 SCOPE 2 renewable energy share % - 94.7% 95.9% Total renewable energy MWh - 94 053 95 043 Total renewable energy share % - 60.2% 61.7% KEY FIGURES ENERGY CONSUMPTION SCOPE 1 Description Unit 2020 2021 2022 Transportation Diesel Ørtfjell tank 1 and 2 litres - - - Diesel Ørtfjellmoen litres 576 582 457 864 716 214.4 Diesel LNS tank Ørtfjell litres 3 459 648 3 508 880 3 221 279 Diesel Gullsmedvik litres 281 052 264 260 283 037.1 Diesel Rail transport litres 674 846 745 996.9 794623.5 Diesel (NO) Passenger cars litres 73 247.8 17 302.9 20 727 Diesel (NO) Selfors litres 7 756 1 713 2 528.5 Diesel (NO) Lease plan litres - 62 589.2 69 187.4 Petrol Passenger cars litres 223.1 70.1 76.5 Petrol Lease plan litres - - 102.4 RANA GRUBER ANNUAL REPORT 202290 APPENDIX KEY FIGURES ENERGY CONSUMPTION (CONTINUED) Unit 2020 2021 2022 Stationary combustion Propane (NO) kg 24 242 225 516 9 818 Heavy fuel oil litres 1 516.1 12 118.9 1 203 Petrol, stationary litres 145 145 200 Biodiesel, HVO, stationary litres - - 10 000 Diesel, stationary litres - - 66 742.2 SCOPE 2 Unit 2020 2021 2022 Electric power Electric power Norway kWh 98 173 000 99 097 000 98 748 000 Electric vehicles Electric car Nordic pkm - - 62 489 SCOPE 3 Unit 2020 2021 2022 Fuel- and energy-related activities Diesel (WTT) litres 4 992 128 4 977 000.9 5 081 896 Propane/butane (WTT) kg 24 242 225 516 9 818 Diesel (B5) (WTT) litres 81 003.8 81 605.3 92 442.8 Electric power Norway (upstream) kWh 9 8173 000 99 097 000 9 8748 000 Petrol (WTT) litres 368.1 215.1 378.9 Diesel litres 8 541.2 - - Burning oil (WTT) litres 1 516.1 12 118.9 1 203 Biodiesel, HVO (WTT) litres - - 10 000 Waste Residual waste, incinerated kg 658 420 439 349 149 315 Diesel litres - 6 639.5 - Asbestos, landfill kg - - 1 Cardboard waste, recycled kg - - 27 905 EE waste, recycled kg - - 15 253 Glass waste, recycled kg - - 840 Mixed industrial waste, recycled kg - - 16 480 Metal waste, recycled kg - - 471 520 Mineral wool waste, recycled kg - - 180 Mixed waste, recycled kg - - 9 120 Organic waste, incinerated kg - - 9 770 Paper waste, recycled kg - - 2 175 Plastic waste, incinerated kg - - 4 800 Plastic waste, recycled kg - - 6 994 Rubber waste, incinerated kg - - 19 480 Soils contaminated, landfill kg - - 41 860 Textile, landfill kg - - 1 570 Wood waste, incinerated kg - - 103 836 Hazardous waste, incinerated kg - - 123 085 Metal waste, landfill kg - - 21 740 Purchased goods and services Hydraulic oil litres - - 28 030 Engine oil litres - - 2 285.8 Lubricating oil litres - - 32 505.2 Explosives, Subtek Velcro, Orica (A1-5) kg - - 940 482 Dynamite, Eurodyn 2000 (A1-5) kg - - 1 511.1 Gear oil litres - - 21 408.5 Business travel Air travel, continental, incl. RF pkm - - 6 846 Air travel, domestic, incl. RF pkm - - 20 920 Upstream transportation and distribution Transportation diesel litres - - 4 842.7 RANA GRUBER ANNUAL REPORT 2022 91APPENDIX To the Board of Directors of Rana Gruber ASA Independent Report on Rana Gruber ASA’s Greenhouse Gas (GHG) emissions reporting We have undertaken a limited assurance engagement of the accompanying GHG statement of Rana Gruber ASA, comprising the table Annual GHG emissions per scope for the period 1 January 2022 – 31 December 2022 and the section Carbon Accounting Principles and Reporting Methodology. The GHG statement is included as an appendix in the ESG report section of Rana Gruber ASA’s 2022 annual report. This engagement was conducted by a multidisciplinary team including assurance practitioners, engineers and environmental experts. Management’s Responsibility Management is responsible for Rana Gruber ASA’s preparation of the GHG statement and that the GHG emissions are measured and reported in ac cordance with the Greenhouse Gas Protocol - A Corporate Accounting and Reporting Standard (2004), applied and explained in the section Carbon Accounting Principles and Reporting Methodology (criteria). The GHG Protocol is available at https://ghgprotocol.org/corporate-standard. Management’s responsibility includes developing, implementing and maintaining internal controls that ensure appropriate measur ement and reporting of GHG emissions. As discussed in the section Carbon Accounting Principles and Reporting Methodology in the GHG statement, GHG quantification is subject to inherent uncertainty because of incomplete scientific knowledge used to determine emissions factors and the values needed to combine emissions of different gases. Our Independence and Quality Management We are independent of the co mpany in accordance with applicable laws and regulations and the Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled our ethical obligations in accordance with these requirements. We use ISQM 1 - Quality Management for Firms that Perform Audits or Reviews of Financial Statements, and Other Assurance and Related Services Engagements and maintain a comprehensive quality contr ol system including documented policies and procedures of the ethical standards, professional standards and applicable legal and regulatory claim. The Auditor’s Responsibilities Our responsibility is to express a limited assurance conclusion on Rana Gruber ASA’s GHG statement based on the procedures we have performed and the evidence we have obtained. We conducted our work and will issue our report in accordance with the International Standard on Assurance Engagements ISAE 3410 Assurance Engagements on Greenhouse Gas Statements. That standard requires that we plan and perform this engagement to obtain limited assurance about whether the GHG statement is free from material misstatement. A limited assurance engagement undertaken in accordance with ISAE 3410 involves assessing the suitability in the ci rcumstances of Rana Gruber ASA's use of GHG Protocol Corporate Accounting and Reporting Standard as the basis for the preparation of the GHG statement, assessing the risks of material misstatement of the GHG statement whether due to fraud or error, responding to the assessed risks as necessary in the circumstances, and evaluating the overall presentation of the GHG PricewaterhouseCoopers AS, Postboks 748 Sentrum, NO-0106 Oslo T: 02316, org. no.: 987 009 713 MVA, www.pwc.no Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap APPENDIX 2: RANA GRUBER ANNUAL REPORT 202292 APPENDIX statement. A limited assurance engagement is substantially less in scope than a reasonable assurance engagement in relation to both the risk assessment procedures, including an understanding of internal control, and the procedures performed in response to the assessed risks. The procedures we performed were based on our professional judgment and included inquiries, observation of processes performed, inspection of documents, analytical procedures, evaluating the appropriateness of quantification methods and reporting policies, and agreeing or reconciling with underlying records Given the circumstances of the engagement, in performing the procedures listed above, we: ● Through inquiries, obtained an understanding of Rana Gruber ASA's control environment and information systems relevant to emissions q uantification and reporting, but did not evaluate the design of particular control activities, obtain evidence about their implementation or test their operating effectiveness. ● Evaluated whether Rana Gruber ASA's methods for estimating emissions based on energy use and emission factors for the use of different energy sources are appropriate and have been consistently applied and reported. ● Performed pr ocedures to assess the completeness of the reported emissions sources, data collection methods, source data and relevant assumptions applicable to estimate emissions from a selection of Rana Gruber ASA’s emission sources. The test procedures were chosen taking into consideration the emission sources’ contribution to total emissions and our understanding of the risk of material errors in measurements a nd reporting of emissions. The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had we performed a reasonable assurance engagement. Accordingly, we do not express a reasonable assurance opinion about whether Rana Gruber ASA's GHG statement has been prepared, in all material respects, in accordance with the criteria. Limited Assurance Conclusion Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention that causes us to believe that Rana Gruber ASA’s GHG statement for the period 1 January 2022 – 31 December 2022, is not prepared, in all material respects, in accordance with the GHG Protocol Corporate Accounting and Reporting Standard (2004) applied as explained in the section Carbon Accounting Principles and Reporting Methodology in the GHG statement. Oslo, 16 February 2023 PricewaterhouseCoopers AS Gorm F. Nymark State Authorized Public Accountant (Norway) (This document has been signed electro nically) 2 / 2 RANA GRUBER ANNUAL REPORT 2022 93APPENDIX APPENDIX 3: Task Force on Climate-Related Financial Disclosures (TCFD) INTRODUCTION TO THE FRAMEWORK There is a growing demand for decision-useful and cli- mate-related information, and creditors and investors are increasingly demanding access to risk information that is consistent, comparable, and clear. The Task Force on Climate-Related Financial Disclosures (TCFD) developed the TCFD disclosure recommendations to augment market transparency and stability. Addition- ally, TCFD encourages use of the standardised reporting structure for financially material climate-related risks and opportunities to give investors, lenders, and insur- ers enhanced comparability when assessing and pricing pertinent companies. The TCFD recommendations are structured around four thematic areas that represent core elements of how organisations operate: governance, strategy, risk man- agement, and metrics and targets. Moreover, the framework contains three main catego- ries: risks related to the physical impacts of climate change, risk related to the transition to a lower-carbon economy, and climate-related opportunities. The TCFD has also incorporated financial impact as an integral part of the disclosure recommendations. In line with the TCFD disclosure recommendations, the TCFD framework is as of 2022 an integrated part of Rana Gruber’s annual financial reporting, and the report is reviewed annually by the audit committee and the board. COREELEMENTSOFRECOMMENDEDCLIMATERELATEDFINANCIALDISCLOSURES Metrics and targets Risk management Strategy Governance Governance The organisation’s governance around climate-related risks and opportunities. Strategy The actual and potential impacts of climate-related risks and opportunities on the organisation’s business, strategy, and financial planning. Risk management The processes used by the organisation to identify, assess, and managae climate-related risks. Metrics and targets The metrics and targets used to assess and manage relevant climate-related risks and opportunities. RANA GRUBER ANNUAL REPORT 202294 APPENDIX Governance Strategy Risk management Metrics & targets Disclose the organisation’s governance around climate- related risks and opportunities. Disclose the actual and potential impacts of climate- related risks and opportunities on the organisation’s business, strategy, and financial planning where such information is material. Disclose how the organisation identifies, assesses, and manages climate-related risks. Disclose the metrics and targets used to assess and manage relevant climate related risks and opportunities where such information is material Recommended disclosures Recommended disclosures Recommended disclosures Recommended disclosures a) Describe the board’s oversight of climate-related risks and opportunities. a) Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term. a) Describe the organisation’s processes for identifying and assessing climate related risks. a) Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process. b) Describe the management’s role in assessing and managing climate-related risks and opportunities. b) Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning. b) Describe the organisation’s processes for managing climate related risks. b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks. c) Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2ºC or lower scenario. c) Describe how processes for identifying, assessing, and managing climate related risks are integrated into the organisation’s overall risk management. c) Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets. 1. Governance Disclose the organisation’s governance around climate-related risks and opportunities. A) DESCRIBE THE BOARD’S OVERSIGHT OF CLIMATE-RELATED RISKS AND OPPORTUNITIES Oversight by the board of directors The board recognises the importance of understand- ing and managing the impact of potential climate-related risks and opportunities on Rana Gruber’s business and strategy. The board therefore supports the recommen- dations of the TCFD. The board of directors has the ultimate responsibility for the company management, including oversight of cli- mate-related strategic planning, and risk and opportu- nity management. The chair of the board has the overall responsibility for the management of climate-related issues. The board has a responsibility to ensure that the companys activities regarding climate issues are included in the company’s strategy, and that climate-re- lated targets are defined. The board will receive regu- lar updates from the management team. The board is responsible for ensuring that the company’s risk man- agement and internal control systems are adequate in relation to the regulations governing the business. The board reviews the company’s main risk areas and internal control systems annually, including the compa- ny’s values, code of conduct, and corporate responsibil- ity. The board reports on the climate impacts and risks that the company faces on an annual basis as part of the board of directors’ report. RANA GRUBER ANNUAL REPORT 2022 95APPENDIX B) DESCRIBE THE MANAGEMENT’S ROLE IN ASSESSING AND MANAGING CLIMATE-RELATED RISKS AND OPPORTUNITIES Oversight by the management The CEO has the highest operational level responsibility for climate-related issues, risks, and opportunities and is responsible for both assessing and managing climate-re- lated risks and opportunities. The environment and sus- tainability manager reports directly to the CEO. The process for managing climate-related opportunities often occurs in tandem with climate-related risk man- agement. The CEO is responsible for proposing, imple- menting, and following up climate-related opportunity initiatives. 2. Strategy Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning where such information is material. A) DESCRIBE THE CLIMATE-RELATED RISKS AND OPPORTUNITIES THE ORGANISATION HAS IDENTIFIED OVER THE SHORT, MEDIUM, AND LONG TERM B) DESCRIBE THE IMPACT OF CLIMATE-RELATED RISKS AND OPPORTUNITIES ON THE ORGANISATION’S BUSINESSES, STRATEGY, AND FINANCIAL PLANNING Identified climate-related risks and opportunities In line with the recommendations laid out by the TCFD, Rana Gruber has in 2022 conducted a process to assess how – and to what extent – the company is exposed to climate risk. The management team participated in a series of workshops to identify significant physical risk, transition risk, and opportunities caused by cli- mate change. In the series of workshops, the identified risks and opportunities were assessed in a strategic and financial context, in three different time horizons and in three different climate scenarios (more information about the scenario analyses is disclosed in section 2c). As climate-related risks and opportunities impact Rana Gruber’s strategic and financial planning differently in the short, medium, and long term, Rana Gruber consid- ered these three-time horizons in the workshops. The following definitions of time horizons are applied: Time horizon Year Short-term 2022-2025 Medium-term 2025-2035 Long-term 2035-2050 For Rana Gruber, it is important to identify the most sig- nificant climate-related risks and opportunities it faces, as it can help the company to make informed decisions about how to mitigate or take advantage of these factors. Rana Gruber supports the ambition to limit the long- term global temperature increase to well-below 2°C, in line with the Paris agreement. To help achieve this target, Rana Gruber must mitigate emissions and take advantage of the most important opportunities. To identify the most critical risk factors, the manage- ment team assessed how the factors could potentially impact the operations negatively and the probability of occurrence. To identify the opportunities with the highest potential, the management team assessed how the fac- tors could potentially impact the company positively and the degree of difficulty to take advantage of the opportu- nity. Most critical risks: ■ Uncertainty related to the EU Taxonomy and how this will impact Rana Gruber ■ Technical viability of decarbonisation strategy ■ Growing awareness of the use of coal in the mining industry, which may harm the overall reputation of the sector, including Rana Gruber RANA GRUBER ANNUAL REPORT 202296 APPENDIX Opportunity with highest potential: ■ Location close to the European market The following table summarises all the risks and oppor- tunities considered significant in Rana Gruber’s cli- mate-related risk assessment for 2022. It also provides and overview over potential strategic and financial impact, and what Rana Gruber is currently doing to miti- gate risks and to take advantage of opportunities. In the table at the end of this statement, the potential financial impact is assessed in more detail. ACUTE PHYSICAL RISK Acute physical risks, such as risks of storms, floods, and heavy precipitation of rain and snow are considered highly relevant for Rana Gruber. Such events may impact Rana Gruber’s direct operations, or cause disruptions in the supply chain. For Rana Gruber, any events delaying production have a financial impact. The company identified the following as the most significant acute physical risks: Identified risk Description of risk Potential non-financial impacts Potential financial impacts Most relevant climate scenario Time horizon Mitigation strategy Increased severity and frequency of heavy rains and floods Climate change can affect the intensity and frequency of precipita- tion. Warmer oceans increase the amount of water that evaporates into the air. When more mois- ture-laden air moves over land or con- verges into a storm system, it can produce more intense precipitation— for example, heavier rain and snowstorms. Increases in both extreme precipitation and total pre- cipitation have contributed to increases in severe flooding events in the Nordics. ■ Flooding ■ Rockfalls ■ Material damage to assets ■ Material damage to the transport route ■ Increased water intake in the mine ■ Operational disruptions Decrease in production capability will have a direct impact on revenue and increased costs associated with asset repair and additional labour. In addi- tion, there will be increased investment needs to miti- gate impacts, for exam- ple relating to equipment to pump water out of the mine. All scenarios, especially slow adaption scenario and climate chaos scenario in the climate chaos scenario and slow adaptation scenario. Short-term. The com- pany already observes annual cases of large amounts of rainfall. This risk may also impact the val- ue-chain over the medium to short term. ■ Mine infra- structure designed to meet the future risk of heavy rains and floods ■ Undertaken investments of NOK 20 million to pipe the river to ensure stable power supply and about NOK 3-4 million to secure the railway RANA GRUBER ANNUAL REPORT 2022 97APPENDIX Risk Description of risk Potential non-financial impacts Potential financial impacts Most relevant climate scenario Time horizon Mitigation strategy Increased frequency and intensity of strong wind, storms, and hurricanes Climate change and tempera- ture increases may lead to more energy and moisture in the climate system. As a result of this, the wind speed is expected to increase, and the air will con- tain more mois- ture. This will lead to more occurrences of strong winds, storms, and hurricanes in the future. ■ Sand and dust spread- ing caus- ing material damage to assets ■ Closing of the transport road (Salt- fjellet), which could lead to a lack of labour and halt in pro- duction ■ Reputa- tional dam- age related to dust in the neighbour- hood around the process- ing plant, and damage caused by assets mov- ing out of control. ■ Short-term stops in power sup- ply, halting production ■ Short-term stops in ship transpor- tation if the port becomes inaccessible to ships Decrease in production capability will have a direct impact on revenue and increased costs associated with asset repair and additional labour. In addi- tion, there will be increased investment needs to miti- gate impacts, for exam- ple relating to equipment to pump water out of the mine. All scenarios, especially slow adaption scenario and climate chaos scenario Short-term. The com- pany already observes annual cases of strong winds. This risk may also impact the value-chain over the medium to long term. ■ Mine infra- structure designed to meet the future risk of strong wind, storms, and hurricanes ■ Undertaken investments of NOK 20 million to pipe the river to ensure stable power supply, and about NOK 3-4 million to secure the railway RANA GRUBER ANNUAL REPORT 202298 APPENDIX CHRONIC PHYSICAL RISK Chronic physical risks refer to longer-term shifts in climate patterns, such as sustained higher temperatures that may cause the sea level rise or chronic heat waves. The company identified the following as the most significant chronic physical risks: Risk Description of risk Potential non-financial impacts Potential financial impacts Most relevant climate scenario Time horizon Mitigation strategy Changes in temperature patterns Climate change is expected to lead to increased tem- peratures and more mild weather in Nor- way. ■ Increased severity of extreme weather events such as cyclones and floods ■ Mild winters with more rain and risk of floods ■ Reduced rev- enues from lower pro- duction/ sales. ■ Increased capital costs (relating to e.g. damage to facilities) ■ Increased insurance premiums Climate chaos scenario and slow adaptation scenario. Medium- and long-term ■ Strategy to build resil- ience into the opera- tions to pro- tect assets and minimise operational downtime ■ Annual risk assess- ments that consider the future phys- ical impacts of climate change Rising sea levels Sea levels may rise due to expanding ocean volumes from tempera- ture increases and from melt- ing glaciers and ice sheets. It is estimated that changes in water den- sity and ocean currents will raise the sea level by 31 cm along the Nor- wegian coast, which is some- what more than the global aver- age. The com- pany sees this risk factor to be more significant for the value chain than Rana Gruber’s direct operations – especially in Rotterdam in the Nether- lands. ■ Floods ■ Relocation of the process- ing plant and port infra- structure ■ Reduced rev- enues from lower pro- duction/sales ■ Loss of cus- tomers if the sea level is increased in other regions (e.g., Rotter- dam) ■ Increased operating costs Climate chaos scenario Medium-term ■ Port infra- structure in Mo i Rana constructed to meet the risk of extreme weather events and rising sea levels ■ Investments in a few other measures as of 2022 RANA GRUBER ANNUAL REPORT 2022 99APPENDIX TRANSITION RISK – POLICY AND LEGAL Transitioning to a lower-carbon economy may involve extensive policy-related and legal changes to address mitigation of impacts and adaptation requirements related to climate change. The company identified the following as the most significant policy-related and legal transition risks: Risk Description of risk Potential non-financial impacts Potential financial impacts Most relevant climate scenario Time horizon Mitigation strategy Uncertainty related to the EU Taxonomy and how this will impact Rana Gruber As the hydro- power sector is among the sec- tors for which the EU Taxon- omy criteria are yet to be devel- oped, there is uncertainty associated with what share of Rana Gruber’s business activ- ities will be classified as ‘’green’’. ■ Rana Gruber is depend- ent on hydro- power in its current production method, so if hydropower is not viewed as “green”, this may lead to loss in competitive advantages ■ Key custom- ers may not see bene- fits of using hydropower in production compared to other sources of energy (e.g. coal) ■ Loss of cus- tomers/sales ■ If a signif- icant per- centage of activities (and thereby products) are deemed to not be Taxon- omy-aligned, this may affect the access to capital Low emission scenario and slow adaption scenario. Short-term ■ Close dia- logue with key cus- tomers and actively following changes in the EU ■ Getting all relevant reporting on track, in line with best-practice procedures Increased carbon pricing and taxes The carbon tax and the Greenhouse Gas Emission Trading Act are Norway’s most important cross-sectoral climate policy instruments for cost-effective cuts in green- house gas emis- sions. ■ Implementa- tion of addi- tional taxes related to the environment and climate (e.g. resource rent tax) ■ Decreased demand for Rana Gruber products ■ Increased operating costs Low emission scenario and slow adaption scenario. Short-term, especially until the com- pany’s tar- get to achieve zero carbon emissions is reached. Substitution of fossil-driven transport and machinery with sustainable alternatives. Stricter requirements for operations and certifications (i.e. ISO certifications) It is important for Rana Gruber to continue to meet the criteria for the ISO certifications. ■ Loss of mar- ket share ■ Reduced rev- enues from lower pro- duction/sales ■ Decreased profitability Low emission scenario. Medium- and long-term Cooperation with industry organisations, peers, governments, and communities to ensure an effective regulatory framework. RANA GRUBER ANNUAL REPORT 2022100 APPENDIX TRANSITION RISK - TECHNOLOGY Technological improvements or innovations that support the transition to a lower-carbon and energy-efficient economic system can have a sig- nificant impact on organisations. The company identified the following as the most significant technology-related transition risks: Risk Description of risk Potential non-financial impacts Potential financial impacts Most relevant climate scenario Time horizon Mitigation strategy Technological changes in customers’ steel production The global focus on reduc- ing GHG emis- sions may negatively impact the attractiveness of Rana Gru- ber’s products, as key custom- ers in the steel sector require new types of products and quality to meet their emission reduction tar- gets. ■ Changed customer preferences regarding the quality of Rana Gru- ber's prod- ucts ■ Changes in Rana Gru- ber's prod- uct mix with a focus on higher qual- ity (Fe65) ■ Increased energy demand ■ Failure to adapt to the changed demand for higher qual- ity products may involve lower sales and price achievement ■ Increased investments to restruc- ture the operations Low emission scenario and slow adaption scenario. It is expensive to change the production in the short term, but it can be beneficial in the longer term. The company believes the opportunity is greater than the costs/risk in the short term. ■ Close dia- logue with key custom- ers ■ Three stra- tegic priori- ties: the Fe65 project, the magnetite project, and the zero car- bon emis- sions project Technical viability of decarbonisation strategy Technical challenges and lack of technological solutions among Rana Gruber’s suppliers may impact the company’s ability to decarbonise and meet the zero carbon emissions target by the end of 2025. ■ Failure to meet target before the end of 2025 ■ Customers do not meet their emis- sions targets ■ Increased costs ■ Too high investment cost relative to expected return on capital ■ Weakened confidence in the cap- ital mar- ket because of failure to reach announced targets ■ Changed framework conditions for financing All scenarios, especially slow adaption scenario and climate chaos scenario. Short-term ■ Investments to decarbon- ise trucks, trains, and other heavy mechanical equipment ■ Close dia- logue with suppliers, including Sandvik Cost related to transition to lower emission technology Rana Gruber is dependent on suppliers and contractors. Increased costs may arise given that suppliers must make adjustments in their production/ delivery in order to reach their emissions targets. ■ Stop in pro- duction ■ Lower rev- enues as a result of downtime in production ■ Costs related to finding replace- ments/ other solutions ■ Increased investments to adapt pro- duction to alternative input factors Slow adaption scenario and climate chaos scenario. Medium- and long-term Focus on close dialogue with key customers. RANA GRUBER ANNUAL REPORT 2022 101APPENDIX TRANSITION RISK - MARKET While the ways in which markets could be affected by climate change are varied and complex, one of the major ways is through shifts in supply and demand for certain commodities, products, and services as climate-related risks and opportunities are increasingly taken into account. The company identified the following as the most significant market-related transition risk: Risk Description of risk Potential non-financial impacts Potential financial impacts Most relevant climate scenario Time horizon Mitigation strategy Changing customer behaviour and uncertainty in market signals The tran- sition to a zero-emissions society will place stricter demands on the compa- ny's custom- ers and their steel produc- tion. The com- pany expects a major con- version from coal to hydro- gen, which will require higher purity and qual- ity of the prod- uct. If this conver- sion does not take place, there is a risk that the com- pany develops products the market is not ready for, and thus will not pay a price that corresponds to the undertaken effort. ■ Reduced demand for Rana Gru- ber’s prod- ucts ■ Loss of mar- ket share and weakened competitive- ness ■ Increased production cost due to changing input prices and output requirements ■ Changes in revenue mix and sources, resulting in decreased revenues ■ Re-pricing of assets Slow adaption scenario and climate chaos scenario. Short-term Close dialogue with key customers to ensure the environmental performance of Rana Gruber’s products meets customer requirements. RANA GRUBER ANNUAL REPORT 2022102 APPENDIX TRANSITION RISK – REPUTATION There is a reputational risk related to changing customer or community perceptions of an organisation’s contribution to or detraction from the transition to a lower-carbon economy. Rana Gruber has defined the following risks as most significant: Risk Description of risk Potential non-financial impacts Potential financial impacts Most relevant climate scenario Time horizon Mitigation strategy Growing awareness of the use of coal in the mining industry, which may harm the overall reputation of the sector, including Rana Gruber Even though Rana Gruber does not use coal in its pro- duction, the use of coal in gen- eral in the sec- tor can involve a reputational risk for the entire sector, including Rana Gruber. Failure to attract talents Reduced rev- enue from decreased demand for goods/services Low emission scenario and slow adaption scenario Medium-term Close dialogue with key cus- tomers Stigmatisation of the sector and negative PR Rana Gruber depends on a good reputation among all its stakeholders, including in the local commu- nity, to attract and retain workers, and to have per- mission to dis- charge waste in the fjord. Changes in per- mits to operate as Rana Gruber does today ■ Reduced revenue from decreased demand for goods/ services, decreased production capacity, or negative impacts on workforce, management, and planning (e.g. lack of employee attraction and retention) ■ Reduced capital availability All scenarios Medium- and long-term Target to be carbon free before the end of 2025, includ- ing implemen- tation of an aggressive decarbonisation strategy RANA GRUBER ANNUAL REPORT 2022 103APPENDIX RESOURCE EFFICIENCY There is growing evidence that it is possible for organisations to reduce operating costs by improving efficiency across production and distribu- tion processes, buildings, machinery/appliances, and transport/mobility. Rana Gruber has identified the following opportunity as significant: Opportunity Description of opportunity Potential non-financial impacts of taking advantage of the opportunity Potential financial impacts Most relevant climate scenario Time horizon Positioning strategy Location close to the European market ■ Rana Gruber is located at a strategi- cally favour- able location. Proximity to the mar- ket is some- thing that can contribute to shorter transport routes and more efficient shipping in Europe. ■ The loca- tion is an advantage as the mar- ket wants to become more independ- ent of Asia, and to pro- duce more short-dis- tance prod- ucts. ■ However, Rana Gru- ber is a small player in a large global market and cannot sup- ply all iron ore demand in Europe. ■ Competi- tive advan- tage against Europe ■ Shorter transport distances ■ Increased demand/ sales and market shares ■ Increased price achievement ■ Lower costs in the long- term relative to competi- tors Low emission scenario Medium- and long-term Focus on oppor- tunity in com- munication with stakeholders. Rana Gruber has a close dia- logue with key customers and ensures that its attractive loca- tion in a climate perspective is addressed at all sales meetings. RANA GRUBER ANNUAL REPORT 2022104 APPENDIX ENERGY SOURCES There is a significant global trend toward decentralised clean energy sources, rapidly declining costs, and improved storage capabilities. Organisations that shift to low emission energy sources could potentially save energy costs. The company has identified the following opportunity: Opportunitiy Description of opportunity Potential non-financial impacts of taking advantage of the opportunity Potential financial impacts Most relevant climate scenario Time horizon Positioning strategy Use of low- emission sources of energy in operations The world is switching to renewable energy and electrical operating solutions that reduce the emission of CO 2 ■ Competitive advantage relative to peers ■ Increased market share ■ Increased sales ■ Lower costs relative to peers Low emission scenario and slow adaption scenario Medium- to long-term Decarbonisation strategy and related investments RANA GRUBER ANNUAL REPORT 2022 105APPENDIX PRODUCTS AND SERVICES Organisations that innovate and develop new low-emission products and services may improve their competitive position and capitalise on shifting consumer and producer preferences. Rana Gruber has identified the following opportunities within products and services: Opportunities Description of opportunity Potential non-financial impacts of taking advantage of the opportunity Potential financial impacts Most relevant climate scenario Time horizon Positioning strategy Development and increased sale of high- quality products Demand for hematite products with a higher iron content is expected to increase in a low-emission economy. In addition, magnetite is an important component in batteries. ■ Competitive advantage ■ Increased market share ■ Increased sales ■ Increased price achievement ■ Lower costs in the long- term relative to peers Low emission scenario Medium- and long-term Upgrade to Fe65 New biproducts and sale to new markets Increased demand for new biproducts based on Rana Gruber’s current production and solutions could also give access to new and emerging markets. Increased addi- tional sales through for instance: ■ Concrete industry: sale of waste/ stone mass currently dumped ■ Health indus- try: sale of magnetite for vaccines and medicines ■ Cooling industry: sale of Colorana for cooling elements ■ Battery man- ufacturing ■ Increased revenues ■ Increased price achieve- ments ■ Lower costs in the long- term relative to peers Low emission scenario Long-term Increased production of magnetite RANA GRUBER ANNUAL REPORT 2022106 APPENDIX MARKETS Organisations that proactively seek opportunities in new markets or types of assets may be able to diversify their activities and better position themselves for the transition to a lower-carbon economy. In particular, there are opportunities for organisations to access new markets through collaborating with governments, development banks, small-scale local entrepreneurs, and community groups. Rama Gruber has identified the following opportunity: Opportunity Description of opportunity Potential non-financial impacts of taking advantage of the opportunity Potential financial impacts Most relevant climate scenario Time horizon Positioning strategy New climate neutral steel producers in Europe and the Nordics The world will become warmer with climate change, which involves more rainfall and extreme weather close to equator. Mines near equator might not be able to offer the same dry processes in the future, and this will affect the qual- ity of the prod- ucts from these mines. Rana Gruber’s loca- tion is therefore more robust relative to those near equator. ■ Competitive advantage and potential to increase market share ■ Shorter val- ue-chain which pro- vides all stakeholders with better transparency in all stages of production ■ Increased sales ■ Increased price achievement ■ Increased additional sales Low emission scenario and slow adaption scenario Medium-term Upgrade to Fe65 and strat- egy to reach carbon free production RANA GRUBER ANNUAL REPORT 2022 107APPENDIX RESILIENCE The concept of climate resilience involves organisations developing adaptive capacity to respond to climate change to better manage the associated risks and seize opportunities, including the ability to respond to transition risks and physical risks. Opportunities include improving efficiency, designing new production processes, and developing new products. Opportunities related to resilience may be especially relevant for organisations with long-lived fixed assets or extensive supply or distribution networks; those that depend critically on utility and infrastructure networks or natural resources in their value chain; and those that may require longer-term financing and investment. Opportunities Description of opportunity Potential non-financial impacts of taking advantage of the opportunity Potential financial impacts Most relevant climate scenario Time horizon Positioning strategy Rana Gruber to be carbon free by end of 2025 To face the climate crisis, the world must use its energy reserves more efficiently. For companies, this means reducing greenhouse gas emissions and thereby the adverse climate-related impacts of their operations on people and the planet. ■ Competitive advantage ■ Increased sales ■ Increased price achievement ■ Reduced operating costs ■ Increased investment activity Low emission scenario and slow adaption scenario Medium-term Substitution of fossil-driven machinery and transport with sustainable alternatives. Rana Gruber has the resources to operate for several decades With cli- mate change, the world will become warmer, which involves more rainfall and extreme weather close to equator. Mines near equator (e.g. in Brazil) might not be able to offer the same dry processes in the future, and this will affect the qual- ity of the prod- ucts from these mines. Rana Gruber’s loca- tion is therefore more robust in terms of quality and access to resources com- pared to mines near equator. ■ Increased reliability of supply chain and ability to operate under var- ious condi- tions ■ Increased sales ■ Increased price chieve- ment ■ Increased investment activity Climate chaos scenario Medium-term According to the ore esti- mate from November 2021, Rana Gruber’s total resources amount to ~444 mt and reserves amount to ~94mt. The company’s existing infra- structure is also sufficient for the long- term mine plan. RANA GRUBER ANNUAL REPORT 2022108 APPENDIX C) DESCRIBE THE RESILIENCE OF THE ORGANISATION’S STRATEGY, TAKING INTO CONSIDERATION DIFFERENT CLIMATE-RELATED SCENARIOS, INCLUDING A 2°C OR LOWER SCENARIO Scenario analysis In line with the recommendations laid out by the TCFD, Rana Gruber conducted a qualitative scenario analysis in 2022 of all identified risks and opportunities as part of the climate-risk assessment. The assessment was made on different global warming impact scenarios as pre- sented by the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC), as well as sector-specific sources such as the McKinsey-ar- ticle, “Climate risk and decarbonization: What every min- ing CEO needs to know” by Lindsay Delevingne, Will Glazener, Liesbet Grégoir, and Kimberly Henderson, pub- lished January 28, 2020. The following scenarios were applied in the assessment: “Low-emission society”, “Slow adaption society”, “Climate chaos Society”: SCENARIO Low-emission society In this scenario, we assume that all the goals of the Paris Agreement are met, and the global tem- perature increase is limited to 1.5 °C compared to preindustrial levels. The scenario presumes a rise in climate policy ambitions and the pace of climate regulation is high. The scenario also assumes that global CO 2 emissions decline fast and that technological solutions are developed to cut emissions rapidly. A high carbon price is introduced in most economies, and global power is mainly generated using renewables. Cus- tomers, suppliers, investors, and societies are increasingly becoming climate-conscious and demand more sustainable products and operations. Transitional risks and opportu- nities dominate the low-emission society scenario, and the physical risks are of less magnitude than expected in the early 2020s. Slow adaption society In the slow adaption society scenario, the global temperature increase is limited to 2 degrees. However, it takes time before the world's coun- tries deliver emission reductions in line with the Paris Agreement. But, because of stricter climate policy around year 2030, the global temperature increase stabilised at 2 °C compared to preindus- trial levels in 2050. The costs of phasing out fossil fuels is higher than in the low-emission society scenario, due to lack of financial incen- tives to transform. Gradually, ground-breaking technology is introduced that accelerates the low-carbon development. The scenario is dominated by increasing physical risks due to a lack of coordinated policy actions to limit climate change, but an increasing focus on transitional risks and opportunities around year 2030. Climate chaos society In a climate chaos society scenario, the global average temperature is projected to increase by 4°C or more by the end of this century, compared to preindustrial levels. This scenario is based on the assumption that there will be no significant efforts to reduce greenhouse gas emissions and that the global economy will continue to operate as it does today. Under the climate chaos society scenario, the impacts of climate change are expected to be severe and widespread. There could be significant disruption to global food produc- tion, leading to shortages and price increases. There could also be more frequent and intense heatwaves, droughts, and extreme weather events, such as floods and hurricanes, which could cause physical damage to infrastructure and disrupt economic activity. In addition, sea levels are likely to rise, leading to increased coastal flooding and erosion, and threatening low-lying areas and small islands. The impacts of the BAU 4°C scenario are expected to disproportionately affect vulnerable communities and ecosystems. In the scenario analysis, the short-, medium-, and long- term time horizons have been assessed for each identi- fied risk and opportunity factor. For the identified acute physical risks, it was most relevant to consider Rana Gruber’s short-term mitigation strategies. For the iden- tified chronic physical risks, Rana Gruber’s medium and long-term strategies were most relevant. For the iden- tified transition risks and opportunities, scenarios were analysed in both a short-, medium- and long-term time horizon. RANA GRUBER ANNUAL REPORT 2022 109APPENDIX 3. Risk management Disclose how the organization identifies, assesses, and manages climate-related risks A) DESCRIBE THE ORGANISATION’S PROCESSES FOR IDENTIFYING AND ASSESSING CLIMATE-RELATED RISKS B) DESCRIBE THE ORGANISATION’S PROCESSES FOR MANAGING CLIMATE-RELATED RISKS C) DESCRIBE HOW PROCESSES FOR IDENTIFYING, ASSESSING, AND MANAGING CLIMATE-RELATED RISKS ARE INTEGRATED INTO THE ORGANISATION’S OVERALL RISK MANAGEMENT The identification, assessment, and management of cli- mate-related risks and opportunities is an integral part of Rana Gruber’s multidisciplinary risk and opportunity management. Rana Gruber’s board of directors and man- agement will conduct regular reviews of the company's activities for identifying, assessing, and responding to cli- mate-related risks and opportunities. The risk manage- ment process will also be reviewed on an annual basis. 2022 was the first year of implementation of the cli- mate-risk management process recommended by TCFD, and a material risk and opportunity matrix system devel- oped by Tavler AS was used as a foundation for this pro- cess. The identification and assessment process were conducted through in-depth interviews and workshops with the management and other relevant employees rep- resenting different organisational levels and functions (internally), thus providing an accurate and balanced pic- ture of the risks and opportunities faced by Rana Gruber. In the matrix, the impact (large, relatively large, rela- tively easy, easy) and likelihood (high/low) of each risk and opportunity are determined. Based on each risk’s categorisation, Rana Gruber develops, reviews, and implements response plans to mitigate risks and maxim- ise opportunities. 4. Metrics and Targets Disclose the metrics and targets used to assess and manage relevant climate- related risks and opportunities where such information is material A) DISCLOSE THE METRICS USED BY THE ORGANISATION TO ASSESS CLIMATE-RELATED RISKS AND OPPORTUNITIES IN LINE WITH ITS STRATEGY AND RISK MANAGEMENT PROCESS B) DISCLOSE SCOPE 1, SCOPE 2 AND, IF APPROPRIATE, SCOPE 3 GREENHOUSE GAS (GHG) EMISSIONS AND THE RELATED RISKS C) DESCRIBE THE TARGETS USED BY THE ORGANISATION TO MANAGE CLIMATE-RELATED RISKS AND OPPORTUNITIES AND PERFORMANCE AGAINST TARGETS Rana Gruber’s ambition is to lead the way for the decar- bonisation of the global steel industry. To this end, the company has set ambitious goals and aims to become the world’s first iron-ore producer with zero CO 2 emis- sions by the end of 2025. The company seeks sustainable solutions in its daily activities and today, the company is one of the iron ore producers with the lowest CO 2 emis- sions across all geographies. Rana Gruber has a reporting system that includes a large number of metrics and targets to assess and manage relevant climate-related risks and opportunities in the operations. The company discloses sustainability data in accordance with the GRI Universal Standards. The follow- ing climate-related metrics are disclosed in the ESG-re- port of 2022: ■ GHG emissions, see page 88 ■ Energy consumption, see page 90 RANA GRUBER ANNUAL REPORT 2022110 APPENDIX POTENTIAL FINANCIAL IMPACT LOW MEDIUM HIGH Risk category Risk Identified risk Short time horizon Medium time horizon Long time horizon Physical Acute Extreme weather with heavy rain Floods Extreme wind and storms Chronic Changing temperatures Rising sea level Transition Policy and legal EU Taxonomy Increased carbon pricing and emission taxes Stricter requirements for ESG certifications (i.e. ISO) Technology Technological changes in customers’ steel production Technical viability of decarbonisation strategy Cost of transition to lower emission technology Market Changing customer behaviour Reputation Shifts in consumer preferences Stigmatisation of sector and negative PR Opportunity category Identified opportunity Short time horizon Medium time horizon Long time horizon Resource efficiency Location close to the European market Energy sources Use of renewable energy in operations Products and services Increased sales of high-quality products New bi-products Markets New climate neutral steel producers in Europe and the Nordics Resilience Rana Gruber to reach climate neutrality within 2025 Rana Gruber has the resources to operate for several decades RANA GRUBER ANNUAL REPORT 2022 111APPENDIX APPENDIX 4 Equality statement About the statement Part 1 of this statement describes a mapping of salary and involuntary part-time work. The figures for salary and explanatory comments apply to 2021, and the com- pany has not updated these for 2022 (except the numbers of male and female employees, which are updated). The mapping of involuntary work was done at a workshop on 16 November 2022, where two representatives from the company's HR department and the environment and sus- tainability manager were present, and between 14 and 18 January 2023. Part 2 of describes the company’s work to promote equality and diversity, and to prevent discrimination and harassment, in accordance with the Equality and Anti-Discrimination Act. As part of this work, the com- pany carried out a mapping in January 2022. The map- ping was done in accordance with the working method described in the Act and includes all areas of discrimina- tion and personnel described in the Act. The board and management of Rana Gruber are aware of and involved in the company’s work with equality and anti-discrimination, and a description of this can be found in the board of directors’ report. PART 1: SALARY DIFFERENCES AND PART-TIME WORK A total of 48 women and 238 men worked at Rana Gru- ber in 2022. The proportion of women per 31 December 2022 was 16.8 per cent. Women Men 48 286 * Corresponding to 233.24 man years, since some have part time contracts. The company has assessed salary differences between men and women in four different employee categories (operators, office/mercantile positions, technical super- visors, and managers) based on average annual salary, including fixed pay, overtime pay, and variable pay. The results for each employee category are displayed in the tables below, and explanatory comments are found below each table. Operators Women Men Employees 31 187 Average salary (NOK) 564 633 594 648 Payments in kind (NOK equivalent) 1 460 1 460 The operators category includes team leaders, core workers, specialised workers, and auxiliary workers from all departments of the operations. This category is covered by both general and compa- ny-specific collective agreements, which regulate how the salaries for this group are determined. Specifically, salaries and supplements are determined according to working conditions, seniority, and responsibilities, inde- pendent of other potential differences between individ- ual employees. This means that operators who work in the same place, have the same responsibilities, and the same level of seniority, have the same salary. The difference in average salary for women and men is largely based on the collective agreement’s provisions for seniority supplements, as there are relatively few women with more than ten years of employment in the company. The difference can also be traced to the fact that there are fewer female team leaders, whose responsibility implies salary compensation, and to the fact that there are fewer women working in the underground mine, which involves working conditions with an associated compensation. All employees received a bonus for 2022. Payments in kind consist of insurance schemes, which are the same for all employees in the company, regard- less of position. Office/mercantile positions Women Men Employees 5 10 Average salary (NOK) 696 796 637 475 Payments in kind (NOK equivalent) 1 460 1 460 The office/mercantile positions catergory includes office positions, mercantile positions, and positions within IT, warehousing, purchasing, marketing, HR, and finance. Some positions are covered by both general and com- pany-specific collective agreements, while others do not fall under any collective agreement. RANA GRUBER ANNUAL REPORT 2022112 APPENDIX In this group, there is a relatively large proportion of women with several years of employment in the company compared to men, which has effects on the average salary. Technical supervisors Women Men Employees 7 23 Average salary (NOK) 695 903 745 029 Payments in kind (NOK equivalent) 1 460 1 460 The technical supervisor category includes employees with engineering background or vocational school back- ground. Women and men with the same education, experience and responsibilities have similar salaries in this cate- gory. However, several men are seniors who have gone from management positions to technical supervisor posi- tions, while keeping the same salary, which explains the difference in average salary. Managers Women Men Employees 5 13 Average salary (NOK) 1 070 517 998 921 Payments in kind (NOK equivalent) 1 460 1 460 The managers category includes operations managers to top management positions, except the CEO. Most female managers belong to the higher manage- ment levels, while most male managers belong to lower management levels, which explains the difference in average salaries. Involuntarily part-time work Part-time positions have only been established on request from employees for seniority or health reasons. The company has never advertised part-time positions. Employees Temporary positions Parental leave Part time positions Involuntary part-time positions Women Men Women Men Women Men Women Men Women Men 48 238 4 8 90 106 0 9 0 0 * Corresponding to 233.24 man years, since some have part time contracts. Part time positions Department Employees Percentage of full time Research and development 1 0.12 Loading and transport ore 2 0.50 and 0.95 Technical maintenance processing plant 1 0.40 Colorana production 1 0.65 PART 2: WORK FOR EQUALITY AND ANTI-DISCRIMINATION The company’s principles and guidelines ■ Rana Gruber shall avoid discriminatory practices relating to gender, age, race, and religion, and the company does not tolerate physical, verbal, or sexual abuse or harassment in the workplace. ■ The company should select the best qualified and most suitable candidate for all positions. ■ The HR department should have the final say for recruitments. This is to ensure that considerations related to gender equality and diversity are taken into account in the recruitment process. Relevant union representatives shall look at the list of applicants and provide input. First-line managers (i.e. managers of shifts and departments) shall participate in interviews together with the relevant line manager and HR manager. The final decision shall be made by the HR manager, and the union representative shall be informed of the decision. ■ Considerations of equality and non-discrimination shall be taken into account in the personnel policy. ■ The management shall collaborate with union representatives to ensure that matters worthy of criticism are communicated through the whistleblowing system. ■ Rana Gruber shall conduct work environment assessments annually at various locations at the company’s sites, and a health examination shall be conducted every three years. The work environment RANA GRUBER ANNUAL REPORT 2022 113APPENDIX assessments should be based on the Norwegian Labour Inspection Authority's guidelines and standards. ■ All employees shall receive the company's handbook describing safety routines. Employees’ influence on work to ensure equality and non-discrimination At Rana Gruber, there is an active collaboration between the management of the company and representatives of the employees through the trade unions and the union representatives. There is also a close cooperation in the company's work environment committee. Almost 100 per cent of the company’s employees are members of a trade union and the company has a close collaboration with the trade unions. The company's management has regular meetings with union repre- sentatives, the work environment committee, and the company development committee to collaborate on work regulations for e.g. employment and dismissal, working hours, wages, and rules of order for the company. The company hired a full-time chief safety officer in March 2022. The employees also have a significant influence on the company's decisions through board directorship and through the annual general meeting as shareholders of the company. The collaboration described above may be one of the reasons why the company has not previously seen a need to systematise the work for equality and non-dis- crimination. The company’s working group On 11 January 2022, the company established a working group with representatives from the executive manage- ment and the employees. The working group did the fol- lowing: ■ Went through a checklist that the equality representative has created to map which goals and measures the company has in place relating to equality and anti-discrimination. ■ Discussed the physical conditions at the workplace to assess the degree of accessibility required by law. ■ Conducted a risk assessment according to the ISO 31000 standard to examine the risk of discrimination and inequality. The assessment included all areas of discrimination and personnel, as well as work against general harassment, sexual harassment, and gender- based violence. ■ Proposed measures based on the risk assessment and assessed the long-term effect of the measures. ■ Mapped salary and involuntary part-time work. The observations of the working group and subsequent measures ■ The vision, guidelines, and work with equality and diversity have been communicated to the team leaders. In 2023, the company will strive to communicate this widely throughout the organisation. ■ The company has established routines for handling personnel issues, whistleblowing channels, and cooperation with union representatives. The working group recommended that these measures be systematised and communicated clearly throughout the organisation. The recommendation was met by establishing a platform for information which included e.g. the minutes from the meetings of the work environment committee. In addition, the company established a channel on Sharepoint and simplified the structure of EK. The company is also looking at other opportunities and platforms to communicate to employees. ■ Mining and processing facilities are inherently limiting in terms of availability. The administration building in Gullsmedvik from 2012 is adapted to several mercantile functions and meets the requirements for universal design. ■ The company facilitates adjustments for minorities, for example serving food adapted to religious and health-related preferences. ■ It is challenging to secure flexible working hours since the company is largely based on shift work. This challenge can help prevent equality. But the company has made adaptations in several cases for families where both parents work in the company. The company has also made adaptations in the work conditions due to age, illness, stage of life, etc. ■ The jargon in the workplace can seem exclusionary. The company is a male-dominated business and the communication in the workplace can be perceived as rough. To prevent discrimination and inequality, the working group called for raised awareness about this and concrete plans which should be communicated throughout the organisation. The company therefore established internal groups on social media to discuss exclusion and unnecessary word usage. ■ The company should establish measures that address the corporate culture and behaviour of employees. These topics have been discussed with the executive management through various interviews and meetings relating to the work with lean mining. ■ The company has a requirement that all employees speak Norwegian. This requirement is due to HSE requirements, the internal control regulation, and the guidelines of the Norwegian Labour Inspection RANA GRUBER ANNUAL REPORT 2022114 APPENDIX Authority. Due to a challenging labour market, the company will try to identify positions that can be done regardless of language. ■ The work tasks in mining are characterised by requirements for good health and physique. This can contribute to discrimination. ■ There are no significant challenges related to equal pay. Most planners have more or less the same salary. Any differences are explained in part 1 of this equality statement. ■ Rana Gruber is located in a region that is not characterised by a great deal of ethnic diversity, and the company does not receive complaints from employees or others regarding lack of equality and diversity. Measures in 2022 In the beginning of 2022, the company identified meas- ures to meet the new requirements in the Equality and Anti-Discrimination Act. The status of these measures is as follows: ■ The company established of a working group consisting of the managers of the HR department and employee representatives which started work 11 January 2022 by conducting a review of the company's work to ensure equality and prevent discrimination. ■ Mapping of salary and involuntary part-time work was done in the period 14 January and 18 January 2023. ■ The company plans to use the mapping of salary and involuntary part-time work as a starting point to establish a strategy with associated measures to further promote equality and prevent discrimination within all the areas described in the Equality and Anti- Discrimination Act. The strategy shall be discussed with the company's work environment committee. ■ The company is taking measures to motivate employees to increase their competence and responsibility regardless of gender. Still, the company acknowledges that there is room for more work in this area. ■ The company plans to survey and initiate physical measures that can comply with requirements for universal design and other physical measures that can contribute to promoting equality and diversity. This concerns ergonomics for employees, procurement of more workstations that can be lowered and raised, lighter helmets, office chairs adapted to each individual, adjustments in vehicles, and presence of the chief safety officer when purchasing machines to test exposure to noise and vibrations. In addition, the company plans to systematise these measures and communicate the measures in a good way so that everyone is aware of the arrangements. ■ The company has worked systematically to establish a corporate culture for employees’ wellbeing in the workplace. Managers and team leaders have discussed various topics and how to set requirements for how to behave and how to treat each other in the workplace. This has also been done in view of the goal of a better gender balance in 2027. The company has implemented training of all managers to ensure that all employees are informed of this. ■ The company has announced the gender balance target in job adverts. Representatives from the HR department and employees from the mining department have visited upper secondary schools to engage pupils, and plan to visit secondary schools to communicate the target to girls. ■ The management team has been informed of Lean process and presentation. Through the work with lean mining, the company seeks to create a health- promoting work culture. All employees shall work according to the method and lean mining is communicated at meetings with employees and management meetings. ■ Salary and salary differences are continuously monitored, and the company has good control in this area. The company reviews this together with employee representatives every year. Through regular salary adjustments, salary differences in the company are routinely equalised. No deviations and changes have been found in 2022. The company has had several women who have taken up representational positions, become safety representatives, team leaders etc. More work has been done on raising awareness in processes related to promotion. The company got a female employee representative in the board of directors in autumn of 2022. ■ The company has implemented several adjustments of working conditions. The corporate health service provider has contributed in relation to ergonomics relating to the machines. Thanks to this, sick leave has decreased in the relevant employee group. ■ The company strives to help with relevant equipment (shoes, desks, etc.), to protect pregnant women (extending seat belts, etc.), and to make it easy to contact those responsible for health and safety to adjust working conditions when needed. ■ The HR department was strengthened and was given broader responsibility for competence and work capacity. One HR adviser works on a sick leave project in which the employer, the Norwegian Labour and Welfare Organisation, and employees' trade unions participate. The project involves a review of relevant policy and routines related to sick leave, and RANA GRUBER ANNUAL REPORT 2022 115APPENDIX how employers should communicate to employees the handling of sick leave to employees. The project has been discussed at meetings with employees, meetings between the management and trade unions, meetings with the work environment committee, and meetings in the management team. The board is also aware of the project. Ambitions for 2023: ■ By the end of June 2023, the company will create a separate strategy to meet the requirements in the Equality and Anti-Discrimination Act. The equality strategy will be based on a workshop with the executive management, department managers, union representatives, and the work environment committee. The ambition is to have 33 per cent female employees by 2027. The strategy with associated measures and guidelines shall be communicated broadly in the company, and the company shall establish a separate plan for training in equality and diversity work. The company shall also establish good routines for involving the board, the management, and the trade unions. ■ In line with the inclusive work life agreement which applies to all Norwegian companies, the company has a goal of giving unskilled people an opportunity to enter work life via Rana Gruber. The company collaborates with the Norwegian Labour and Welfare Organisation and the companies Driv Karriere and Friskgården, which train people to get ready for work life. The ambition is to take on a minimum of 4 people for work trials. RANA GRUBER ANNUAL REPORT 2022116 APPENDIX APPENDIX 5 Numbers and statistics CATEGORY Unit 2022 Comment ENVIRONMENT New suppliers screened using environmental criteria Per cent 0 In progress IUCN Red List species and national conservation list species with habitats in areas affected by operations Numbers 1 The company has a map of where these mushrooms are and they grow in the outskirts of the production area. Significant spills Water quantities is oper- ating water from the Rana river and water from the municipality Spills to Ranfjorden Water m 3 24 027 474 Waste mass and tailings Tonnes 2 946.804 Material use Kilograms 3811 Limited to materials used for packaging of Colorana products. Non-renewable material. Water withdrawal Water outtake is from the Rana River for use in production. This is all fresh water (≤1000 mg/L total dissolved solids). Surface water m 3 0 Groundwater m 3 0 Seawater m 3 0 Produced water m 3 0 Third-party water m 3 23 931 280 Water discharge Both water from the municipality and water from Rana river run into the Rana fjord. Surface water m 3 0 Groundwater m 3 0 Seawater m 3 0 Produced water m 3 0 Third-party water m 3 24 027 474 Water consumption Used for water in buildings (cloakrooms, toilets, drinking water, etc.), fire hoses, and water outlets (when operating water is disconnected), as well as emergency incidents. Third-party water from the municipality m 3 96 194 Waste generated Please see pages 68-69 for more information about waste handling. Total waste Tonnes 657 Complex iron Tonnes 401 Class iron Tonnes 70 Paper and coardboard Tonnes 30 Plastic Tonnes 7 Glass Tonnes 0.8 Electronic waste Tonnes 13 Mixed cabel Tonnes 2.5 Mineral wool Tonnes 0.1 Styrofoam/EPS Tonnes 0.01 Sorted waste Tonnes 9 Hazardous waste Tonnes 124 RANA GRUBER ANNUAL REPORT 2022 117APPENDIX WASTE DIVERTED FROM DISPOSAL Please see pages 68-69 for more information about waste handling. Total waste Material recovery Tonnes 536 Energy recovery Tonnes 393 Reuse Tonnes 24 Composting Tonnes 10 General waste Material recovery Tonnes 534 Energy recovery Tonnes 270 Reuse Tonnes 24 Composting Tonnes 10 Hazardous waste General waste Tonnes 2 Hazardous waste Tonnes 123 Waste directed to disposal Please see pages 65-69 for more information about waste handling. General waste Tonnes 65 Hazardous waste Tonnes 0 SOCIAL MATTERS Employees All employees Total Numbers 286 Women Numbers 48 Men Numbers 238 Executive management Total Numbers 4 Women Numbers 1 Men Numbers 3 Management Total Numbers 18 Women Numbers 5 Men Numbers 13 Office and mercantile positions Total Numbers 15 Women Numbers 5 Men Numbers 10 Technical supervisors Total Numbers 30 Women Numbers 7 Men Numbers 23 Operators Total Numbers 218 Women Numbers 31 Men Numbers 187 Workers who are not employees Temporary employees Total Numbers 12 Women Numbers 4 Men Numbers 8 Apprentices Total Numbers 14 Women Numbers 4 Men Numbers 10 RANA GRUBER ANNUAL REPORT 2022118 APPENDIX New employee hires Total Numbers 17 Women Numbers 4 Men Numbers 13 Age groups <30 Numbers 8 30-50 Numbers 8 >50 Numbers 1 Turnover Total Numbers 21 Women Numbers 2 Men Numbers 19 Age groups <30 Numbers 9 30-50 Numbers 6 >50 Numbers 6 Parental leave Employees that were entitled to parental leave Total Numbers 16 Women Numbers 6 Men Numbers 10 Employees that took parental leave Total Numbers 16 Women Numbers 6 Men Numbers 10 Employees that returned to work after parental leave ended Total Numbers 12 Women Numbers 5 Men Numbers 7 Employees that returned to work after parental leave ended that were still employed 12 months after their return to work Total Numbers 2 (100%) Women Numbers 2 Men Numbers 0 Return to work and retention rates of employees that took parental leave, by gender Total Per cent 100% Women Per cent 100% Men Per cent 100% DIVERSITY OF GOVERNANCE BODIES AND EMPLOYEES Board of directors (women) <30 Per cent - 30-50 Per cent - >50 Per cent 25% Board of directors (men) <30 Per cent - 30-50 Per cent 50% >50 Per cent 25% Executive management (women) <30 Per cent - 30-50 Per cent - >50 Per cent 25% Executive management (men) <30 Per cent - 30-50 Per cent 25% >50 Per cent 50% RANA GRUBER ANNUAL REPORT 2022 119APPENDIX Management (women) <30 Per cent - 30-50 Per cent 16% >50 Per cent 16% Management (men) <30 Per cent - 30-50 Per cent 42% >50 Per cent 26% Office and mercantile positions (women) <30 Per cent - 30-50 Per cent 13% >50 Per cent 20% Office and mercantile positions (men) <30 Per cent - 30-50 Per cent 47% >50 Per cent 20% Technical supervisors (women) <30 Per cent 10% 30-50 Per cent 10% >50 Per cent 3% Technical supervisors (women) <30 Per cent 3% 30-50 Per cent 45% >50 Per cent 29% Operators (women) <30 Per cent 4% 30-50 Per cent 4% >50 Per cent 5% Operators (men) <30 Per cent 14% 30-50 Per cent 41% >50 Per cent 32% RATIO OF BASIC SALARY AND REMUNERATION OF WOMEN AND MEN Per cent difference within employee category Executive management 40% In this category there are 3 managers with equal salary. The CEO has a higher salary than the managers. The bonus is equal for the executive management. There is not a difference in salary or bonuses between genders. Office and mercantile positions 30-40% There is a 30-40 per cent difference between highest and lowest salary within this group. There are not objectionable gender differences when it comes to salary. Any differences are related to seniority, age, and tasks. Technical supervisors 30-40% There is a 30-40 per cent difference between highest and lowest salary within this group. There are not objectionable gender differences when it comes to salary. Any differences are related to seniority, age, and tasks. RANA GRUBER ANNUAL REPORT 2022120 APPENDIX Average hours of training per year per employee Total Numbers 16 Women Numbers 16 Men Numbers 16 Percentage of employees received regular performance and career development reviews Total Per cent 95% Workers covered by an occupational health and safety management system Per cent 100% Sick leave Per cent 7.48% Work-related injuries Numbers 7 See page 82 for more information Work-related ill health Numbers 2 16 days in total New suppliers that were screened using social criteria Per cent 0 In progress Negative social impacts in the supply chain and actions taken Numbers and per cent - In progress Incidents of discrimination and corrective actions taken Numbers 0 Operations assessed for risks related to corruption Numbers and per cent 0 In progress Communication and training about anti-corruption policies and procedures All of the three business partners have received the anti-corruption policies and procures upon request. Governance body members Total Numbers 8% Percentage of all employees Per cent 100% Employees Total Numbers 286 Percentage of all employees Per cent 100% Business partners Total Numbers - Percentage of all employees Per cent - Confirmed incidents of corruption and actions taken Numbers 0 Legal actions for anti-competitive behavior, anti-trust, and monopoly practices Numbers 0 Operations with local community engagement, impact assessments, and development programs Per cent - In progress RANA GRUBER ANNUAL REPORT 2022 121APPENDIX APPENDIX 6 GRI Universal Standards Index DISCLOSURE LOCATION COMPLETENESS COMMENTS GENERAL DISCLOSURES GRI 2: General disclosures GRI 2-1 Organisational details p. 2 Complete GRI 2-2 Entities included in the organisation's sustainability reporting p. 48 Complete GRI 2-3 Reporting period, frequency, and contact point p. 48 Complete GRI 2-4 Restatements of information p. 48 Complete GRI 2-5 External assurance p.48 Complete GRI 2-6 Activities, value chain, and other p. 9 Complete GRI 2-7 Employees p.112 Complete GRI 2-8 Workers who are not employees p. 17 and p.112 Complete GRI 2-9 Governance structure and composition p.17 Complete GRI 2-10 Nomination and selection of the highest governance body p. 42-43 Complete GRI 2-11 Chair of the highest governance body p. 17 Complete GRI 2-12 Role of the highest governance body in overseeing the management of impacts p. 55 Complete GRI 2-13 Delegation of responsibility for managing impacts p. 55 Complete GRI 2-14 Role of the highest governance body in sustainability reporting p. 55 Complete GRI 2-15 Conflicts of interest Incomplete GRI 2-16 Communication of critical concerns p. 43 and 55 Incomplete No mention of total number and nature of critical concerns communicated GRI 2-17 Collective knowledge of the highest governance body Incomplete GRI 2-18 Evaluation of the performance of the highest governance body Incomplete GRI 2-19 Remuneration policies Incomplete Guidelines for remuneration to be approved at the ordinary general meeting in 2023 GRI 2-20 Process to determine remuneration p. 44 Incomplete More information in guidelines for remuneration to be approved at the general meeting in 2023 GRI 2-21 Annual total compensation ratio Incomplete GRI 2-22 Statement on sustainable development strategy p. 6 and p. 54 Complete GRI 2-23 Policy commitments p.79 Incomplete Limited to human rights GRI 2-24 Embedding policy commitments p. 79 Incomplete Limited to human rights GRI 2-25 Processes to remediate negative impacts Incomplete GRI 2-26 Mechanisms for seeking advice and raising concerns p.73 Complete GRI 2-27 Compliance with laws and regulations p. 39 Incomplete No mention of number and nature of instances of non- compliance GRI 2-28 Membership associations p. 51 Complete GRI 2-29 Approach to stakeholder engagement p. 51 Complete GRI 2-30 Collective bargaining agreements p. 72 Complete RANA GRUBER ANNUAL REPORT 2022122 APPENDIX DISCLOSURE LOCATION COMPLETENESS COMMENTS MATERIAL TOPICS GRI 3: Material topics GRI 3-1 Process to determine material topics p. 50 Complete GRI 3-1 List of material topics p. 52 Complete GRI 3-1 Management of material topics p. 62-66, 67-69, 71-73, 74-76, 77-78, 79-81, 82-84, 86 CLIMATE GRI 305: Emissions 305-1 Direct (Scope 1) GHG emissions p. 88-89 Complete 305-2 Energy indirect (Scope 2) GHG emissions p. 88-89 Complete 305-3 Other indirect (Scope 3) GHG emissions p. 88-89 Complete 305-4 GHG emissions intensity p.89-91 Complete 305-5 Reduction of GHG emissions p. 88-89 Complete 305-6 Emissions of ozone-depleting substances (ODS) N/A Not applicable 305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air emissions N/A Not applicable GRI 302: Energy 302-1 Energy consumption within the organisation p. 90-91 Complete 302-2 Energy consumption outside of the organisation Incomplete In progress 302-3 Energy intensity p. 90-91 Complete 302-4 Reduction of energy consumption p. 90-91 Complete 302-5 Reductions in energy requirements of products and services Incomplete In progress GRI 201: Economic performance 201-2 Financial implications and other risks and opportunities due to climate change p. 94 Complete TCDF disclosure NATURE GRI 304: Biodiversity 304-1 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas p.64-65 Complete 304-2 Significant impacts of activities, products, and services on biodiversity p.64-65 Complete 304-3 Habitats protected or restored p. 66 Complete 304-4 IUCN red list species and national conservation list species with habitats in areas affected by operations p. 117 Complete GRI 308: Supplier environmental assessment 308-1 New suppliers that were screened using environmental criteria p. 117 Incomplete In progress 308-2 Negative environmental impacts in the supply chain and actions taken Incomplete In progress RANA GRUBER ANNUAL REPORT 2022 123APPENDIX DISCLOSURE LOCATION COMPLETENESS COMMENTS GRI 306: Effluents and waste 306-3 Significant spills p. 65 and 117 Complete RESOURCE UTILISASTION GRI 301: Materials 301-1 Materials used by weight or volume p. 117 Incomplete Limited to materials used for packaging of Colorana 301-2 Recycled input materials used p. 117 Incomplete Limited to materials used for packaging of Colorana 301-3 Reclaimed products and their packaging materials N/A Not applicable GRI 303: Water and effluents 303-1 Interactions with water as a shared resource p. 69 Complete 303-2 Management of water discharge-related impacts p. 69 Complete 303 -3 Water withdrawal p. 117 Complete 303-4 Water discharge p.117 Complete 305-5 Water consumption p.117 Complete GRI 306: Waste 306-1 Waste generation and significant waste-related impacts p. 68-69 Complete 306-2 Management of significant waste-related impacts p. 68-69 Complete 306-3 Waste generated p. 117 Complete 306-4 Waste diverted from disposal p. 118 Complete 306-5 Waste directed to disposal p.118 Complete DECENT WORKING CONDITIONS GRI 401: Employment 401-1 New employee hires and employee turnover p. 118-119 Complete 401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees p. 72 Complete 401-3 Parental leave p.119 Complete EQUALITY GRI 405: Diversity and equal opportunity 405-1 Diversity of governance bodies and employees p.119-120 Complete 405-2 Ratio of basic salary and remuneration of women to men p. 120 Complete GRI 406: Non-discrimination 406-1 Incidents of discrimination and corrective actions taken p.121 Complete RANA GRUBER ANNUAL REPORT 2022124 APPENDIX DISCLOSURE LOCATION COMPLETENESS COMMENTS COMPETENCE AND DEVELOPMENT GRI 404: Training and education 404-1 Average hours of training per year per employee p. 121 Complete 404-2 Programs for upgrading employee skills and transition assistance programs p.78 Complete 404-3 Percentage of employees receiving regular performance and career development reviews p. 121 Complete HUMAN RIGHTS GRI 414: Supplier social assessment 414-1 New suppliers that were screened using social criteria p.121 Incomplete In progress 414-2 Negative social impacts in the supply chain and actions taken p.121 Incomplete In progress GRI 408: Child labour 408-1 Operations and suppliers at significant risk for incidents of child labour p.80 Incomplete In progress GRI 409: Forced or compulsory labour 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labour p.80 Incomplete In progress GRI 407: Freedom of association and collective bargaining 407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk p.80 Incomplete In progress GRI 403: OCCUPATIONAL HEALTH AND SAFETY 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships p.80 Incomplete In progress SAFETY GRI 403: Occupational health and safety 403-1 Occupational health and safety management system p.83 Complete 403-2 Hazard identification, risk assessment, and incident investigation p. 83 Complete 403-3 Occupational health services p. 72 Complete 403-4 Worker participation, consultation, and communication on occupational health and safety p. 83 Complete 403-5 Worker training on occupational health and safety p. 83 Complete 403-6 Promotion of worker health p.72 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships Incomplete In progress 403-8 Workers covered by an occupational health and safety management system p. 121 Complete 403-9 Work-related injuries p.121 Complete 403-10 Work-related ill health p.121 Complete RANA GRUBER ANNUAL REPORT 2022 125APPENDIX DISCLOSURE LOCATION COMPLETENESS COMMENTS LOCAL VALUE CREATION GRI 413: Local communities 413-1 Operations with local community engagement, impact assessments, and development programs p. 121 Incomplete In progress 413-2 Operations with significant actual and potential negative impacts on local communities p. 84.86 Incomplete In progress DISCLOSURES NOT RELATED TO MATERIAL TOPICS GRI 205: Anti-corruption GRI 205-1 Operations assessed for risks related to corruption p. 121 Incomplete In progress GRI 205-2 Communication and training about anti- corruption policies and procedures p. 121 Complete GRI 205-3 Confirmed incidents of corruption and actions taken p. 121 Complete GRI 206: Anti-competitive behaviour GRI 206-1 Legal actions for anti-competitive behavior, anti- trust, and monopoly practices p. 121 Complete RANA GRUBER ANNUAL REPORT 2022126 APPENDIX Financialstatements 2022 RANA GRUBER Statement of comprehensive income ..............................................................................................................128 Statement of financial position ......................................................................................................................... 129 Statement of cash flows ....................................................................................................................................130 Statement of changes in equity ........................................................................................................................ 131 Notes to the financial statements ..................................................................................................................... 132 Note 01 Corporate information ..........................................................................................................................................................132 Note 02 Basis of preparation .............................................................................................................................................................. 132 Note 03 Significant accounting principles .......................................................................................................................................133 Note 04 Segment information ............................................................................................................................................................. 137 Note 05 Revenue ................................................................................................................................................................................... 137 Note 06 Other operating expenses .................................................................................................................................................... 138 Note 07 Finance income and costs .................................................................................................................................................... 139 Note 08 Other financial gains and losses .......................................................................................................................................... 139 Note 09 Income tax ...............................................................................................................................................................................139 Note 10 Earnings per share (EPS) ......................................................................................................................................................141 Note 11 Mine properties .......................................................................................................................................................................141 Note 12 Property, plant, and equipment .......................................................................................................................................... 142 Note 13 Leases ...................................................................................................................................................................................... 143 Note 14 Other non-current financial assets .................................................................................................................................... 144 Note 15 Trade receivables...................................................................................................................................................................144 Note 16 Inventories ..............................................................................................................................................................................145 Note 17 Cash and cash equivalents ................................................................................................................................................... 145 Note 18 Reconciliation of cash-flows from financing activities ..................................................................................................... 145 Note 19 Financial assets and liabilities ............................................................................................................................................. 146 Note 20 Borrowings and credit facilities .......................................................................................................................................... 147 Note 21 Trade payables and other current liabilities .....................................................................................................................148 Note 22 Financial risk and capital management .............................................................................................................................148 Note 23 Derivatives ...............................................................................................................................................................................151 Note 24 Employee benefit obligations ............................................................................................................................................... 153 Note 25 Share capital ...........................................................................................................................................................................153 Note 26 Assets pledged as security .................................................................................................................................................. 155 Note 27 Related parties ....................................................................................................................................................................... 155 Note 28 Provisions................................................................................................................................................................................ 156 Note 29 Commitments ......................................................................................................................................................................... 157 Note 30 Critical judgements and estimates ..................................................................................................................................... 157 Note 31 Events after the reporting period ....................................................................................................................................... 159 Appendix: Alternative performance measures .................................................................................................................................... 159 Auditor’s report ................................................................................................................................................. 162 RANA GRUBER ANNUAL REPORT 2022 127FINANCIAL STATEMENTS STATEMENT OF COMPREHENSIVE INCOME For the period ended 31 December 2022 Amounts in NOK thousand Notes 2022 2021 Revenue 5 1 423 319 1 668 429 Changes in inventories 16 57 028 44 190 Raw materials and consumables used (398 305) (327 567) Employee benefit expenses 24 (288 089) (25 8 611) Depreciation 11, 12, 13 (158 736) (174 247) Other operating expenses 6 (226 763) (189 106) Operating profit/(loss) 408 454 763 088 Financial income 7 9 383 541 Financial expenses 7 (11 358) (12 439) Other financial gains/(losses) 8 230 383 8 555 Financial income/(expenses), net 228 408 (3 343) Profit/(loss) before income tax 636 862 759 745 Income tax expense 9 (152 636) (167 697) Profit/(loss) for the year 484 226 592 048 Other comprehensive income from items that will not be reclassified to profit or loss: Actuarial gains and losses - (1 296) Tax on items not reclassified to profit or loss - 285 Net other comprehensive income/(loss) - (1 011) Comprehensive profit for the year 484 226 591 037 Earnings per share (in NOK): Basic and diluted earnings per ordinary share 10 13.05 15.86 RANA GRUBER ANNUAL REPORT 2022128 FINANCIAL STATEMENTS Mo i Rana, Norway, 15 March 2023 The board of directors and CEO – Rana Gruber ASA Morten Støver Kristian Adolfsen Frode Nilsen Ragnhild Wiborg Hilde Rolandsen Chair Director Director Director Director Henriette Zahl Pedersen Johan Hovind Lasse O. Strøm Gunnar Moe Director Director Director CEO STATEMENT OF FINANCIAL POSITION At 31 December 2022 Amounts in NOK thousand Notes 31 Dec 2022 31 Dec 2021 ASSETS Non-current assets Mine properties 11 309 096 303 768 Property, plant, and equipment 12 182 300 153 416 Right-of-use assets 13 137 893 114 284 Other non-current financial assets 14, 19 - 1 500 Derivative financial assets 19, 23 23 151 - Total non-current assets 652 440 572 968 Current assets Inventories 16 159 919 89 215 Trade receivables 15, 19 178 670 63 087 Other current receivables 19 53 635 36 802 Derivative financial assets 19, 23 187 545 103 247 Cash and cash equivalents 17 212 837 264 363 Total current assets 792 606 556 714 Total assets 1 445 046 1 129 682 EQUITY AND LIABILITIES Equity Share capital 25 9 271 9 348 Share premium 25 92 783 92 783 Other equity 720 999 479 680 Total equity 823 053 581 811 Liabilities Lease liabilities 13 97 199 82 601 Net deferred tax liabilities 9 146 046 30 351 Provisions 28 15 000 15 000 Other non-current liabilities 2 265 1 553 Net defined benefit liabilities 24 - 975 Total non-current liabilities 260 510 130 480 Trade payables 21 160 614 119 115 Lease liabilities (current portion) 13 40 935 31 107 Current tax liabilities 9 109 029 145 653 Derivative financial liabilities 19, 23 - 7 680 Other current liabilities 21 50 905 113 8 36 Total current liabilities 361 483 417 391 Total liabilities 621 993 547 871 Total equity and liabilities 1 445 046 1 129 682 RANA GRUBER ANNUAL REPORT 2022 129FINANCIAL STATEMENTS STATEMENT OF CASH FLOWS For the period ended 31 December 2022 Amounts in NOK thousand Notes 2022 2021 restated 1 Cash flow from operating activities: Profit before income tax 636 862 759 745 Adjustments for: Movements in provisions, pensions, and government grants (1 178) (554) Depreciation of tangible assets 11, 12, 13 158 736 174 247 (Gain)/loss on sale of tangible assets Unsettled loss/(gain) on derivative financial instruments 23 (210 696) (95 567) Fair value change on settled derivatives 23 95 567 (157 746) Net finance income/expense 7 3 712 11 898 Working capital changes: Change in inventories 16 (70 704) (54 109) Change in receivables and payables 15, 21 (151 635) 276 845 Income tax paid 9 (73 362) (33 265) Interests received 7 7 647 541 Interests paid 7 (11 359) (13 589) Net cash flow from operating activities 383 590 868 446 Cash flow from investment activities: Expenditures on mine development 11 (96 022) (67 011) Expenditures on property, plant, and equipment 12 (65 698) (58 642) Cash receipt from repayment of loans 14 - 133 939 Net cash flow from investing activities (161 720) 8 286 Cash flow from financing activities: Acquisition of treasury shares 25 (14 163) (9 793) Cash receipts from sale of treasury shares 25 - 6 958 Payment of principal portion of lease liabilities 18 (30 412) (25 653) Cash repayments of amounts borrowed 18 - (196 288) Dividends paid 25 (228 821) (412 587) Net cash flow from financing activities (273 396) (637 363) Net increase/(decrease) in cash and cash equivalents (51 526) 239 369 Cash and cash equivalents at the beginning of the period 17 264 363 24 994 Cash and cash equivalents at the end of the period 17 212 837 264 363 1) Rana Gruber has restated amounts in 2021 in relation to two line items. ‘Change in receivables and payables’ included a negative effect amounting to NOK 157746 thousand for the effects that are now presented under ‘Fair value change on settled derivatives’. The management believes this presentation improves the understandability of the cash flow effects from derivative financial instruments. RANA GRUBER ANNUAL REPORT 2022 130 FINANCIAL STATEMENTS STATEMENT OF CHANGES IN EQUITY For the period ended 31 December 2022 Amounts in NOK thousand Notes Share capital (Note 25) Share premium (Note 25) Treasury shares Retained earnings Total equity Balance at 1 January 2021 9 348 92 783 - 276 565 378 696 Profit for the year - - - 592 048 592 048 Other comprehensive income - - - (1 011) (1 011) Total comprehensive income - - - 591 037 591 037 Cash dividends 25.3 - - - (385 087) (385 087) Acquisition of treasury shares 25 - - (2 835) - (2 835) Balance at 31 December 2021 9 348 92 783 (2 835) 482 515 581 811 Profit for the year - - - 484 226 484 226 Total comprehensive income - - - 484 226 484 226 Cash dividends 25.3 - - - (228 821) (228 821) Share capital reduction (77) - 16 998 (16 921) - Acquisition of treasury shares - - (14 163) - (14 163) Balance at 31 December 2022 9 271 92 783 - 720 999 823 053 'Treasury shares’ and ‘retained earnings’ are presented together in the statement of financial position as ‘other equity'. RANA GRUBER ANNUAL REPORT 2022 131FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS Note 01 Corporate information Rana Gruber ASA (henceforth, the ‘company’ or ‘Rana Gruber’) is a limited liability company incorporated and domiciled in Norway whose shares are traded on Oslo Stock Exchange. The company was established in 1964 and the registered office is located at Mjølanveien 29, Norway. Rana Gruber operates its own mines with iron ore deposits. The mines are located approximately 35 kilometers northeast from the city of Mo i Rana in Norway, in Storforshei and Ørtfjell, in the Dunderland Valley. The open-pit and underground mining take place at the company's iron ore deposits at Ørtfjell. The company's processing plant is also located near Mo i Rana, more precisely in Gullsmedvik, with direct access to the company's own port and railway connection. Rana Gruber consisted of Rana Gruber AS and its subsidiary Rana Gruber Minerals AS (‘Rana Gruber Minerals’). The two group entities were merged in December 2021. At 31 December 2022, the company had 286 employees (2021: 306), and 279 full-time equivalents in 2022 (2021: 292). These financial statements were authorised by the board of directors and the CEO on 15 March 2023. Note 02 Basis of preparation Rana Gruber’s financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS) and interpretations by the IFRS Interpretations Committee (IFRIC) as endorsed by the European Union (EU). There are no material differences between IFRS as issued by the IASB and as endorsed by the EU for the financial statements of the company. As explained in note 1, Rana Gruber and Rana Gruber Minerals merged in December 2021. For the year ended 31 December 2021, Rana Gruber prepared a set of consolidated financial statements, and also a set of individual financial statements for the parent company (Rana Gruber AS), both under IFRS. For 2022, the company is only presenting one set of financial statements, which are those for Rana Gruber ASA. For the 2022 financial statements, the company has decided to present the comparative period (i.e. 2021) using the information contained in the consolidated financial statements, as the management believes it better represents the continuation of the business from one period to another. The 2022 financial statements have been prepared based on the going concern assumption. When preparing financial statements, the management has made an assessment of the company’s ability to continue as a going concern. There are no material uncertainties related to events or conditions that may cast significant doubt upon the company’s ability to continue as a going concern. 2.1. HISTORICAL COST CONVENTION The financial statements have been prepared on a historical cost basis, except for the following items being measured at fair value: ■ Trade receivables subject to provisional price mechanisms (see note 3.7). ■ Derivative instruments (see note 3.8). 2.2. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES, AND ASSUMPTIONS The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the management to exercise its judgment in the process of applying the company’s accounting policies. Changes in assumptions may have a significant impact on the financial statements in the period the assumptions change. The management believes the underlying assumptions are appropriate. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 30 critical judgements and estimates. 2.3. NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED Certain new accounting standards, amendments to accounting standards and interpretations have been published. These are not mandatory for 31 December 2022 reporting periods and have not been early adopted by the company. These standards, amendments or interpretations are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions. RANA GRUBER ANNUAL REPORT 2022132 FINANCIAL STATEMENTS Note 03 Significant accounting principles 3.1. FUNCTIONAL CURRENCY AND PRESENTATION CURRENCY The financial statements are presented in NOK which is also the functional currency of the company. See note 30.2.1 for further details on the judgements made in this respect. All amounts are rounded to the nearest NOK thousand, unless stated otherwise. 3.2. TRANSACTIONS AND BALANCES IN FOREIGN CURRENCY Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates are recognised in profit or loss. Gains and losses on derivative financial instruments are presented in the statement of comprehensive income within ‘other financial gains/ (losses)’. Foreign exchange gains and losses that relate to borrowings are presented in the statement of comprehensive income within finance expenses. All other foreign exchange gains and losses are presented within ‘other financial gains/(losses)’. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. 3.3. REVENUE RECOGNITION Please find a description of the nature of revenues for Rana Gruber in note 5. Rana Gruber recognises revenue at the agreed transaction price in the contract with the customer at the time when the company transfers the control of a distinct product or service to a customer. Revenue is measured at the fair value of the consideration received or receivable. Revenue from the sale of hematite is subject to a provisional price mechanism. The company recognises revenue when the amount of revenue can be reliably measured in accordance with note 5, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the company’s activities as described below. The company bases its estimates on historical results and current market data, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement. Revenue is recognised net of VAT, discounts and foreign exchange effects if the transaction is in a foreign currency. Consideration payable to customers for distinct (e.g. consulting) services are treated in the same way as regular purchases from suppliers for the amount reflecting its fair value. The nature of Rana Gruber's revenue recognition is disaggregated as follows: ■ Revenue related to sales of hematite. ■ Revenue related to sales of magnetite. ■ Revenue related to sales of specialty products (Colorana). The majority of revenue from contracts with customers arise from the sale of hematite products. Further disclosures on the accounting policies, judgements and estimates for this revenue stream are included in note 5. 3.4. LEASES The company recognises right-of-use assets and lease liabilities for all lease contracts, except leases that are considered short-term (lease term of 12 months or less), or for which underlying assets are of a low value when new. 3.4.1. Right-of-use assets The company recognises right-of-use assets at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liabilities adjusted for any lease payments made at or before the commencement date, adjusted for initial direct costs and lease incentives received. The right-of-use assets are subsequently depreciated using the straight-line method over the shorter of the lease term or the useful life of the underlying asset. In addition, the right-of-use assets are reduced by any impairment charges and adjusted for certain remeasurements of the lease liabilities. 3.4.2. Lease liabilities The company recognises lease liabilities at the lease commencement date. The lease liabilities are measured at the present value of future lease payments at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company’s incremental borrowing rate. Rana Gruber utilises the incremental borrowing rate as the discount rate for virtually all lease agreements. The company has elected to separate lease and non-lease components included in lease payments for property leases. Lease payments included in the measurement of the lease liabilities comprise the following: ■ fixed payments, including in-substance fixed payments; ■ variable lease payments that depend on an index or a rate; initially measured using the index or rate at the commencement date; ■ (if any) amounts expected to be payable under a residual value guarantee; ■ (if any) lease payments in an optional renewal period if the company is reasonably certain to exercise an extension option and penalties for early termination of a lease unless the company is reasonably certain not to terminate early. The lease liabilities are measured at amortised cost using the effective interest rate method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the company’s estimate of the amount expected to be payable under a residual value guarantee, or if the company changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liabilities are remeasured, a matching adjustment is made to the carrying amount of the right-of-use assets. 3.5. IMPAIRMENT OF NON-FINANCIAL ASSETS Non-financial assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash- generating units). Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period. RANA GRUBER ANNUAL REPORT 2022 133FINANCIAL STATEMENTS Rana Gruber reviews the estimated residual values and expected useful lives of assets at least annually. In particular, the company considers the impact of health, safety, and environmental legislation in its assessment of expected useful lives and estimated residual values. The company assesses where climate risks could have a significant impact, such as the introduction of emission-reduction legislation that may increase manufacturing costs. These risks in relation to climate related matters are included as key assumptions where they materially impact the measure of recoverable amount and these assumptions have been included in the cash-flow forecasts in assessing value-in-use amounts. 3.6. CASH AND CASH EQUIVALENTS Cash and cash equivalents presented in the statement of cash flows includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are held for the purpose of meeting short-term cash commitments and are subject to an insignificant risk of changes in value, and bank overdrafts. An integral part of the company’s cash management policies is to hold bank overdrafts. Overdrafts are repayable on demand and the bank balance often fluctuates from being positive to overdrawn. Bank overdrafts are included as a component of cash and cash equivalents, and they are presented in the statement of financial position net of other cash at bank and in hand. 3.7. OTHER FINANCIAL ASSETS Trade receivables related to provisional pricing arrangements are measured at fair value through profit or loss from initial recognition and until the date the final invoice has been issued, which is the moment when the final price of the iron ore is known. When the price is known, the trade receivables are reclassified to trade receivables which are not subject to provisional price mechanisms. Please see note 5 for further details. All other financial assets, excluding derivatives, meet the SPPI (solely payments of principal and interest) criteria and are managed in a business model of Hold to Collect. These financial assets are in the measurement category amortised cost. The company initially measures trade receivables not subject to provisional pricing arrangements at fair value, being the amount of consideration that is unconditional from the customer. Subsequent to initial recognition, these assets are measured at amortised cost using the effective interest method. Income from these financial assets is calculated on an effective yield basis and is recognised in the statement of comprehensive income. Financial assets are classified as current assets, except for those where the management has the intention to hold the investment for over 12 months or financial assets with maturities later than 12 months after the balance sheet date. These assets are classified as non-current assets. 3.8. DERIVATIVES The company enters into derivative agreements to reduce cash flow risk arising from changes in exchange rates, iron ore prices and electric power prices. Derivatives are measured at fair value through profit or loss (FVTPL) at each reporting period. The corresponding effects from derivatives are presented within ‘other financial gains and losses’ line item in the statement of comprehensive income. The fair value of these derivatives is derived from observable prices in quoted markets. See additional information in note 23. 3.9. IMPAIRMENT OF FINANCIAL ASSETS The company assesses on a forward-looking basis the expected credit loss associated with its other non-current financial assets, applying the general approach for the recognition of expected credit losses. Under the general approach, the loss allowance for each financial instrument is measured at an amount equal to the 12-month expected credit losses, unless the credit risk of the financial instrument has increased significantly after initial recognition. The company does not hold any financial assets measured using the general approach whose credit risk has been significantly increased. While cash and cash equivalents also are subject to the impairment requirements, the expected credit losses are immaterial. For trade receivables and contract assets, the company applies the simplified approach to measuring expected credit losses, which uses a lifetime expected impairment provision for all trade receivables and contract assets. 3.10. BORROWING COSTS Borrowing costs directly attributable to the construction of an asset that necessarily takes a substantial period of time to get ready for its intended use (a qualifying asset) are capitalised as part of the cost of the respective asset. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. As a general rule, exploration and evaluation assets (see note 3.13 for further information) are not considered qualifying asset by the company, as the company can only rarely conclude that probable economic benefits can be expected. Where the funds used to finance a project form part of general borrowings, the amount capitalised is calculated using a weighted average of rates applicable to relevant general borrowings of the company during the period. All other borrowing costs are recognised in the statement of comprehensive income in the period in which they are incurred. 3.11. STATEMENT OF CASH FLOWS The cash flow statement is prepared using the indirect method. Interest paid on trade payables and interest received on trade receivables are presented as operating cash flows. Interests paid on borrowings are classified as operating cash flows. Cash flows are only classified as investing activities if they result in the recognition of an asset in the statement of financial position. Cash payments for the principal portion of the lease liabilities are presented as cash flows from financing activities, whereas cash payments for short-term lease payments, and payments for leases of low-value assets that are not included in the measurement of the lease liabilities are presented as cash flows from operating activities. 3.12. INVENTORIES Iron ore stockpiles are measured and valued at the lower of cost or net realisable value. Net realisable value is the estimated future sales price of the product the company expects to realise when the product is processed and sold, less estimated costs to complete production and bring the product to sale. Cost of inventories, other than consumables, is comprised of direct production costs including an appropriate portion of fixed and variable overhead costs, including depreciation, incurred in converting materials into finished goods, based on the normal production capacity. Cost for iron ore produced which is stored on the ground in the open pit is valued to costs from open-pit operations, while cost for iron ore stored in the silo is valued to a combination of RANA GRUBER ANNUAL REPORT 2022134 FINANCIAL STATEMENTS cost for both open pit and underground production. Materials and supplies are measured at the lower of cost or net realisable value. Any provision for obsolescence is determined by reference to specific items of stock. A regular review is undertaken to determine the extent of any provision for obsolescence. Costs of finished goods and iron ore stockpiles are assigned using the weighted average cost formula, whereas the costs of production supplies and spare parts are assigned using the first-in, first- out (FIFO) method. to determine the extent of any provision for obsolescence. 3.13. EXPLORATION AND EVALUATION ASSETS The company recognises expenditures incurred during the exploration and evaluation (E&E) phase of its mining projects as assets, according to their tangible or intangible nature. These are measured initially at cost. E&E assets are not subsequently depreciated but are periodically assessed for impairment. Expenditures that are assessed for recognition have mainly included activities related to exploratory sample drilling and subsequent geological analysis carried out to determine the economic viability and technical feasibility of the mineral resources. After the company can demonstrate the technical feasibility and commercial viability of extracting the iron ore, E&E assets are reclassified into mines under construction. If the conclusion is that this cannot be demonstrated, E&E assets are expensed. E&E assets are assessed for impairment when facts and circumstances suggest that the carrying amount may exceed its recoverable amount. Such circumstances include changes to operational mining plans, lack of commercially viable quantities of mineral resources for the areas in which E&E activities have taken place and changes to market prices affecting the investments plans for new mining areas. 3.14. MINE PROPERTIES (EXCLUDING E&E ASSETS) AND PROPERTY, PLANT, AND EQUIPMENT The company carries out mining operations in both underground and open-pit mines. Mine properties and property, plant, and equipment (‘PPE’) are measured at cost less accumulated depreciation and any accumulated impairment losses. Mines under construction are reclassified into producing mines when the development phase of the mine is finalised, which is the point where the production phase starts. The cost of mine properties and PPE includes: ■ its construction cost or purchase price, respectively; ■ any directly attributable costs; ■ the initial estimate of restoration costs; ■ any borrowing costs incurred when constructing the qualifying assets (see note 11); and ■ any reclassified E&E assets, at the point in time when the new mine operation is considered to be commercially viable and technically feasible. Costs are capitalised until the moment mine properties and PPE assets are in the location and condition necessary for them to be capable of operating in the manner intended by the management. Subsequent expenditure in mine properties and PPE is capitalised to the extent it is probable that future economic benefits associated with the item will flow to the entity; and the cost of the item can be measured reliably, following the criteria above. All other repairs and maintenance costs are charged to profit or loss during the reporting period in which they are incurred. 3.14.1. Depreciation PPE assets (except land) are depreciated to their residual values over their economic useful life. The remaining useful life of PPE is reviewed at least annually. In doing so, the management considers factors such as the expected level of use, the expected levels of wear and tear, the planned maintenance levels, and obsolescence. In addition, the management also considers the effects from climate- related aspects, such as plans for replacement of fossil fuel-powered machinery to electrical ones, and any other obsolescence caused by environmental regulations the company needs to comply with or the potential issue of stranded assets caused by environmental factors. Infrastructure used in the underground mining activities, such as the transportation tunnels, are depreciated using a straight-line method. Other assets relating to the producing mines assets are depreciated following the unit-of-production (UOP) method. The unit of measure is the number of underground extraction detonations performed during each reporting period, compared to the total number of extraction detonations planned for the relevant iron ore deposit. The separate mining levels, and not the mine as a whole, are used as measurement basis when applying this method. The estimation of total expected extraction detonations is subject to a certain level of uncertainty. However, the company estimates its number of planned extraction detonations based on production and extraction plans which are monitored and updated on an ongoing basis. The following table summarises the useful life and depreciation method by class of asset: Producing mines Transportation tunnels (underground infrastructure) Buildings Machinery and plants Operating equipment Depreciation method UoP Straight-line Straight-line Straight-line Straight-line Useful life Based on estimated detonations 7–15 years 7–50 years 5–10 years 5–10 years RANA GRUBER ANNUAL REPORT 2022 135FINANCIAL STATEMENTS Each component is treated separately for depreciation purposes and depreciated over its individual useful life. When a significant component is replaced, the old component is derecognised and the new component capitalised, if its cost is recoverable. 3.14.2. Stripping activity assets The company engages in stripping activities, which consists of the removal of waste rock to access iron ore deposits, during the production phase of a surface (open pit) mine. The company recognises stripping activity assets to the extent that it gets an improved access to the ore body that will be consumed over a period of more than one year, it can identify the component of ore body for which access has been improved; and it can measure the associated costs reliably. Stripping activities performed for the financial reporting periods 2022 and 2021 have not been recognised within the mine properties assets due to its short-term nature. All stripping costs have consequently been included as direct costs of inventory in the period they were incurred. 3.15. RESEARCH AND DEVELOPMENT EXPENDITURES Research activities are expensed in the period they are incurred. Development expenditures are capitalised when all the following can be demonstrated, at the time or shortly after the expenditure is incurred: ■ the technical feasibility of completing the intangible asset so that it will be available for use or sale. ■ its intention to complete the intangible asset and use or sell it. ■ its ability to use or sell the intangible asset. ■ how the intangible asset will generate probable future economic benefits. ■ the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset. ■ its ability to measure reliably the expenditure attributable to the intangible asset during its development. Expenditure on an intangible item that was initially recognised as an expense is not recognised as part of the cost of an intangible asset at a later date. 3.16. EMPLOYEE BENEFITS During 2021, and until the beginning of January 2022, the company operated defined benefit pension plans for its employees. The company had a collective defined benefit scheme comprising 429 persons at year-end 2021, of which 292 were working individuals. As of January 2022, the company replaced its defined benefit pension plan with a defined contribution plan. The company recognised the loss on settlement, at the date of settlement, as part of the employee benefit expenses for 2022. This loss was derived from the difference between the present value of the defined benefit obligation at the date of the settlement and the settlement price (including plan assets transferred in connection with the settlement). Under its defined contribution plans, the company is not subject to actuarial risk, and the company has no further payment obligations once contributions are paid. Therefore, the company recognises liabilities for the accrued costs from these plans, for the amount corresponding to the services rendered by the employees, net of contributions paid. These costs are recognised as expenses unless they can be capitalised as part of the cost of another asset (e.g. inventories). See note 24 for further information on the defined contribution plans of the company. 3.17. INCOME TAXES The income tax expense or credit for the period is the tax payable on the current period’s taxable income, based on the applicable income tax rate for the relevant tax jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. Deferred tax/tax assets are calculated at 22 per cent of the temporary differences between book value and tax values, in addition to tax losses to carry forward at the end of the accounting year. Tax increasing and tax reducing temporary differences that reverse or can reverse in the same period are netted. The management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The company measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty. Deferred income taxes are determined by using tax rates (and laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred income tax assets are realised, or the deferred income tax liabilities are settled. Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and tax losses. Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the assets and settle the liabilities simultaneously. Current and deferred taxes are recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. 3.18. PROVISIONS Provisions for legal claims and future rehabilitation activities are recognised when the company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of economic resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Provisions are measured at the present value of the management's best estimate of the expenditure required to settle the present obligation in the future. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. The impact of climate-related matters on remediation of environmental damage is considered with determining the decommissioning liabilities on the mining assets which has been disclosed in note 28 provisions. RANA GRUBER ANNUAL REPORT 2022136 FINANCIAL STATEMENTS 3.19. EARNINGS-PER-SHARE 3.19.1. Basic earnings per share Basic earnings per share is calculated by dividing: ■ the profit attributable to owners of the parent company, excluding any costs of servicing equity other than ordinary shares ■ by the weighted average number of ordinary shares outstanding during the financial year, adjusted for treasury shares (see note 25). 3.19.2. Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account: ■ the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and ■ the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. A potential ordinary share is a financial instrument or other contract that may entitle its holder to ordinary share, and whose conversion into an ordinary share would lead to a reduction in earnings per share or an increase in loss per share from continuing operations. 3.20. GOVERNMENT GRANTS AND PAYMENTS TO AUTHORITIES Government grants relating to the purchase of property, plant, and equipment are normally included in non-current liabilities as deferred income and they are credited to profit or loss on a straight-line basis over the expected lives of the related assets. Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them with the costs that they are intended to compensate. The company received NOK 0.2 million in 2022 (2021: NOK 0.6 million) in grants from the tax incentive scheme. In accordance with the Norwegian Accounting Act, section 3-3d, Rana Gruber has prepared a report on payments to authorities. According to the regulations, companies with activities in the extractive industry or forestry shall disclose such payments. Rana Gruber has in 2022 paid NOK 73 480 thousand as corporate income tax (2021: NOK 32 299 thousand), NOK 33 thousand to Rana Kommune (2021: NOK 0 thousand), NOK 202 thousand to the Norwegian Institute for Water Research (2021: NOK 0 thousand) and NOK 172 thousand to the Norwegian Directorate of Mining (2021: NOK 114 thousand). In addition, Rana Gruber paid NOK 34 thousand to the Norwegian Environment Agency in 2021. Note 04 Segment information Rana Gruber’s business is primarily related to the excavating, processing and sale of iron oxide in the form of hematite, magnetite and iron oxide pigments. Hematite is used for iron and steel production in smelting plants in Europe and magnetite is used in industrial water purification processes. Operating segments are components of the company regularly reviewed by the chief operating decision maker to assess performance and be able to allocate resources. The company's CEO (chief executive officer) is the chief operating decision maker at Rana Gruber. The company as a whole is operated as a single segment. See note 5 for a disaggregation of revenue from external customers by product. Rana Gruber’s main customer during 2022 and 2021 constitute circa 90-95 per cent of the total annual iron ore production volumes. The total revenue from that single customer, based in the Singapore amounted to NOK 1 234 765 thousand in 2022 (2021: NOK 1 460 095 thousand). Substantially all of the company’s goods sold to this customer are delivered to end users based in the European Union and United Kingdom area. Domestic sales to external customers accounted for less than two per cent and one per cent of total revenue for the years 2022 and 2021, respectively. All non-current assets held by the company are located in Norway. Note 05 Revenue 5.1. SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES: REVENUE FROM SALES OF HEMATITE Revenue from sales of hematite accounts for substantially all revenue from contracts with customers. Rana Gruber recognises revenue from its sales of hematite to its customers, acting as a principal to the transactions. Rana Gruber does not typically provide freight, shipping or insurance services to its customers. Therefore, providing the goods is the only performance obligation identified on the contracts with customers. Each shipment of hematite is treated as a separate performance obligation. Typically, Rana Gruber is responsible for the goods until the hematite is loaded onto the vessels chartered by the customer at the port of Mo i Rana, under the Incoterms Free on Board (FOB). This is the point in time when Rana Gruber obtains an unconditional right to payment and when control is transferred to the customer. The initial invoice is normally paid by the customer within three to five working days after the shipment date. Customer acceptance for the goods is not considered a relevant indicator for Rana Gruber, as there is certainty on the specification requirements of the goods when the hematite is loaded onboard the vessels. The sale of hematite is typically subject to a provisional price mechanism. At the moment of the sale, invoices are issued to clients based on provisional prices, reflecting the average of past spot prices of iron ore. Final prices are derived from monthly averages of iron ore prices during the reference period (typically, three months after each shipment has taken place). Typically, the final invoice is paid by the customer within 3 to 5 working days after the invoice date. Under IFRS, revenue is recognised at the shipment date for an amount that corresponds to the average forward prices for the month in which the invoice will be finally settled. At each reporting date after the date of the sale, the corresponding trade receivable is measured using the updated forward prices. Subsequent changes in the value RANA GRUBER ANNUAL REPORT 2022 137FINANCIAL STATEMENTS of the trade receivables due to changes in the forward prices are recognised as revenue up until the date of the final settlement for the shipment. When the price is known, the trade receivables are reclassified to trade receivables which are not subject to provisional price mechanisms. For disclosures on the provisionally priced trade receivables, see note 3.8 and note 19. The transaction price for hematite shipments is also subject to variable consideration depending on several parameters such as Fe content and moisture, which can be estimated with a high level of certainty at the moment the revenue is recognised. When variable consideration depends on factors that are outside of Rana Gruber’s influence, the variable consideration is not recognised until the moment when the uncertainty is resolved, normally being shortly before the final invoice is sent to the client. Rana Gruber uses the practical expedient of not disclosing the information required in paragraph 120 of IFRS 15 (i.e. the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period). 5.2. DISAGGREGATED INFORMATION FOR REVENUE FROM CONTRACTS WITH CUSTOMERS The following breakdown of revenue from contracts with customers presents a disaggregation by major product line: Revenue (Amounts in NOK thousand) 2022 2021 Sales of hematite 1 305 534 1 644 212 Sales of magnetite 111 232 115 25 4 Sales of Colorana 47 391 43 840 Total revenue from contracts with customers 1 464 157 1 803 306 Effect from provisionally priced receivables (61 765) (146 195) Other income 20 927 11 318 Total revenue 1 423 319 1 668 429 Revenue arising from other than contracts with customers includes primarily the fair value changes in the value of the trade receivables due to the provisional price mechanisms from the shipment date and up until the invoice is finally settled and other income arising primarily from sale of services related to consulting and geophysical analysis. Revenue from service transactions is recognised as the service is performed. Note 06 Other operating expenses Amounts in NOK thousand 2022 2021 Mining activities: extraction and maintenance 92 259 71 789 Expenses related to short-term and low-value leases 13 321 23 946 Auditor's remuneration 2 609 2 915 Consulting fees 25 878 23 074 Energy expenses (fuel, electric power, water, etc.) 20 025 16 619 Insurance fees 16 971 14 528 Shipping costs 16 422 14 279 Contribution Mo i Rana Airport 13 570 - Other 25 708 21 956 Total other operating expenses 226 763 189 106 Expenses incurred in research and development projects have been NOK 5 434 thousand during the 2022 financial year (2021: NOK 3786 thousand). No development expenses have been capitalised during 2022 or 2021. Research and development activities have been mostly in relation to the Rana Gruber’s three key strategic projects: increasing the iron content of the hematite product; increasing magnetite production; and eliminating all carbon emissions from production by the end of 2025. Research and development expenses in relation to these projects are expected to continue in the coming year. The auditor remuneration presents the following disaggregation: Auditor’s remuneration Amounts in NOK thousand 2022 2021 Statutory audit fees 2 235 1 868 Technical assistance 277 1 007 Tax advisory services 97 77 Total auditor's remuneration 2 609 2 952 RANA GRUBER ANNUAL REPORT 2022138 FINANCIAL STATEMENTS Note 07 Finance income and costs Amounts in NOK thousand 2022 2021 Financial income: 9 384 541 Interest income from bank deposits 7 646 - Interest income from related parties - - Other financial income 1 738 541 Financial costs: (11 359) (13 589) Interest on borrowings (4 589) (7 935) Interest on lease liabilities (6 547) (5 579) Other financial costs (223) (75) Capitalised borrowing costs (see note 11.2) - 1 150 Net finance result (1 975) (11 898) Note 08 Other financial gains and losses Amounts in NOK thousand 2022 2021 Net gain/(loss) on financial assets at fair value through profit or loss - derivatives on exchange rates (61 166) (38 917) Net gain/(loss) on financial assets at fair value through profit or loss - derivatives on iron ore prices 53 239 23 401 Net gain/(loss) on financial assets at fair value through profit or loss - derivatives on interest rates - 2 615 Net gain/(loss) on financial assets at fair value through profit or loss - derivatives on electric power 217 768 - Net foreign exchange gains (losses) 20 542 21 456 Total other financial gains and losses 230 383 8 555 As a consequence of rebalancing the positions in the electric power market, and in line with the company’s hedging strategies, Rana Gruber has realised a gain during 2022 of NOK 77 292 thousand, which is included in the Net gain/(loss) – derivatives on electric power. The aim for the rebalancing was to ensure a more optimal hedging strategy for the future energy consumption needed, and hence avoiding adverse impacts from future volatility in the spot market in the region where Rana Gruber is located. See note 23.3 for further details on the open positions at 31 December 2022. Note 09 Income tax 9.1. INCOME TAX EXPENSE Amounts in NOK thousand 2022 2021 Current income tax 109 232 146 207 Adjustments for tax of prior periods 1 183 - Change in deferred tax 42 221 21 489 Total income tax expense 152 636 167 697 9.2. DEFERRED TAX Deferred tax relating to OCI Amounts in NOK thousand 2022 2021 Actuarial gains and losses - 285 Total deferred tax charged to OCI - 285 RANA GRUBER ANNUAL REPORT 2022 139FINANCIAL STATEMENTS 9.2.2. Deferred Tax Balances Amounts in NOK thousand 2022 2021 Tangible fixed assets (PPE & mine properties) (5 726) (26 151) Right-of-use assets 105 2 125 Derivatives (46 353) (5 572) Inventories (27 324) 189 Receivables (31 830) (3 845) Gain and loss account (234) (292) Provisions 3 300 2 970 Pension funds/-liabilities (net) - 214 Prepayments (37 995) Total deferred tax relating to temporary differences (146 046) (30 351) Tax losses to carry forward - - Excluded interest deduction to carry forward - - Carrying value of deferred tax assets (liabilities) (146 046) (30 351) Explanation of change in deferred tax Amounts in NOK thousand 2022 2021 Carrying value of deferred tax at 1 January (30 351) (9 147) Change in deferred tax liabilities (42 243) (21 206) Uncertain tax position revenue (73 452) 0 Carrying value of deferred tax at 31 December (146 046) (30 351) 9.2.3. Uncertain tax positions Up until the 2020 tax assessment year, the company recognised revenue on an accrual basis for both accounting and tax purposes. However, due to the volatility from the provisionally priced trade receivables explained in note 5.1, the company’s estimation of revenue at fiscal year-end date can vary significantly with the final revenue realised at settlement date. For this reason, the company has ongoing discussions with the tax authorities in Norway with respect to the treatment of its revenue for tax purposes. The company’s position in this respect is that the current income tax expense should be based on the actual amounts of revenue realised, in line with the principles outlined in the Norwegian income tax act. In the financial statements issued for the period ended 31 December 2021, the company estimated the value of its current income tax expense following the approach applied for the 2020 tax assessment year, i.e., no difference between accounting and tax bases for revenue recognition. However, this estimate was changed at the moment of calculating the final tax settlement for the income tax filing for the assessment year 2021, filed in June 2022. At the time of the issue of these financial estimates, the company estimates it is more likely than not that the currently applied tax treatment will be accepted by the tax authorities, and therefore the tax basis for revenue is based on the revenue finally settled in the period in which it occurs. The measurement of the tax balances is thus based on what the management believes is the most likely outcome from the dialogue with the Norwegian tax authorities. For the year ended 31 December 2022, the management has not identified any other significant uncertain tax positions for the company. 9.3. RECONCILIATION OF INCOME TAX EXPENSE Amounts in NOK thousand 2022 2021 Profit before tax 636 862 759 745 Expected income tax at statutory income tax rate of 22% (2021: 22%) 140 110 167 144 Permanent differences 12 526 553 Calculated tax expense/(income) 152 636 167 697 RANA GRUBER ANNUAL REPORT 2022140 FINANCIAL STATEMENTS Note 10 Earnings per share (EPS) 10.1. BASIC AND DILUTED EARNINGS PER SHARE Amounts in NOK 2022 2021 From continuing operations attributable to the ordinary equity 13.05 15.86 Total basic and diluted earnings per share attributable to the ordinary equity 13.05 15.86 Weighted average number of outstanding shares, excluding treasury shares 37 119 092 37 348 854 For the reporting periods included in these financial statements, the company had no dilutive potential ordinary shares. The change in the weighted average number of shares during 2022 relates to the acquisition and cancellation of shares disclosed in note 25.2. Note 11 Mine properties Amounts in NOK thousand Exploration and evaluation assets Mines under construction Producing mines Total At 1 January 2021 Cost - 855 804 855 804 Accumulated depreciation and impairment - (509 460) (509 460) Net book amount - - 346 344 346 344 Year ended 31 December 2021 Opening net book amount - - 346 344 346 344 Additions 8 539 58 472 67 011 Depreciation charge - (109 587) (109 587) Closing net book amount 8 539 - 295 229 303 768 Amounts in NOK thousand Exploration and evaluation assets Mines under construction Producing mines Total At 31 December 2021 Cost 8 539 - 914 276 922 815 Accumulated depreciation and impairment - - (619 047) (619 047) Net book amount 8 539 - 295 229 303 768 Year ended 31 December 2022 Opening net book amount 8 539 - 295 229 303 768 Additions 41 714 39 537 14 770 96 021 Transfers (41 976) 41 976 - - Depreciation charge - - (90 693) (90 693) Closing net book amount 8 277 81 513 219 306 309 096 At 31 December 2022 Cost 8 277 81 513 929 046 1 018 836 Accumulated depreciation and impairment - - (709 740) (709 740) Net book amount 8 277 81 513 219 306 309 096 11.1. SIGNIFICANT ADDITIONS FROM MINING ACTIVITIES DURING THE PERIOD Most of the additions during 2022 relate to the works in the Kvannevann underground mine. During the second quarter of 2022, the company started the works on the next underground mine level (L91) in the Kvannevann underground mine, which includes the development of access tunnels and infrastructure needed to develop level 91 for the Kvannevann underground mine. The production in such mine level is expected to commence in 2024. RANA GRUBER ANNUAL REPORT 2022 141FINANCIAL STATEMENTS 11.2. CAPITALISATION OF BORROWING COSTS The company has not capitalised borrowing costs during 2022, as most of the development activities related to the exploration and evaluation assets. In 2021, the company capitalised NOK 1 150 thousand, using an average capitalisation rate of 3.41 per cent. 11.3. EXPLORATION AND EVALUATION ACTIVITIES The company has undertaken exploration and evaluation activities during the period to assess the technical feasibility and commercial viability of starting the extraction in new areas. The assets recognised during the period mostly relate to the cost of geophysical studies, and exploratory drilling. No exploration and evaluation expenditures have been directly recognised as expense during 2022 and 2021. During 2022, the company has transferred most of its ‘exploration and evaluation assets’ to ‘mines under construction’, as it was determined that the works in level 91 of the Kvannevann underground mine, as the technical feasibility and commercial viability of the project could be demonstrated. Note 12 Property, plant, and equipment Amounts in NOK thousand Land and buildings Machinery and plants Operating equipment etc. Total At 1 January 2021 Cost 53 168 588 919 55 379 697 466 Accumulated depreciation and impairment (36 365) (478 075) (48 335) (562 775) Net book amount 16 803 110 844 7 044 134 691 Year ended 31 December 2021 Opening net book amount 16 803 110 8 4 4 7 044 134 691 Additions 34 037 22 947 1 658 58 642 Depreciation charge (4 093) (33 735) (2 089) (39 917) Closing net book amount 46 747 100 056 6 613 153 416 At 31 December 2021 Cost 87 205 611 866 57 037 756 108 Accumulated depreciation and impairment (40 458) (511 810) (50 424) (602 692) Net book amount 46 747 100 056 6 613 153 416 Year ended 31 December 2022 Opening net book amount 46 747 100 056 6 613 153 416 Additions 20 860 41 194 3 644 65 698 Depreciation charge (5 799) (28 374) (2 641) (36 814) Closing net book amount 61 808 112 876 7 616 182 300 At 31 December 2022 Cost 108 065 653 060 60 681 821 806 Accumulated depreciation and impairment (46 257) (540 184) (53 065) (639 506) Net book amount 61 808 112 876 7 616 182 300 During 2022, the company incurred in expenditures for the construction of an additional floor to its administrative building located close to its operating activities in Mo i Rana. Other additions mainly relate to the initiative of the company to the acquisition and/or replacement of machinery, and work in progress towards replacement of the tailings pipeline from the factory and investments towards the Fe65 strategic project. In sum the work in progress amounts to NOK 11.8 million. Note 26 discloses information on the amount of property, plant and equipment that are pledged as security for borrowings. RANA GRUBER ANNUAL REPORT 2022142 FINANCIAL STATEMENTS Note 13 Leases 13.1. NATURE OF THE LESSEE’S LEASING ACTIVITIES The company leases most of its production machines including dumper-trucks, excavator, wheeled loaders, rail wagons and other vehicles used in the iron ore extraction and transportation process. The lease term varies normally from one to five years with options to both extend and terminate the lease contracts at the management’s discretion. 13.2. RIGHT-OF-USE ASSETS Amounts in NOK thousand Buildings Machinery Total At 1 January 2021 814 115 0 63 115 877 Year ended 31 December 2021 Additions - 23 150 23 150 Depreciation charge (814) (23 929) (24 743) Closing net book amount - 114 28 4 114 28 4 At 31 December 2021 - 114 28 4 114 28 4 Year ended 31 December 2022 Additions - 54 837 54 837 Depreciation charge - (31 228) (31 228) Closing net book amount - 137 893 137 893 At 31 December 2022 - 137 893 137 893 13.3. LEASE LIABILITIES Amounts in NOK thousand 2022 2021 At 1 January 113 708 118 563 Additions 55 776 23 150 Interest expense 6 547 5 579 Lease payments (39 713) (31 232) Currency effects 1 816 (2 352) Balance at 31 December 138 134 113 708 Current 40 935 31 107 Non-current 97 199 82 601 The following table discloses the maturity analysis for lease liabilities (note 22.2 includes information for other non-derivative financial liabilities): Contractual maturities Amounts in NOK thousand 2022 2021 Less than 1 year 42 213 31 890 1–4 years 84 377 63 844 4–5 years 13 056 15 818 More than 5 years 19 429 24 645 Total contractual cash-flows 159 075 136 196 Recognised as liabilities 138 134 113 708 Information on lease commitments have been included in note 29. RANA GRUBER ANNUAL REPORT 2022 143FINANCIAL STATEMENTS 13.4 AMOUNTS RECOGNISED IN THE STATEMENT OF COMPREHENSIVE INCOME The following amounts have been recognised in the statement of comprehensive income in relation to leases: Amounts in NOK thousand 2022 2021 Interest expense (included in finance cost) 6 547 5 579 Expense relating to short-term and low-value leases 13 321 23 946 Expense relating to depreciation 31 228 24 743 The total cash outflow for leases in 2022 has been NOK 53 034 thousand (2021: NOK 55 177 thousand). Note 14 Other non-current financial assets Amounts in NOK thousand 2022 2021 Other loans - 1 500 Total other non-current financial assets - 1 500 Note 15 Trade receivables Amounts in NOK thousand 2022 2021 Trade receivables subject to provisional pricing mechanism (fair value, see note 19) 148 587 40 736 Trade receivables not subject to provisional pricing mechanism (amortised cost) 30 483 22 531 Loss allowance of trade receivables at amortised cost (400) (180) Total trade receivables 178 670 63 087 More information about trade receivables subject to the provisional pricing mechanism can be found in note 5. 15.1. IMPAIRMENT OF TRADE RECEIVABLES Impairment on trade receivables has historically not been significant for the company. Trade receivables not subject to provisional price mechanisms have been grouped using the number of days past due. The expected credit loss rates used in the provision matrix are calculated using both historical loss rates and forward-looking information: Ageing trade receivables Amounts in NOK thousand 2022 2021 Not due 24 440 14 961 Less than 30 days 1 348 3 216 30-60 days 181 1 457 61-90 days 2 731 669 More than 90 days 1 783 2 229 Total carrying value trade receivables 30 483 22 531 Trade receivables due more than 90 days comprise mainly related parties (see note 27), which are closely followed by the company to detect any decrease in the quality of the receivable. RANA GRUBER ANNUAL REPORT 2022144 FINANCIAL STATEMENTS Note 16 Inventories Amounts in NOK thousand 2022 2021 In-house manufactured finished goods 96 628 52 977 Goods in progress (iron ore stockpiles) 32 589 19 161 Purchased semi-manufactured goods 331 881 Production supplies and spare parts 30 371 16 196 Total inventories 159 919 89 215 Inventories are pledged as security for financial liabilities. See note 26 for additional information. Note 17 Cash and cash equivalents Amounts in NOK thousand 2022 2021 Cash at bank and in hand 212 837 331 750 Bank overdrafts - (67 386) Net cash at bank and in hand 212 837 264 363 Restricted cash 14 218 11 8 90 Unrestricted cash 198 619 252 473 Total cash and cash equivalents 212 837 264 363 17.1. SHORT-TERM DEPOSITS The company does not hold bank deposits or other short-term, liquid investments. Short term deposits and the other short-term, liquid investments considered as cash equivalents meet the criteria set in the accounting policies explained in note 3.6. 17.2. RESTRICTED CASH Part of the cash and cash equivalents disclosed is subject to regulatory restrictions on payroll tax liabilities and is therefore not available for general use by the company. 17.3. BANK OVERDRAFTS Bank overdrafts held at 31 December 2021 mainly related to accounts used for payments in foreign currency (see note 22.3.5). See note 3.6 for information on the accounting policies followed by the company with respect to bank overdrafts. No bank overdrafts were held by the company at 31 December 2022, however the company has not changed its practices with respect to 2021. Note 18 Reconciliation of cash-flows from financing activities Amounts in NOK thousand Borrowings Lease liabilities Total Liabilities from financing activities at 1 January 2021 193 295 118 563 311 858 Financing cash flow (payments) (196 288) (25 653) (221 941) New leases - 23 150 23 150 Foreign exchange adjustments 2 993 (2 352) 641 Liabilities from financing activities at 31 December 2021 - 113 708 113 708 Financing cash flow (payments) - (30 412) (30 412) New leases - 53 029 53 029 Foreign exchange adjustments - 1 816 1 816 Other changes - (7) (7) Liabilities from financing activities at 31 December 2022 - 138 134 138 134 RANA GRUBER ANNUAL REPORT 2022 145FINANCIAL STATEMENTS Note 19 Financial assets and liabilities 19.1. FINANCIAL ASSETS Amounts in NOK thousand 2022 2021 Debt instruments measured at amortised cost: 296 555 325 196 Other current receivables 53 635 36 802 Trade receivables not subject to provisional pricing mechanism (amortised cost) 30 083 22 531 Other non-current financial assets - 1 500 Cash and cash equivalents 212 837 264 363 Debt instruments measured at fair value through profit or loss: 148 587 40 736 Trade receivables subject to provisional pricing mechanism (fair value) 148 587 40 736 Derivatives (measured at fair value through profit or loss): 210 696 103 247 Foreign exchange forward contracts 11 380 - Iron ore forward contracts 58 840 103 247 Electric power forward contracts 140 476 - Total financial assets 655 838 469 179 19.2. FINANCIAL LIABILITIES Amounts in NOK thousand 2022 2021 Liabilities measured at amortised cost 213 784 234 504 Trade payables and other current liabilities (see note 21) 211 519 232 951 Other non-current liabilities 2 265 1 553 Derivatives (measured at fair value through profit or loss): - 7 680 Foreign exchange forward contracts - 7 680 Total financial liabilities 213 784 242 184 19.3. FAIR VALUE HIERARCHY The different fair value measurement levels have the following meaning: ■ Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the company is the current bid price. These instruments are included in level 1. ■ Level 2: The fair value of financial instruments that are not traded in an active market (e.g. over-the counter derivatives) is determined using valuation techniques that maximise the use of observable market data and rely as little as possible on entity- specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. ■ Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities. The following table presents the fair value of those assets and liabilities that are measured at fair value in the financial statements at each reporting date: At 31 December 2022 Amounts in NOK thousand Level 1 Level 2 Level 3 Total Financial assets valued at FVPL: Trade receivables subject to provisional pricing mechanism - 148 587 - 148 587 Derivatives (assets) - 210 696 - 210 696 Total financial assets measured at fair value - 359 283 - 359 283 Financial liabilities valued at FVPL: Derivatives (liabilities) - - - - Total financial liabilities measured at fair value - - - - RANA GRUBER ANNUAL REPORT 2022146 FINANCIAL STATEMENTS At 31 December 2021 Amounts in NOK thousand Level 1 Level 2 Level 3 Total Financial assets valued at FVPL: Trade receivables subject to provisional pricing mechanism - 40 736 - 40 736 Derivatives (assets) - 103 247 - 103 247 Total financial assets measured at fair value - 143 983 - 143 983 Financial liabilities valued at FVPL: Derivatives (liabilities) - (7 680) - (7 680) Total financial liabilities measured at fair value - (7 680) - (7 680) Trade receivables subject to the provisional pricing mechanisms are considered level 2. The fair value of the provisionally priced trade receivables uses the forward prices of iron ore at the stipulated settlement date. This is an observable price with an active market, which is applied to the pricing formula for the agreements. See additional information in note 5. Derivatives are considered level 2. Fair value estimates have been determined based on present value calculations and other commonly used valuation techniques. The company’s derivative instruments are primarily swap contracts where fair value estimates are based on equating the present value of a fixed and a variable stream of cash flows over the maturity of the contract. These estimates are based on observable input related to volatility, discount rates and current market values of the underlying assets the derivative instrument is related to. There were no transfers between levels of fair value measurements during the reporting periods. Fair values of financial instruments not measured at fair value are not materially different to their carrying values. Note 20 Borrowings and credit facilities The company agreed with the lenders to settle all the outstanding borrowings during 2021. There have been no significant differences between the amounts paid for settlements and the carrying value of the borrowings. 20.1. RELEVANT TERMS AND CONDITIONS FOR THE UNDRAWN CREDIT FACILITIES The company’s current borrowing facility includes per the reporting date 31 December 2022 an overdraft credit facility of NOK 100 000 thousand with an interest rate based on the relevant reference rate plus a margin of 3,25 per cent p.a. The overdraft credit facility agreement includes the following quarterly financial covenant for the company: ■ Net interest-bearing debt / EBITDA < 1.5 ■ Equity ratio > 35%, adjusted for unrealised effects from derivative instruments ■ Adverse unrealised effects from derivative instruments < NOK 250 million 20.2. ASSETS PLEDGED AS SECURITIES FOR LIABILITIES The borrowing facility required certain assets to be pledged as security, being accounts receivables, inventory, and property, plant, and equipment. Further information about the amounts and classes of assets pledged is included in note 26. 20.3. COMPLIANCE WITH COVENANTS The company has complied with all the financial covenants during 2022 and 2021, and the management does not expect to breach any covenant in the foreseeable future. RANA GRUBER ANNUAL REPORT 2022 147FINANCIAL STATEMENTS Note 21 Trade payables and other current liabilities Trade payables Amounts in NOK thousand 2022 2021 Trade payables with third parties 103 373 80 030 Trade payables with related parties (see note 27) 57 241 39 085 Total trade payables 160 614 119 115 Other current liabilities Amounts in NOK thousand 2022 2021 Public duties payable 15 379 12 601 Contract liabilities - 78 787 Others 35 526 22 448 Total other curent liabilities 50 905 113 8 36 Trade payables are unsecured and are normally settled within 30 days. The carrying amounts of trade and other payables are considered to be the same as their fair values, due to their short-term nature. Contract liabilities held at 31 December 2021 have been recognised as revenue in the current period. Note 22 Financial risk and capital management In conducting its operations, the company faces the following main types of risks: credit risk, liquidity risk and market risk. For each type of risk identified, this note discloses or cross-references to information about the company’s exposures to the risk, how it arises; the company’s objectives, policies, and processes for managing the risk and the methods used to measure the risk. The company uses derivatives on a recurrent basis to hedge against financial risks, but the company does not apply hedge accounting. 22.1. CREDIT RISK Credit risk is the risk that one party to a financial instrument will cause a financial loss for the company by failing to settle its obligation. The company is exposed to credit risks in conducting its ordinary activities. The credit risk primarily relates to its trade receivables; its cash and cash equivalents; and its derivative financial assets and other receivables related to derivative contracts. 22.1.1. Trade receivables The company is closely following the credit rating of its customers which are regularly monitored. Within days after the iron ore is loaded onto the customer’s vessels, the payment of the provisional invoice is received from the customer. The amount of credit risk related to most iron ore shipments is limited to one shipment per client. A provisional invoice for substantially all of the consideration for the shipment is settled shortly after the shipment date, and no shipment will be made until the provisional invoice has been paid by the customer. The company does not normally hold collateral from its customers. At 31 December 2022, the company had 65 customers (2021: 30 customers). Approximately, its main 5 customers held at 31 December 2022 85 per cent of the company’s trade receivables (2021: 81 per cent). Rana Gruber’s customer base consist of large industrial groups and the credit risk related to trade receivables are considered limited. The management is monitoring the customers’ credit ratings on an ongoing basis. At each reporting date, the company assess the impairment of its trade receivables not subject to the provisional pricing mechanism based on a loss allowance provision matrix. This matrix groups the outstanding amounts by days past due. For more information on how the impairment is done, please see note 15. 22.1.2. Cash and cash equivalents Cash and cash equivalents from the company is managed by the company’s Finance Department. The company limits the amount of deposits that can be held in a single bank to limit the concentration of risks. 22.1.3. Derivative financial assets and related other receivables The company monitors on an ongoing basis the credit rating of the counterparties in its derivative agreements, which is normally large financial institutions with high creditworthiness. The management considers these assets to have a low risk at year-end. Therefore, no impairment has been recognised for receivables arising from derivative instruments; and no adjustment has been made to the fair value of those instruments. See carrying amounts of these in note 23, which constitutes the maximum exposure on these financial assets at the end of each reporting period presented. In the case of the electric power derivatives, these contracts are entered with the electric power supplier, whose credit rating is closely monitored, and the current assessment is that its credit risk is low. Therefore, no adjustment is made to the fair value of the derivatives due to this factor. 22.2. LIQUIDITY RISK Liquidity risk is the risk that the company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. RANA GRUBER ANNUAL REPORT 2022148 FINANCIAL STATEMENTS The company manages its liquidity with a high level of prudency, with rules and policies that ensure an adequate amount of cash and cash equivalents to meet the immediate needs of resources both in the short and long term. Liquidity forecasts are regularly monitored against the contractual maturities or lease liabilities. Shipments of iron ore are normally prepaid for an amount representing the 90 per cent of the provisional invoice within days after the iron ore is loaded onto the customer’s vessels. See note 5.1 for further information. 22.2.1. Maturities The following table discloses the maturity analysis for non-derivative liabilities (except for lease liabilities, which are disclosed in note 13), showing its undiscounted remaining contractual liabilities: At 31 December 2022 Amounts in NOK thousand Carrying amount Less than 3 months 3–12 months 1–5 years Total Trade payables 160 614 160 614 - - 160 614 Other non-current liabilities 2 265 - - 2 265 2 265 Other current liabilities 50 905 50 905 - - 50 905 Total financial liabilities 213 784 211 519 - 2 265 213 784 At 31 December 2021 Amounts in NOK thousand Carrying amount Less than 3 months 3–12 months 1–5 years Total Trade payables 119 115 119 115 - - 119 115 Other non-current liabilities 1 553 - - 1 553 1 553 Other current liabilities 113 836 113 8 36 - - 113 836 Total financial liabilities 234 504 232 951 - 1 553 234 504 The maturities of the derivative financial instruments are included in note 23. 22.2.2. Financing facilities The company has access to undrawn credit facilities for an amount of NOK 100 million at 31 December 2022. The interest rate margin for this credit facility is 3.25 per cent p.a. The funds are available under the current agreement to the extent that the company complies with the relevant financial covenants. 22.3. MARKET RISK Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risks for the company comprise the following types of risk: foreign exchange risk, interest rate risk and iron ore price risk. Trade receivables subject to the provisional pricing mechanism are settled for an amount that mainly depends on the price of iron ore, which can only be observed in the next quarter after the iron ore has been loaded onto the customer’s vessels. It will be paid using the exchange rate of the final invoice date. Therefore, these receivables are affected by both foreign exchange risks and iron ore price risks. 22.3.1. Iron ore price risk Fluctuations in international iron-ore prices pose a risk to future sales prices for Rana Gruber’s products. These prices are extremely volatile, and thereby present a significant risk to profits for the company. The risk related to sales prices for iron concentrates is managed through a combination of physical fixed-price agreements with customers and financial swap agreements where iron ore is sold forward at a fixed price. The swap agreements form part of a hedging portfolio, where limits have been set for how large a share of expected production should be sold forward over and above the volumes hedged directly through fixed-price agreements with customers. 22.3.2. Freight costs risks Under the partnership agreement with Cargill, shipping freight costs are accounted for in line with average market prices for the quarter. Rana Gruber’s contracts are in line with industry standards, which is considered as a prerequisite to compete with global competitors. During 2022, the company has continued to manage its risks with respect to the freight costs. In this respect, Rana Gruber agreed on a fixed freight rate of 35 USD/mt in the first quarter of 2022, in order to ensure visibility in a volatile market. It also ensured, for the period from the fourth quarter of 2022 to the second quarter of 2023, freight rates at 22.5 USD/mt for 300kmt per quarter (900kmt total). Over time, when shipping markets normalise, the transition is expected to increase competitiveness and earnings. The company will however be exposed to price fluctuations in global shipping markets going forward. The implications are variance in the freight deduction to the company’s revenues. Mechanisms exist to secure freight costs in the same way as for iron ore. 22.3.3. Electric power price risk Power is an important factor in iron concentrate production. Fluctuations in electric power prices and in power consumption for production pose a risk to profits at Rana Gruber. The risk related to electric power purchases is managed by a third- party contract provider, which provides active management services to Rana Gruber in order to reduce fluctuations in the spot market of electric power. These contracts are included in a hedging portfolio where limits have been established for how large a proportion RANA GRUBER ANNUAL REPORT 2022 149FINANCIAL STATEMENTS of expected consumption (GWh) at a given future point can be bought forward today. On this basis, the portfolio is bought forward continuously for part of the expected consumption. During 2022, the company has entered into derivative positions with the aim of hedging the company’s exposure to fluctuation in electric power prices. At 31 December 2022, the company also holds derivative positions to manage the electric power price risks for the financial years 2023 and 2024. An overview of the derivative positions entered into are disclosed in note 23.3. The management and the finance department follow up the ongoing risk exposures on the basis of parameters approved by the board of directors. 22. 3.4 . Sensitivities All sensitivity analyses included in this note reflects management’s views on reasonably possible changes in future prices and indices to which the company is exposed. 22.3.5. Foreign exchange risk The company operates in an international market for iron ore and is consequently exposed to foreign exchange risk, primarily US dollar and EUR to NOK fluctuations. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the functional currency of the company. The company mitigates foreign exchange risk by entering into foreign exchange derivative positions based on future forecasted exchanges. The derivatives applied per the reporting date 2022 are foreign exchange rate cap and floor agreements, where the company receives payments at the end of each period if the exchange rates exceed or fall below the agreed strike price The following assets and liabilities are subject to foreign exchange risk, at each reporting period: At 31 December 2022 Amounts in thousand currency USD GBP EUR SEK Financial assets: 20 614 819 20 583 - Trade receivables subject to provisional pricing mechanism 15 074 - - - Trade receivables not subject to provisional pricing mechanism 3 359 122 1 986 - Electric power derivatives (note 23.3) - - 13 361 - Cash and cash equivalents 2 181 697 5 236 - Regular bank account 2 181 697 5 236 - Financial liabilities: (40) - (1 269) (1 417) Trade and other payables (40) (1 269) (1 417) The amount of exposure to DKK became immaterial during 2022 (DKK 9 thousand in regular bank accounts), therefore this currency has not been presented in the table above. At 31 December 2021 Amounts in thousand currency USD GBP EUR DKK Financial assets: (1 922) 1 056 18 975 (182) Trade receivables subject to provisional pricing mechanism 4 619 - - - Trade receivables not subject to provisional pricing mechanism 1 073 749 18 202 - Cash and cash equivalents 1 (7 613) 306 773 (182) Bank overdraft balances (7 613) - - - Regular bank account - 306 773 (182) 1) Cash and cash equivalents is comprised on amounts in bank accounts that are offset with credit facilities in other currencies. Financial liabilities have not been included in the 2021 analysis above due to their immaterial amount. Trade payables in foreign currency at year-end 2021 amounted to NOK 534 thousand. The following table illustrates how the profit before tax would be affected by positive or negative changes in the exchange rates with respect to the functional currency of the company, leaving every other constant the same: Exchange rate sensitivity analysis Impact on profit after tax Amounts in NOK thousand 2022 2021 Increase in EUR/NOK exchange rate of 10% 3 080 1 480 Increase in USD/NOK exchange rate of 10% 1 551 (150) Increase in DKK/NOK exchange rate of 10% 1 (14) Increase in GBP/NOK exchange rate of 10% 168 82 The company enters into derivative agreements to mitigate risk related to changes in the foreign exchange rates. Complementary information can be found in note 23. RANA GRUBER ANNUAL REPORT 2022150 FINANCIAL STATEMENTS 22.3.6. Iron ore price risk As a consequence of the provisional price mechanism, the future cash flows from trade receivables will fluctuate because of changes in market prices for iron ore. The following table summarises the effects that a change of 10 per cent in the market price for iron ore would have on the profit before tax: Iron ore prices sensitivity analysis: Impact on profit after tax Amounts in NOK thousand 2022 2021 Increase/decrease in iron ore price of 10 per cent 11 590 3 177 The company enters into iron ore price derivative agreements to cover risks arising from the change in the iron ore prices. More information can be found in note 23. 22.3.7. Electric power price risk As a consequence of the derivatives in relation to the electric power price, the value of the derivative position will fluctuate based on the movement in the price of electric power in the Nordic region from Nord Pool: Electric power prices sensitivity analysis: Impact on profit after tax Amounts in NOK thousand 2022 2021 Increase/decrease in electric power price of 10 per cent 10 957 - The relationship above represents the change in the fair value of the electric power with from changes in its market price. An increase in the market price of electric power would positively affect the value of the derivative, as the aim of this instrument is to hedge against potential increases in the electric power prices. More information on electric power price derivatives can be found in note 23.3. 22.4. CAPITAL MANAGEMENT: OBJECTIVES, POLICIES, AND PROCESSES The company defines capital as equity, including other reserves. The company’s main objective when managing capital is to ensure the ability of the company to continue as a going concern and to meet all requirements imposed by external financing agreements in the form of covenants. Further, Rana Gruber aims at generating dividend payments to its shareholders based on the company’s dividend policy present at any given time. See note 20.1 for further information on the covenants to which the company is subject to. Note 23 Derivatives 23.1. FOREIGN EXCHANGE RATE DERIVATIVES During 2022, the company held the following positions in relation to derivatives to cover its foreign exchange rate risks: Foreign exchange derivatives by maturity Sell USD (thousand) Floor FX rate (USD/NOK) Cap FX rate (USD/NOK) Fair value (NOK thousand) Maturity within 3 months 33 000 9.48 10.25 (8 831) Maturity within 3 to 6 months 24 000 9.72 10.56 1 334 Maturity within 6 to 9 months 12 000 10.46 11.36 9 355 Maturity within 9 to 12 months 12 000 10.46 11.4 5 9 523 Balances at 31 December 2022 81 000 9.84 10.68 11 380 Foreign exchange derivatives by maturity Sell USD (thousand) Floor FX rate (USD/NOK) Cap FX rate (USD/NOK) Fair value (NOK thousand) Maturity within 3 months 36 000 8.58 9.27 (2 195) Maturity within 3 to 6 months 30 000 8.58 9.38 (2 904) Maturity within 6 to 9 months 6 000 8.52 9.43 (1 285) Maturity within 9 to 12 months 6 000 8.52 9.55 (1 296) Balances at 31 December 2021 78 000 8.57 9.35 (7 680) RANA GRUBER ANNUAL REPORT 2022 151FINANCIAL STATEMENTS 23.2. IRON ORE PRICE DERIVATIVES The company enters into forward swap derivative agreements to manage the risk of changes in iron ore prices by reference to the pricing index TSI Iron Ore CFR China (62% Fe Fines). The following positions were held by the company in relation to the iron ore derivative instruments: Balances at 31 December 2022 Quantity (metric tons) Weighted average fixed price (USD) Fair value (NOK thousand) Derivatives already matured and recognised as other current receivables: 50 000 143.69 18 655 Matured iron ore derivatives 1 50 000 143.69 18 655 Iron ore derivatives recognised as financial assets: 240 000 140.45 58 840 Maturity within 3 months 150 000 137.58 31 510 Maturity within 3 to 6 months 90 000 145.23 27 329 Maturity within 6 to 9 months - - - Maturity within 9 to 12 months - - - Balances at 31 December 2021 Quantity (metric tons) Weighted average fixed price (USD) Fair value (NOK thousand) Derivatives already matured and recognised as other current receivables: 120 000 118.70 17 522 Matured iron ore derivatives 1 120 000 118.70 17 522 Iron ore derivatives recognised as financial assets: 660 000 136.29 103 247 Maturity within 3 months 360 000 133.81 43 278 Maturity within 3 to 6 months 240 000 134.90 37 055 Maturity within 6 to 9 months 30 000 156.75 11 060 Maturity within 9 to 12 months 30 000 156.75 11 8 53 1) Matured iron ore derivatives are accounted for in other current liabilities (see note 21) and other current receivables (see note 19), and are not subject to future fair value changes. 23.3. ELECTRIC POWER PRICE DERIVATIVES The company entered into electric power price derivatives during 2022 with the aim of managing the risk from electric power price fluctuations in the spot market, corresponding with the energy consumption required for the company’s operations. The company manages these fluctuations by entering into forward contracts with reference to the Nord Pool prices (system price) for the expected energy consumption for future periods. The positions held at 31 December 2022 can be summarised as follows: Balances at 31 December 2022 Quantity (MWh) Weighted average fixed price (EUR) Fair value (NOK thousand) Maturity within 3 months 21 590 (87.75) 32 209 Maturity within 3 to 6 months 21 840 (87.75) 26 830 Maturity within 6 to 9 months 22 080 (87.75) 26 223 Maturity within 9 to 12 months 22 090 (87.75) 32 063 Maturity within 12 to 24 months 70 272 26.52 23 151 Balances at 31 December 2022 157 872 (36.89) 140 476 RANA GRUBER ANNUAL REPORT 2022152 FINANCIAL STATEMENTS Note 24 Employee benefit obligations Employee benefit expenses Amounts in NOK thousand 2022 2021 Payroll costs (incl. bonuses) 250 993 231 846 Employer contribution to social security 13 998 12 768 Pension costs 5 578 9 651 Gain (loss) on settlement of defined benefit obligation 811 - Costs from defined contribution plans 14 208 - Other benefits 2 501 4 346 Total employee benefit expenses 288 089 258 611 The loss on settlement arose from the replacement, January 2022, of the company’s defined benefit pension plan with a defined contribution plan. Note 25 Share capital 25.1. SHARE CAPITAL AND SHARE PREMIUM The share capital consists only of Type A shares, with a par value of 0.25 NOK each. All shares are entitled to equal rights with respect to dividends, voting rights and other rights in accordance with Norwegian corporate law. Authorised shares Shares Amounts Amounts in NOK thousand 2022 2021 2022 2021 Fully paid ordinary shares, at 1 January 37 392 000 37 392 000 102 131 102 131 Cancellation ordinary shares (306 908) - (77) - Total shares, share capital and share premium at 31 December 37 085 092 37 392 000 102 054 102 131 The shareholders at Rana Gruber ASA's annual general meeting resolved on 22 March 2022 to reduce the company's share capital by NOK 76 727 from NOK 9 348 000, through cancellation of 306 908 of the company's own shares, each with a nominal value of NOK 0.25. 25.2. TREASURY SHARES Shares Amounts Amounts in NOK thousand 2022 2021 2022 2021 1 January 57 267 - 2 835 - Additions 249 641 202 020 14 163 9 793 Disposals - (14 4 753) - (6 958) Cancellation (306 908) (16 998) - Total treasury shares at 31 December - 57 267 - 2 835 The company acquired treasury shares during the first half of 2022 as part of the company’s buyback program. Treasury shares held by the company were subsequently cancelled in 2022 by the company. Treasury shares are recognised at cost. These are deducted from equity and no gain or loss is recognised on the purchase, sale, issue or cancellation of these shares. RANA GRUBER ANNUAL REPORT 2022 153FINANCIAL STATEMENTS 25.3. DIVIDENDS The following table presents the dividends from the company to its shareholders: Dividends Amounts Amount per share Amounts in NOK thousand 2022 2021 2022 2021 Declared and paid Final dividend for previous year 56 375 27 500 1.51 0.74 Dividend for Q1 result 77 508 108 437 2.09 2.90 Dividend for Q2 result 55 998 14 4 112 1.51 3.86 Dividend for Q3 result 38 940 39 201 1.05 1.05 Extraordinary dividends - 93 337 - 2.50 Total dividends and per share 228 821 412 587 6.16 11.05 The dividend for the fourth quarter of 2021 was approved by the board of directors on 10 February 2022. Therefore, even though this dividend pertains to the 2021 results, the amount has been recognised in 2022. The board of directors decided a dividend of NOK 3.00 per share for 2022, for the results for the fourth quarter of 2022. This dividend was paid around 1 March 2023. 25.4. OVERVIEW OF 20 LARGEST SHAREHOLDERS AT 31 DECEMBER 2022 Shareholders Number of shares Ownership percentage Voting percentage 1. Leonhard Nilsen & Sønner - Eiendom 7 589 265 20.46% 20.46% 2. Morgan Stanley & Co. Int. Plc. 2 607 351 7.03% 7.03% 3. Hi Capital AS 2 224 465 6.00% 6.00% 4. Zolen & Månen AS 1 350 000 3.64% 3.64% 5. Grafo AS 1 202 113 3.24% 3.24% 6. Eidissen Consult AS 1 189 991 3.21% 3.21% 7. A.H. Holding AS 1 168 008 3.15% 3.15% 8. Nordnet Livsforsikring AS 652 114 1.76% 1.76% 9. The Northern Trust Comp, London Br 578 506 1.56% 1.56% 10. Songa Capital AS 502 697 1.36% 1.36% 11. Klevenstern AS 436 690 1.18% 1.18% 12. Mecca Invest AS 436 690 1.18% 1.18% 13. State Street Bank and Trust Comp 344 821 0.93% 0.93% 14. The Bank of New York Mellon SA/NV 276 752 0.75% 0.75% 15. Brown Brothers Harriman & Co. 273 247 0.74% 0.74% 16. The Bank of New York Mellon 241 294 0.65% 0.65% 17. Clearstream Banking S.A. 231 626 0.62% 0.62% 18. Nordnet Bank AB 222 316 0.60% 0.60% 19. Kara Invest AS 204 259 0.55% 0.55% 20. The Bank of New York Mellon 201 100 0.54% 0.54% Total shares 21 933 305 59.14% 59.14% CEO Gunnar Moe held 15 733 shares at the reporting date 31 December 2022. RANA GRUBER ANNUAL REPORT 2022154 FINANCIAL STATEMENTS Note 26 Assets pledged as security The following assets have been pledged as securities in the agreements to obtain the outstanding loans and credit facilities for the company at each reporting period: Carrying amounts of assets pledged as security Amounts in NOK thousand 2022 2021 Current Bank borrowings: Trade receivables 178 670 63 087 Other current receivables 53 635 36 802 Inventories 159 919 89 215 Total current assets pledged as security 392 224 189 104 Non-current Lease agreements: Right-of-use asset 137 893 114 284 Bank borrowings: Mine properties 308 945 303 768 Machinery and plants 112 876 100 056 Operating equipment etc. 7 616 6 613 Total non-current assets pledged as security 567 330 524 721 Total assets pledged as security 959 554 713 825 Note 27 Related parties 27.1. KEY MANAGEMENT PERSONNEL COMPENSATION Remuneration to CEO and other senior executive Amounts in NOK thousand 2022 2021 Gunnar Moe, chief executive officer (CEO) 3 725 4 268 Salary 2 861 2 982 Bonus 765 625 Post-employment benefits 83 22 Other benefits 16 639 Stein Tore Liljenström, chief operation officer (COO) 2 472 2 736 Salary 1 835 1 752 Bonus 527 425 Post-employment benefits 106 130 Other benefits 4 429 Anita Brattaas Mikalsen, HR director 2 342 1 755 Salary 1 748 1 533 Bonus 468 - Post-employment benefits 120 218 Other benefits 6 4 Erlend Høyen, chief financial officer (CFO) 2 361 2 463 Salary 1 746 1 551 Bonus 468 375 Post-employment benefits 91 158 Other benefits 56 379 Total 10 900 11 222 RANA GRUBER ANNUAL REPORT 2022 155FINANCIAL STATEMENTS Remuneration to the board Amounts in NOK thousand 2022 2021 Morten Støver, chair of the board 600 488 Kristian Arne Adolfsen, director 400 315 Ragnhild Marta Wiborg, director 400 300 Hilde Rolandsen, director and member of the audit committee 400 300 Thomas Hammer, director and worker director 100 90 Frode Michal Nilsen, director 400 300 Johan Hovind, club leader and worker director 100 90 Lasse Orlando Strøm, deputy club leader, and worker director 100 90 Total 2 500 1 973 27.2. TRANSACTIONS WITH OTHER RELATED PARTIES Transactions with related parties Amounts in NOK thousand Party Relationship 2022 2021 Purchase of services open-pit production Leonhard Nilsen & Sønner AS Significant influence over the company (141 876) (167 380) Purchase of services concerning mine levels Leonhard Nilsen & Sønner AS Significant influence over the company (79 616) (27 766) Sales of various operations and maintenance services Leonhard Nilsen & Sønner AS Significant influence over the company 458 508 Sales of various administrative services Greenland Ruby/LNS Greenland AS Significant influence over the company 518 1 636 Sales of various administrative services LNS Mining AS Other related parties 2 472 2 400 Total related party profit or loss items (218 044) (190 602) 27.3. BALANCES WITH RELATED PARTIES Balance sheet items by related party 2022 2021 Trade receivables with: 2 987 2 534 Leonh. Nilsen & Sønner AS 77 149 LNS Mining 2 318 750 LNS Greenland/Gr. Ruby 592 1 636 Trade payables with: (57 241) (39 085) Leonh. Nilsen & Sønner AS (57 241) (39 085) Net assets (liabilities) with: (54 254) (36 550) Leonh. Nilsen & Sønner AS (57 164) (38 936) LNS Mining 2 318 750 LNS Greenland/Gr. Ruby 592 1 636 No loss allowance has been recognised towards any of the receivables and/or loans from related parties. See note 22.1 on how the company manages credit risk. Note 28 Provisions During the development and production phase of the company’s mining assets, Rana Gruber recognises a provision representing the present value of the future costs that will need to be incurred to rehabilitate the locations, as required by the Norwegian Directorate of Mining. When the obligation is incurred in developing the mine, the present value of the provision is included in the cost of the mine properties. When the provision is incurred during the production phase, the provision is recognised as part of the cost of the inventory. The present value of the rehabilitation provision is calculated assuming the costs that are expected to be incurred when the company ceases operations in the mine. With a very high degree of certainty, the mine will not cease its operations before 2050. This RANA GRUBER ANNUAL REPORT 2022156 FINANCIAL STATEMENTS conclusion is based on the historical extraction of iron ore and the estimated reserves of the mine indicated in the resource statement made by the company. As indicated above, the measurement of the provision is based on two main estimations: expenses that will need to be incurred for rehabilitating the locations and the date when the rehabilitation activities will take place. Changes in estimates are accounted for prospectively by adjusting the provision liabilities and the assets to which they relate. Rehabilitation provisions Amounts in NOK thousand 2022 2021 1 January 15 000 15 000 Total rehabilitation provisions 31 December 15 000 15 000 There have been no movements in the rehabilitation provisions during 2022, as rehabilitation provisions only relate to activities performed during the development phase of the mine properties. Note 29 Commitments The following significant contractual commitments are present at the end of the reporting period: Capital commitments Amounts in NOK thousand 2022 2021 Property, plant, and equipment 5 945 - Leases 67 218 16 459 Total capital commitments 73 163 16 459 During 2022, Rana Gruber entered a contract with Leonhard Nilsen & Sønner AS (LNS), which is a related party to the company (see note 27 for further information), for the first phase of development of the next mining level (L91). As described in note 11, they started the work in the second quarter of 2022. The contract includes development of access tunnels and infrastructure needed to develop level 91 for the Kvannevann underground mine in the Ørtfjell area, where the production is expected to commence in 2024. Infrastructure development includes both areas for maintenance and water and ventilation handling solutions. Leases not yet commenced mainly relate to heavy machinery to be used in the mine operations, and the expected cash outflows during the non-cancellable periods are typically five years after the commencement date. Note 30 Critical judgements and estimates The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. The management also needs to exercise judgement in applying the company’s accounting policies. This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different when, and to the extent that, uncertainty is resolved. Detailed information about each of these estimates and judgements is included in other notes together with information about the basis of calculation for each affected line item in the financial statements. 30.1. CRITICAL ESTIMATES 30.1.1. Sales of hematite Customer contracts for hematite iron ore (Fe 2 O 3 ) are subject to provisional pricing mechanisms where the final settlement for the delivery will be based on future iron ore prices. Further information on the use of forward prices for the initial revenue recognition and subsequent measurement of the corresponding trade receivables is disclosed in note 5.1. 30.1.2. Depreciation of mine properties The company’s assessment of the useful life of mine properties is determined by the expected useful economic life of the assets based on management’s judgement. The useful life of mine properties is based on the estimated detonations that are expected to be economically and technically feasible to be made in coming reporting periods. These estimates are based on geological surveys, past operational history and assumption on future market prices, and could change depending on technical innovations, ore prices, production costs or updated geological analysis. Any significant deviation between actual and estimated useful lives could have a material effect on the financial statements. Please see note 3.14 for further disclosures. RANA GRUBER ANNUAL REPORT 2022 157FINANCIAL STATEMENTS 30.1.3. Fair value of financial derivatives The company uses currency, iron ore, and electric power price swap contracts to manage the company’s risk exposure to certain market fluctuations. The financial derivatives are measured at fair value in the company’s statement of financial position. The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The company uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period. See note 19 and note 23 for further information on the valuation of the company’s financial derivatives. 30.1.4. Useful life of fossil-fuel powered machinery The company has expressed plans to become the world’s first producer of iron ore completely free of CO 2 emissions by the end of 2025, and to achieve this ambition, a renewal of the existing fleet of production machinery and operation vehicles must be done over the next three years. The operational machineries and vehicles used for the production of iron ore are primarily leased and are presented within the financial statement line Right-of-use assets on the statement of financial position per the reporting date 2022. The management has concluded that most lease contracts for production machineries and vehicles powered by fossil fuel contain termination clauses (to terminate the existing lease contract, or to terminate the contract if a new lease contract for similar electrically powered assets is entered into with the lessor). When the management in the future has concluded that it is reasonably certain that these termination clauses will be used, a remeasurement of the right-of-use assets and the corresponding lease liability will be done. 30.2. JUDGEMENTS IN APPLYING THE COMPANY'S ACCOUNTING POLICIES Accounting estimates made by the company’s management are based on information available to management at the time each estimate is made. Accordingly, actual outcomes may differ materially from current expectations under different assumptions and conditions. The significant judgements that management has made in applying its accounting policies, and the estimates and assumptions for which there is a significant risk of a material adjustment to the financial statements within the next financial year are set out below. 30.2.1. Functional currency The functional currency for the company is the currency of the primary economic environment in which it operates. The functional currency of the company is the Norwegian Kroner. The determination of functional currency may involve certain judgements to identify the primary economic environment and the management reconsiders the functional currency of the company if there is a change in events and conditions which can determine the primary economic environment assessment. In the case of the company, even though the currency that mainly influences sales prices for iron ore is USD, Norwegian Kroner is the currency cash outflows and financing activities are nominated in; and the currency in which receipts from operating activities are usually retained. The management has thus determined that Norwegian Kroner is supported in sum by a stronger set of indicators. 30.2.2. Exploration and evaluation activities The application of the company’s accounting policy for E&E expenditure requires judgement to determine whether future economic benefits are likely, or determining whether the technical feasibility and commercial viability of extracting a mineral resource are demonstrable. Please see note 3.13 for further disclosures. 30.2.3. Lease term In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). The assessment on extension and termination options includes the factor of whether the underlying assets are in alignment with the company’s strategy to electrify its mining operations by the end of 2025. However, this is expected to take place in accordance with the agreed lease terms, and therefore the company does not expect to incur into any significant termination penalties from its leases. For leases of production machines and vehicle the historical lease durations, the technical condition of the leased items and the costs required to replace the leased asset are normally the most relevant factors when determining the use of extension and termination options. Please see note 3.4 and note 13 for further disclosures. 30 .2. 4 . Stri pping c ost s Significant judgement is required to distinguish between development stripping and production stripping and to distinguish between the production stripping that relates to the extraction of inventory and that which relates to the creation of stripping activity assets. Once the company has identified its production stripping for each surface mining operation, it identifies the separate components of the ore bodies for each of its mining operations. An identifiable component is a specific volume of the ore body that is made more accessible by the stripping activity. Significant judgement is required to identify and define these components, and to determine the expected volumes of waste to be stripped and ore to be mined in each of these components. Please see note 3.14 for further disclosures. 30.2.5. Uncertain tax positions The management periodically evaluates the positions taken and interpretations with respect to its tax filings. As explained in note 9.2.3, the management has evaluated the probability that the tax authorities will accept the tax treatment of its revenue. 30.2.6. Electric power price derivatives Previously the electric power derivatives have been treated under the own use exemption of IFRS 9, and accounted for as a fixed price electric power delivery with no separation of the embedded derivative. In 2022, there has been significant differences between the system price that has been hedged and the area price that has been paid. As a result of this, the criteria for own use exemption is no longer met, as the pricing in fact has not been fixed. Since these variances are expected to continue going forward, the company has concluded that the derivatives are no longer sufficiently linked to the physical delivery of electric power and therefore should be accounted for as separate derivatives at fair value through profit and loss. RANA GRUBER ANNUAL REPORT 2022158 FINANCIAL STATEMENTS Note 31 Events after the reporting period See note 25.3 for dividends proposed by the board of directors after 31 December 2022. The board of directors is not aware of any other events that occurred after the balance sheet date, or any new information regarding existing matters, that can have a material effect on the 2022 financial statements for the company. The company has secured forward contracts under which Rana Gruber will sell 450 000 mt in the second quarter of 2023 to the first quarter of 2024 at an average price of USD 121.47/mt. These swap contracts relate to physical shipments in the first quarter of 2023 to the fourth quarter of 2023. Final financial settlement of these shipments will be connected with the swap contracts. Appendix: Alternative performance measures The company reports its financial results in accordance with accounting principles IFRS as issued by the IASB and as endorsed by the EU. However, the management believes that certain alternative performance measures (APMs) provide the management and other users with additional meaningful financial information that should be considered when assessing the company’s ongoing performance. These APMs are non-IFRS financial measures and should not be viewed as a substitute for any IFRS financial measure. The management, the board of directors and the long-term lenders regularly use supplemental APMs to understand, manage, and evaluate the business and its operations. These APMs are among the factors used in planning for and forecasting future periods, including assessment of financial covenants compliance. DEFINITION OF APMS EBIT is defined as the profit/(loss) for the period before net financial income (expenses) and income tax expense. The company has elected to present this APM because it considers it to be an important supplemental measure for prospective investors to understand the overall picture of the profit generation in the company’s operating activities. EBITDA is defined as the profit/(loss) for the period before net financial income (expenses), income tax expense, depreciation and amortisation. The company has presented this APM because it considers it to be an important supplemental measure for prospective investors to understand the overall picture of the profit generation in the company’s operating activities. EBIT margin is defined as EBIT in percentage of revenues. The company has presented this APM because it considers it to be an important supplemental measure for prospective investors to understand the overall picture of the profit generation in the company’s operating activities. EBITDA margin is defined as EBITDA in percentage of revenues. The company has presented this APM because it considers it to be an important supplemental measure for prospective investors to understand the overall picture of the profit generation in the company’s operating activities. Adjusted net profit is defined as profit for the period adjusted for the after-tax net effects from unrealised fair value changes on derivatives with maturity within three months from the reporting date. Equity Ratio is defined as total equity in percentage of total assets. The ratio has presented this APM because it considers it to be an important supplemental measure for prospective investors to understand the portion of total assets that are financed from owners’ equity. Cash cost is defined as the sum of raw materials and consumables used, employee benefit expenses and other operating expenses adjusted for realised hedging positions of electric power. The company has presented this APM because it considers it to be an important supplemental measure for prospective investors to understand the overall picture of cost of production in the company’s operating activities. Cash cost per metric ton is defined as cash cost divided by metric tons of iron ore sold. Metric tons of iron ore are defined as metric tons of hematite and magnetite produced in the current period. The company has presented this APM because it considers it to be an important supplemental measure for prospective investors to understand the overall picture of cost of production in the company’s operating activities. Net interest-bearing debt is defined as the company's interest-bearing debt less cash and cash equivalents. Interest bearing debt consists of debt to credit institutions and financial leasing debt. Net Interest- bearing debt is a non-IFRS measure for the financial leverage of the company, a financial APM the company intends to apply in relation to its capacity for dividend distribution and/or for doing investments, when and if the company will be able to carry out its dividend distribution and/or investments policy. RANA GRUBER ANNUAL REPORT 2022 159FINANCIAL STATEMENTS RECONCILIATION OF APMS The table below sets forth reconciliation of EBIT, EBITDA, and EBITDA margin: Amounts in NOK thousand 31 Dec 2022 31 Dec 2021 Profit/(loss) for the year 484 226 592 048 Income tax expense 152 636 167 697 Net financial income/(expenses) (228 408) 3 343 (a) EBIT 408 454 763 088 Depreciation and amortisation 158 736 174 247 (b) EBITDA 567 190 937 335 (c) Revenues 1 423 319 1 668 429 EBIT margin (a/c) 28.7% 45.7% EBITDA margin (b/c) 39.8% 56.2% The table below sets forth reconciliation of adjusted net profit: (In NOK thousand) 31 Dec 2022 31 Dec 2021 Profit before tax for the period 636 862 759 745 One-offs 15 000 - Unrealised hedging positions iron ore 32 634 (157 613) Unrealised hedging positions FX (25 697) 38 917 Unrealised hedging positions electric power (140 476) - Adjusted profit before tax 518 323 641 049 Ordinary income tax (152 636) (167 697) Tax on adjustments 26 079 26 113 Adjusted net profit 391 765 499 465 The table below sets forth reconciliation of equity ratio: Amounts in NOK thousand 31 Dec 2022 31 Dec 2021 (a) Total equity 823 053 581 811 (b) Total assets 1 445 046 1 129 682 Equity ratio (a/b) 57.0% 51.5% The table below sets forth reconciliation of cash cost and cash cost per metric tons: Amounts in NOK thousand 31 Dec 2022 31 Dec 2021 Raw materials and consumables used 398 305 327 567 Employee benefit expenses 288 089 258 611 Other operating expenses 226 763 189 106 Realised hedging positions electric power (77 292) - (a) Cash cost 835 865 775 284 Metric tons of hematite produced 1 630 1 545 Metric tons of magnetite produced 98 108 Metric tons of Colorana produced 6 5 (b) Metric tons of iron ore produced 1 734 1 658 Cash cost per metric tons (a/b) 482 468 RANA GRUBER ANNUAL REPORT 2022160 FINANCIAL STATEMENTS The table below sets forth reconciliation of net interest-bearing debt: Amounts in NOK thousand 31 Dec 2022 31 Dec 2021 Lease liabilities 138 134 113 708 Total interest-bearing debt 138 134 113 708 Cash and cash equivalents 212 837 264 363 Net interest-bearing debt (74 703) (150 655) RANA GRUBER ANNUAL REPORT 2022 161FINANCIAL STATEMENTS Statsautoriserte revisorer Ernst & Young AS Dronning Eufemias gate 6a, 0191 Oslo Postboks 1156 Sentrum, 0107 Oslo Foretaksregisteret: NO 976 389 387 MVA Tlf: +47 24 00 24 00 www.ey.no Medlemmer av Den norske Revisorforening A member firm of Ernst & Young Global Limited INDEPENDENT AUDITOR'S REPORT To the Annual Shareholders' Meeting of Rana Gruber ASA Opinion We have audited the financial statements of Rana Gruber ASA (the Company), which comprise the statement of financial position as at 31 December 2022, the statement of comprehensive income, statement of cash flows and statement of changes in equity for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the financial statements comply with applicable legal requirements and give a true and fair view of the financial position of the Company as at 31 December 2022 and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU. Our opinion is consistent with our additional report to the audit committee. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the requirements of the relevant laws and regulations in Norway and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided. We have been the auditor of the Company for 15 years from the election by the general meeting of the shareholders on for the accounting year 2008. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for 2022. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For the matter below, our description of how our audit addressed the matter is provided in that context. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial statements section of our report, including in relation to this matter. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matter below, provide the basis for our audit opinion on the financial statements. Revenue subject to provisional pricing adjustments Basis for the key audit matter The sale of hematite, representing 87.4 % of Our audit response We performed the following audit procedures, Penneo document key: HSUXT-7F3B4-ZZW4V-1TIVF-IH6E4-DVSOC AUDITOR’S REPORT RANA GRUBER ANNUAL REPORT 2022162 FINANCIAL STATEMENTS 2 Independent auditor's report - Rana Gruber ASA 2022 A member firm of Ernst & Young Global Limited revenue, is normally subject to a provisional pricing mechanism. Initially, revenue is recognized at the shipment date for an amount that corresponds to the average forward prices for the month in which the invoice will be finally settled. At each subsequent reporting date, the corresponding trade receivable is measured using the updated forward prices with changes recorded to revenue. For the year ended 31 December 2022, the Company recognized a decrease to revenue of NOK 61.7 millions from provisional pricing adjustments. Provisional pricing adjustments represent a significant component of revenue and also exposes the Company to significant changes in revenue compared to the estimate as of year-end, and hence, is considered a key audit matter. among others, to test the provisional pricing adjustment related to sale of Hermatite: • Reviewed the Company’s accounting policy for revenue recognition for compliance with IFRS as adopted by the EU. • Performed walkthrough for evaluating the Company’s controls for recognizing revenues at appropriate prices and in the correct accounting period. • Reviewed sale contracts and assessed key terms for provisional pricing, duration of reference period, typically three months, and final invoicing. • Tested, on a sample basis, the prices used for initial revenue recognition, the forward prices used for recognizing the revenue at the reporting date under IFRS, and recomputed the provisional pricing adjustment amount to be recognised. We refer to note 5 and 15 of the financial statements. Other information Other information consists of the information included in the annual report other than the financial statements and our auditor’s report thereon. Management (the board of directors and the Chief Executive Officer) is responsible for the other information. Our opinion on the financial statements does not cover the other information, and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information, and, in doing so, consider whether the board of directors’ report, the statement on corporate governance, the statement on corporate social responsibility and the report on payments to government contain the information required by applicable legal requirements and whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information or that the information required by applicable legal requirements is not included, we are required to report that fact. We have nothing to report in this regard, and in our opinion, the board of directors’ report, the statement on corporate governance, the statement on corporate social responsibility and the report on payments to government are consistent with the financial statements and contain the information required by applicable legal requirements. Responsibilities of management for the financial statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards as adopted by the EU, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Penneo document key: HSUXT-7F3B4-ZZW4V-1TIVF-IH6E4-DVSOC RANA GRUBER ANNUAL REPORT 2022 163FINANCIAL STATEMENTS 3 Independent auditor's report - Rana Gruber ASA 2022 A member firm of Ernst & Young Global Limited In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with the board of directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the audit committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the board of directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Penneo document key: HSUXT-7F3B4-ZZW4V-1TIVF-IH6E4-DVSOC RANA GRUBER ANNUAL REPORT 2022164 FINANCIAL STATEMENTS 4 Independent auditor's report - Rana Gruber ASA 2022 A member firm of Ernst & Young Global Limited Report on other legal and regulatory requirement Report on compliance with requirement on European Single Electronic Format (ESEF) Opinion As part of the audit of the financial statements of Rana Gruber ASA we have performed an assurance engagement to obtain reasonable assurance about whether the financial statements included in the annual report, with the file name RGASA-2022-12-31-en.xhtml, have been prepared, in all material respects, in compliance with the requirements of the Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation pursuant to Section 5-5 of the Norwegian Securities Trading Act, which includes requirements related to the preparation of the annual report in XHTML format. In our opinion, the financial statements, included in the annual report, have been prepared, in all material respects, in compliance with the ESEF Regulation. Management’s responsibilities Management is responsible for the preparation of the annual report in compliance with the ESEF Regulation. This responsibility comprises an adequate process and such internal control as management determines is necessary. Auditor’s responsibilities Our responsibility, based on audit evidence obtained, is to express an opinion on whether, in all material respects, the financial statements included in the annual report have been prepared in accordance with the ESEF Regulation. We conduct our work in accordance with the International Standard for Assurance Engagements (ISAE) 3000 – “Assurance engagements other than audits or reviews of historical financial information”. The standard requires us to plan and perform procedures to obtain reasonable assurance about whether the financial statements included in the annual report have been prepared in accordance with the ESEF Regulation. As part of our work, we perform procedures to obtain an understanding of the company’s processes for preparing the financial statements in accordance with the ESEF Regulation. We test whether the financial statements are presented in XHTML-format. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Oslo, 15 March 2023 ERNST & YOUNG AS The auditor's report is signed electronically Johan Lid Nordby State Authorised Public Accountant (Norway) Penneo document key: HSUXT-7F3B4-ZZW4V-1TIVF-IH6E4-DVSOC RANA GRUBER ANNUAL REPORT 2022 165FINANCIAL STATEMENTS This document is digitally signed using Penneo.com. The digital signature data within the document is secured and validated by the computed hash value of the original document. The document is locked and timestamped with a certificate from a trusted third party. All cryptographic evidence is embedded within this PDF, for future validation if necessary. How to verify the originality of this document This document is protected by an Adobe CDS certificate. When you open the document in Adobe Reader, you should see, that the document is certified by Penneo e-signature service penneo@penneo.com. This guarantees that the contents of the document have not been changed. You can verify the cryptographic evidence within this document using the Penneo validator, which can be found at https://penneo.com/validator The signatures in this document are legally binding. The document is signed using Penneo™ secure digital signature. The identity of the signers has been recorded, and are listed below. “By my signature I confirm all dates and content in this document.” J J o o h h a a n n N N o o r r d d b b y y S S t t a a t t s s a a u u t t o o r r i i s s e e r r t t r r e e v v i i s s o o r r Serial number: 9578-5997-4-729076 IP: 88.89.xxx.xxx 2023-03-15 12:33:14 UTC Penneo document key: HSUXT-7F3B4-ZZW4V-1TIVF-IH6E4-DVSOC RANA GRUBER ANNUAL REPORT 2022166 FINANCIAL STATEMENTS 167 Rana Gruber ASA Postal address: P.O. box 434 NO-8601 Mo NORWAY Visitor address – Mo i Rana: Rana Gruber ASA Mjølanveien 29 NO-8622 Mo i Rana NORWAY ranagruber.no

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