South32 Limited

Thank you and good morning everyone and thanks for joining us today. On the call with me today we have our Chief Financial Officer Katie Tovich and our Chief Operating Officers Noel Pillay and JC Economides. I'll give you a short summary of our results before handing back to the operator for questions. Firstly and most importantly, we will never be truly successful until every single one of our people goes home safe and well. It is a deep sadness that we did not achieve this during the period. We've all felt the devastating loss of two of our teammates, Tonello and Alfredo, at Moselle Aluminium in November and we continue to do everything we can to support their families, friends and immediate colleagues who remain in our thoughts. We are sharing learnings from this incident across our organisation and with the broader industry and also undertaking a significant amount of work to improve our safety performance. Turning to our results. This half, we realised the benefit of our portfolio improvements that have increased our exposure to commodities critical for a low-carbon future. We increased production by 12% with the addition of the Cerro Gordo copper mine and our expanded low-carbon aluminium capacity through our increased ownership of Moselle aluminium and the restart of the Brazil aluminium smelter. And our teams around the world deliver a number of strong operating results, including record production at Jemco. Hillside Aluminium and Moselle Aluminium continued to test their maximum technical capacity. Operating unit costs were below or in line with guidance of the majority of our operations and we recorded one of our largest profit results with underlying EBITDA of US$1.36 billion despite commodity prices declining from record levels in the prior period. This has enabled us to announce an in-term fully franked ordinary dividend $224 million or 4.9 US cents per share in respect to the December 2022 half year. We have also increased our flexible capital management program by $50 million to $2.3 billion, leaving $158 million to be returned by the 1st of September this year. Looking ahead, we expect to increase production a further 6% in the second half of the 2023 financial year, and operating unit cost guidance has been reduced or held in line with the majority of our operations. Along with the strengthening commodity prices, the outlook for margins is positive, and we will continue to reward shareholders as our financial performance improves. We continue to invest in high-returning projects to improve productivity and unlock volumes, and we have a portfolio of high-quality growth options in the Americas to underpin our next phase of growth and value creation. At our Hermosa project in Arizona, the feasibility study for the Taylor zinc-lead silver deposit remains on track to support a final investment decision in mid-calendar year 2023. While our milestones at Clark included completing the selection phase pre-feasibility study and entering our first MOU with NEMUSA to establish a framework for supplying battery-grade manganese into the North American market. Finally today, we announced changes to our lead team that will take effect from the 1st of April. Katie Kovic will be appointed to the role of Chief Human Resources and Commercial Officer and our Vice President of Finance, Sandy Savania, will be appointed to Chief Financial Officer. Katie has been an outstanding Chief Financial Officer and her extensive marketing and commercial experience means she is well placed to excel in her new role and Sandy brings more than 20 years of treasury, finance and commercial experience to the CFO role and will continue to deliver on our disciplined approach to capital management. Thank you, and I'll now hand back to the operator for questions.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Paul Young from Goldman Sachs. Please go ahead.

Morning, Graeme and Katie. Hope you're well. Graeme, first question's on CapEx and, you know, just noting that you've reduced your CapEx guidance, but looks like a lot of that's just shuffling into next year around timing, et cetera. But question's actually on CapEx inflation, what you're seeing across some of your growth projects with studies, and probably just call out Trilogy Metals, you know, 30%, 40% CapEx increase on the Arctic side. with their updated feasibility study. Now, part of that might be the fact that maybe the prior estimate was a little bit outdated. But just curious to see... I'll ask you, I should say, or your views on, are you seeing that sort of... those sorts of types of inflation coming through on some of your growth projects?