Highfield Resources : Sustainability Report 2022

Sustainability Report 2022

Contents

CEO Letter

About this Report

ESG Focus

Planning

Our Company

Unflagging commitment with our community

Caring for the Environment

Caring for Our People

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Highfield Resources | Sustainability Report 2022

CEO Letter

Dear Readers,

It is with great satisfaction that I report we have finished the preliminary works for the construction of the Muga Mine in Aragón with zero accidents and zero environmental incidents. We are now ready to continue the construction works in Navarra. In this construction phase, more than 1,000 jobs will be created, and hundreds of opportunities will be generated for suppliers. This is an exciting time for Muga, not only because it is a long-term project that will boost the economy in this region, but also because Europe has been exposed to a situation of total dependence on foreign raw materials evidencing that Muga will be a strategic producer of European potash when it comes on line. Stakeholders ranging from local communities to Spanish and European institutions, perceive the Muga project as an opportunity to address this geopolitical and economic situation, further augumenting the reasons to support an already strong project.

Muga is also a strategic project in the international landscape, particularly as a European producer which aims to be a zero residue mine which will operate an optimised process in both water and energy consumption. This is our eighth Sustainability Report and it highlights those key activities which are ensuring that sustainability is at the core of our business.

This year we will continue diligently building our relationship with the local communities. In June 2022 the Government of Navarra launched the Muga Community initiative which is a partnership between the Company, Governments, and local communities to boost the socioeconomic potential of our mining project in the region. This initiative is a pioneer in social innovation and demonstrates the high level of interest afforded to the Project from the surrounding communities. This initiative has received great support from the Government, which is acting as a coordinator whilst allocating funding for social projects that will help newcomers - which includes our future employees - settle in this significantly depopulated region.

2022 saw us advancing our financing strategy which included a due diligence process with a comprehensive focus on the ESG thematic. The success in achieving all the financing milestones which resulted in a €320.6 million Senior Secured Project Financing demonstrates that Muga is a solid and robust Project with a compelling value proposition.

The Ukraine war, now in its second year has raised the awareness of the strategic importance of raw materials and their security. Europe depends on Russia and Belarus for 60% of its potash. The European extractive industry plays a strategic role as a supplier and Europe is currently reviewing its legislation to enhance self-supply. Our potash is therefore expected to be highly sought after. As a project which is benefiting from positive long- term fundamentals as well as being in a safe region and close to premium markets, our potash is expected to be in strong demand. But more importantly, potash, as a fertiliser component, contributes positively to food security, an urgent priority matter raised by the UN in the Sustainable Agenda 2030.

We are at the right place and at the right time. Join me in this exciting journey of building not only the next European potash mine but one which supports modern and sustainable principles.

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Highfield Resources | Sustainability Report 2022

Highfield Resources CEO, Mr. Salazar, said: "In this time of heightened geopolitical instability around potash supply, especially in Europe, we have begun the construction of Muga Mine. Our project's ESG credentials make it a mine at the forefront of sustainability with significant endorsement of stakeholders."

Ignacio Salazar

CEO and Managing Director

30 March 2023

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About this Report

This report highlights all ESG activities carried out during 2022 by Highfield Resources Limited (the "Company" or "Highfield") and its Spanish subsidiary Geoalcali SLU ("Geoalcali"), together "the Group".

This report has been prepared in accordance with the GRI Standards: Core option. GRI is an international independent organisation that helps businesses, governments and other organizations understand and communicate the impact of business on critical sustainability issues such as climate change, human rights, corruption and many others. Additionally, as a signatory member to the United Nations Global Compact, this report also sets out the information required by the Communication on Progress guidelines of Global Compact reporting initiative.

The Group is committed to adopting sustainable practices and is carrying out a number of actions to align its processes and policies to international guidelines as part of its strategy to build a resilient and robust project. The Group remains supportive of the Sustainable Development Goals (SDGs), which seek to encourage measures to build a sustainable world. We continue to work towards this vision by committing to implement a large project with integrated initiatives that contribute to those objectives, with special emphasis on our social and natural environment. At the same time, the report highlights our performance in other relevant areas included in what we have defined our Sustainability Framework: Our Business, Our Environment, Our People, and Our Community.

For further information visit:

https://www.highfieldresources.com.au/sustainability-reports/

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Highfield Resources | Sustainability Report 2022