Minergy : 2022 INTEGRATED ANNUAL REPORT

Integrated Annual Report

2022

Minergy  Integrated Annual Report 2022

Contents

Coal mining | Beneficiation | Trading

01		05
Group overview	03		Group annual financial statements	54
About Minergy	04		Directors' responsibilities and approval	55
Highlights of the year	05		Directors' report	56
Milestones and successes	06		Independent auditors' report	59
Understanding the role of coal	07		Statements of financial position	61
Business model and sales strategy	09		Statements of comprehensive income	61
Mine attributes, location and infrastructure	10		Statements of changes in equity	62
Risk management	14		Statements of cash flows	62
02			Notes to the annual financial statements	63
	06
Leadership feedback	17
			Shareholder information and
Chairman's report	18
	Notice of Annual General Meeting	88
Chief Executive Officer's report	20
Acting Chief Financial Officer's report	23		Interaction with shareholders	89
03			Shareholders' diary	89
		Shareholder analysis	90
		Notice of Annual General Meeting	91
Coal resource and reserve information	25		Form of proxy	93
			Minergy King IV™ summary 2022	95
Mining licence	25
	Corporate and general information	96
Coal resource and reserve	26
04
Approach to environment,
social and governance ("ESG")
to support sustainability	28
Sustainable development goals	29
Carbon emissions	30
Environment	31
Social	33
Corporate social investments
and community support	37
Social and Ethics Committee report	39
Stakeholder engagement	40
Board of Directors	43
Corporate Governance report	45
Remuneration and Nomination Committee report	49
Audit and Risk Committee report	52

01

Contents

Minergy  Integrated Annual Report 2022

About this report

02

Report objective

Minergy Limited's 2022 Integrated Annual Report aims to provide a balanced, transparent, understandable and complete view

of our business by reporting on both the financial performance and non-financial aspects of the Group. The aim is to provide stakeholders with insight into our ability to create value over the short, medium, and long term. The report outlines the Group's strategy and business model, operating environment, positions the coal story, and explains our approach to risk management, and governance. It also contains the consolidated annual financial statements of Minergy for the financial year ending 30 June 2022 and the notice of the Annual General Meeting ("AGM").

The 2022 Integrated Annual Report (referred to herein as the "report", "IAR", or Integrated Annual Report) further covers a review of the Group as it pertains to the Masama Coal Mine and the status of saleable coal production, future developments, who our stakeholders are and how we interact with them, an extract from the Competent Persons Report ("CPR"), aspects about the Group's environment,

accordance with The South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves 2016 Edition ("SAMREC CODE");

• the annual financial statements are prepared and presented
  in accordance with International Financial Reporting Standards ("IFRS") and in accordance with the laws of Botswana; and
• the United Nations Social Development Goals ("UNSDGs"). Minergy has assessed applicable conformity to the following SDGs:

Board approval

The Board acknowledges responsibility for ensuring the integrity of this Integrated Annual Report. Following collective assessment, the Audit and Risk Committee, responsible for oversight of the IAR, recommended approval of the report by the Board.

In the Board's opinion, the Integrated Annual Report provides a fair and balanced representation of the integrated performance of the Company and addresses all material issues and presents the performance

of Minergy fairly. The Board accordingly approved the IAR on 26 October 2022.

About this report

social and governance ("ESG") approach, as well as the market into which Minergy's products are sold.

References

References to "Minergy" or "the Company" in this report are to Minergy Limited. References to "the Group" in this report are to Minergy and its subsidiaries Minergy Coal Pty Limited and Min Sales Pty Limited.

This report further indicates, via this icon, where additional information is available on the Company's website.

The report is guided by:

• the King Code of Governance Principles for South Africa ("King IV™") - the King IV™ application summary is contained on the Company's website: www.minergycoal.com;
• the Botswana Companies Act, CAP 42:01, as amended ("the Companies Act");
• the Equity Listing Rules of the Botswana Stock Exchange ("BSE");
• where applicable, the CPR, which reports the Group's Resources and Reserves, and which was independently prepared in

Forward-looking statements

This Integrated Annual Report contains forward-looking statements about the operating environment, outlook, and operations, which are affected by risks and uncertainty. Certain factors could influence the ultimate outcomes to be significantly different from our expectations. Our external auditors have not audited our forward-looking statements.

Board responsibility statement

Minergy's Board of Directors ("the Board") confirms its responsibility for the integrity of the report, the content of which has been collectively assessed by the Directors, who believe that all material issues have been addressed. The annual financial statements have been audited by the independent external auditor, Grant Thornton Botswana,

in accordance with the Companies Act, as indicated in their report, but no other information contained in the IAR has been independently assured apart from an extract from the CPR. The audited full year consolidated financial statements were prepared by the Acting Chief Financial Officer, Julius Ayo (Bachelor of Accounting ("BACC") and Association of Certified Chartered Accountants ("ACCA")), under the supervision of the Chief Executive Officer ("CEO"), Morné du Plessis CA(SA).

Mokwena Morulane	Morné du Plessis
Independent	Chief Executive
Non-executive	Officer
Chairman

Julius Ayo	Leutlwetse Tumelo
Acting Chief	Non-executive Director
Financial Officer

Cross Kgosidiile

Non-executive

Director

Minergy  Integrated Annual Report 2022

01

Group overview

This chapter contains information to assist readers of this report in understanding the core business of the Group, as well as highlights of and the successes achieved during the financial year.

Despite being dubbed a controversial commodity, coal is a strategic resource for Botswana. The role of coal in the local, regional and international markets is discussed and explained, primarily as to how this influences the Minergy business model and supports the sales strategy.

Effective risk management is critical to sustainability. The top 10 business risks pertaining to Minergy are discussed with their risk mitigation strategies and what will be focused on in the year ahead.

03

Group overview

Minergy  Integrated Annual Report 2022

About Minergy

Coal mining, beneficiation and trading

Minergy is the holding company of the Minergy Group, and the development and operation of the Masama

Coal Mine represents the first step in the strategy of becoming a mid-tier southern African coal mining company.

04

SectionGroup overview

Minergy Limited ("Minergy") is the holding company of the Minergy Group, holding 100% of the subsidiary Minergy Coal, the licence holder.

Minergy is a Botswana registered company listed on the main board of the BSE, with a proposed listing on an international stock exchange planned.

Additional information available in 06 -

Shareholder information and notice of

Annual General Meeting (page 91-94)

The Masama Coal Mine is located on the south-westernedge of the Mmamabula Coalfield in southern Botswana, 60km northeast of Gaborone. It has access to a rail siding situated at Tshele Hills.

The 25-year mining licence spans 67km2 and holds 376 million tonnes of coal, of which 80 million tonnes are opencast.

The mine is a fully developed Greenfields project.

Infrastructure includes:

• Fully operational beneficiation plant
• Open pit mining operations
• Water and power reticulation
• 25-yearsurface lease over the mining licence area.
• This supports a monthly production capacity of 125 000 tonnes Run of Mine ("ROM") and Feed-to-Plant, yielding
  75 000 tonnes of saleable product, which can be expanded to double the capacity. Some of the infrastructure for this is already in place.

Additional information available in 03 - Coal resource and reserve information (page 25-26)

Target markets include the sized industrial market in southern Africa as well as seaborne thermal exports (serviced via the east and west coast of Africa)