The new Northam: continuing to create value for all stakeholders

Annual integrated report 30 June 2021

Rhodium - the rose

Rhodium is considered the rarest and most valuable precious metal in the world.

In its pure form it is silvery-white and the most reflective of all metals. It was, however, first isolated from a rosey-red coloured chloride salt in 1803 by the English scientist, William Hyde Wollaston. This led to him naming it after the Greek word for rose, "rhodon".

The photograph on the front cover of this report shows powdered rhodium chloride.

Rhodium has in the past been lesser known in comparison to its sister metals, platinum and palladium. It has become more prominent in recent times as a result of its very special application when it comes to human health - rhodium is used extensively in the automotive sector to control the emissions of nitrous oxides (NOx) which are deleterious to pulmonary health.

Only around 30 tonnes of rhodium are sold each year, but its price over the past year averaged over R9 million per kilogram. This is important for South Africa and particularly for South African Platinum Group Metal (PGM) miners, as over 85% of the world's rhodium comes from the Bushveld, predominantly from our UG2 orebodies. The remainder is derived from Norilsk in Russia, and from the Sudbury Complex in Canada.

In the past, the world was generally at a loss to find significant uses for rhodium, as it was with all of the PGMs. We had to wait for the disciplines of chemistry and engineering to evolve.

Rhodium's physical properties were harnessed in its earliest uses. These include a high melting point, extreme hardness, durability, lustre (or reflectivity) and resistance to corrosion. Alloying rhodium with other PGMs also increases their hardness and lustre.

Uses included pen nibs and razor blades, high-temperature laboratory instruments such as crucibles and thermometers (termed thermocouples) and low resistance electrical contacts in motors and electronic circuits. Durability, along with reflectivity led to its application as a thin, electroplated coating to platinum jewellery, giving lustre to what would otherwise be a relatively dull surface. This property is also employed in the reflective surfaces required for powerful searchlights and lighthouse beacons.

Only in the 1950s was it found that rhodium acted as a catalyst in numerous organic reactions. This has had profound positive implications for our modern world.

Catalysts are defined as substances that either increase the rate, or lower the activation energy of a chemical reaction without the catalysts themselves being consumed or undergoing any permanent chemical change. This leads to significant energy and cost savings in industrial processes.

One of the earliest catalytic applications for rhodium was in the Monsato process, in which acetic acid is produced from methanol. A second and by far the most important application of the metal, accounting for over 90% of global consumption, is in the reduction of NOx emissions from vehicle exhausts. Developments in modern organic chemistry are leading to the discovery of an ever increasing number of catalytic applications.

Environmental legislation in Europe, China, India and more recently, the United States, is heavily focussed on NOx gases. This is creating significant demand-pull. In addition, since the global financial crisis of 2008, there has been significant under investment in PGM mining assets. This has negatively impacted the ability of South African primary producers to meet the growing demand. This, in turn, led to price appreciation, with a consequent flow-through to the basket price received by miners of UG2 ore. Current weak pricing is related to silicon chip supply constraints restricting automotive manufacturing. This is expected to be a short-term event and the prices should rebound once supplies are restored.

At Northam, rhodium represents only around 8% by mass of all of the precious metals we produce and sell. However, for the past year it contributed on average 50% of our revenue. This contribution will increase as our UG2 dominated production growth strategy plays out and automotive supply normalises.

We believe in the metals that we produce, including rhodium. They are special. Our counter-cyclical investment in various growth projects demonstrates this confidence.

Northam will continue to produce many roses for years to come.

Contents

Introduction

  1. Our reporting suite
  2. Introducing our report

Business overview

  1. How we create value for all stakeholders
  1. A 12 year window into our business
  1. The year at a glance
  1. The Composite Transaction: Empowering Northam for the future
  1. Our growing operations
  1. Mineral Resources and Mineral Reserves
  1. Breathing new life into a mature mine
  1. On track to deliver Booysendal's medium-term growth target
  1. Full mine-build programme in progress
  1. Upgrading for the future
  1. Our key stakeholder relationships

Governing our business

  1. A message from our independent chairman
  1. Board of directors
  1. Executive committee
  1. Q&A with the chief executive officer, Paul Dunne

Material issues, risks and opportunities

  1. COVID-19and beyond
  1. Material issues
  1. Managing risks and opportunities

Value through delivery

64 CFO statement: A recap on our strategy and beliefs

Other information

68 Glossary

  1. Analysis of Northam shareholders
  2. Administration and contact information

We believe in the positive impact of mining, mining that benefits our employees, our communities, the environment and our investors. Our strategy is underpinned by our belief in our country, our company, our people and our product.

Our value creating business model is underpinned by these beliefs. They drive our vision to be the reliable PGM producer of choice and inform our strategy of growing production down the cost curve. It is supported by our enablers and delivered through our unique operating model.

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We use the capitals concept to convey quantitative and qualitative information. The degree and nature of the impact that our material issues have upon our business and the various capitals have also been considered throughout the report.

Capitals

Financial

Manufactured

Social

Human

Natural

Intellectual

Stakeholders

Investors and

Employees

Customers

providers of funding

Communities

Unions

Industry

associations

Government and

Suppliers of goods

regulatory authorities

and services

Board and committees

A

Audit and risk committee

H

Health, safety and

M

Management review

environmental committee

committees

B

Board of directors

I

Investment committee

N

Nomination committee

E

IT

S

Social, ethics, human

Executive committee

IT steering committee

resources and

transformation committee

Subsequent to year end a Remuneration committee was established

Links

Refers to other pages in our reporting suite

Refers to supporting documents on the website: www.northam.co.za

COVID-19 issue

Financial and non-financial reporting within this Annual integrated report pertain to Northam Platinum Limited (share code NHM).

However, subsequent to year end, a change to its corporate structure was implemented.

Northam Platinum Holdings Limited (share code NPH) was listed on the main board of the Johannesburg Stock Exchange (JSE). Shareholders in Northam Platinum Limited (share code NHM) were offered one Northam Platinum Holdings Limited Share for each Northam Platinum Limited Share held and Northam Platinum Limited was subsequently delisted from the main board. The Scheme was therefore a one for one share swop.

Thus, at the date of release of this report, the entity listed on the JSE is Northam Platinum Holdings Limited (share code NPH).

Apart from the structure of the Northam group, nothing has changed with regards to our business, the way in which we operate and how we create value for shareholders.

Northam Platinum Annual integrated report 2021

Introduction

Business overview

Governing our business

Material issues

Value through delivery

Other information

Our reporting suite

Our integrated report is supplemented by a full suite of online publications, which caters for the diverse needs of our broad stakeholder base as part of our comprehensive integrated reporting. These can be accessed on our website at www.northam.co.za

The new Northam: continuing to create value for all stakeholders

Annual integrated report 30 June 2021

Annual integrated report

Prepared in accordance with:

International

South African Companies

Framework of the

Regulations, 2011

International Integrated

(Companies Regulations)

Reporting Council (IIRC)

JSE Listings Requirements

International Financial

Debt Listings Requirements

Reporting Standards (IFRS)

King IV Report on Corporate

South African Companies

Governance for South Africa,

Act No. 71 2008, as

2016 (King IV™)

amended (Companies Act)

Approval by the board of

directors

The new Northam: continuing to create value for all stakeholders

Mineral Resources and Mineral Reserves statement as at 30 June 2021

Mineral Resources and Mineral Reserves statement

Prepared in accordance with:

South African Code for

JSE Listings Requirements

Reporting of Exploration

Sign off by the Lead

Results, Mineral Resources

Competent Person

and Mineral Reserves 2016

(the SAMREC Code (2016))

Corporate governance report

The new Northam:Sustainability report

continuing to create value for all stakeholders

Sustainability

report 2021Prepared in accordance with:

Core requirements of Global Reporting Initiative (GRI) Standards

Prepared in accordance with:

continuing to create value

The new Northam:

International

Approval by the

Corporate governance report

for all stakeholders

Framework of the IIRC

chairpersons of the

30 June 2021

Companies Act

respective committees for

Companies Regulations

the committee reports

  • JSE Listings Requirements
  • Debt Listings Requirements
  • King IV™

Remuneration report

Prepared in accordance with:

continuing to create value

The new Northam:

International

Approval by the chair of the

Remuneration report

for all stakeholders

Framework of the IIRC

social, ethics, human

30 June 2021

Companies Act

resources and

JSE Listings Requirements

transformation committee

  • King IV™

The new Northam: continuing to create value for all stakeholders

Summarised financial results and group statistical information

30 June 2021

Summarised financial results and group statistical information

Prepared in accordance with:

IFRS

Financial Pronouncements

Interpretations issued by

as issued by the Financial

the IFRS Interpretations

Reporting Standards

Committee

Council

International Accounting

Companies Act

Standards

JSE Listings Requirements

SAICA Financial Reporting

Debt Listings Requirements

Guides

Approval by the board of

Financial Reporting

directors

Guidelines as issued by the

Accounting Practices

Committee

The new Northam: continuing to create value for all stakeholders

Annual financial statements 2021 30 June 2021

Annual financial statements

Prepared in accordance with:

IFRS

Financial Pronouncements

Interpretations issued by

as issued by the Financial

the IFRS Interpretations

Reporting Standards

Committee

Council

International Standards on

Companies Act

Auditing

Companies Regulations

International Accounting

JSE Listings Requirements

Standards

Debt Listings Requirements

The South African Institute

King IV™

of Chartered Accounts

Approval by the board of

(SAICA) Financial Reporting

directors

Guides

The chief executive officer

Financial Reporting

and finance director

Guidelines as issued by the

responsibility statement

Accounting Practices

included

Committee

The company secretary's

certificate included

Notice of the 2021 Annual General

The new Northam:Meeting continuing to create value

for all stakeholders

Notice of meeting 2021

Prepared in accordance with:

Companies Act

Debt Listings Requirements

Companies Regulations

Company's Memorandum

JSE Listings Requirements

of Incorporation

www.northam.co.za/investors-and-media/publications/annual-reports

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Northam Platinum Ltd. published this content on 30 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 September 2021 05:21:03 UTC.