South32 : Tax Transparency and Payments to Governments Report

TAX TRANSPARENCY AND PAYMENTS

TO GOVERNMENTS REPORT 2023

ABOUT THIS REPORT

Tax Transparency and Payments to Governments Report 2023

This report is about our approach to tax and how we conduct our tax arrangements globally and the size of tax payments and contributions to governments we made for the year ended 30 June 2023.

Our 2023 Annual Reporting Suite

ANNUAL		SUSTAINABLE		SUSTAINABILITY		CORPORATE		MODERN
REPORT		DEVELOPMENT		DATABOOK		GOVERNANCE		SLAVERY
2023		REPORT		2023		STATEMENT		STATEMENT
		2023				2023			2023

Annual Report	Sustainable	Sustainability Databook	Corporate Governance	Modern Slavery
	Development Report		Statement	Statement

• You can view all the documents in our Annual Reporting Suite atwww.south32.net

Disclaimer

This report also refers to commodities 'we produce' and commodities in 'our portfolio', which include commodities such as bauxite, alumina, aluminium and copper that may form part of, or be produced by, joint arrangements that are not operated by South32. References in this report to 'our operations', or commodities 'we produce' or in 'our portfolio', should be read in this context.

Non-IFRS

This report includes non-IFRS financial measures, including underlying measures of earnings, effective tax rate, returns on invested capital, cash flow and net cash/(debt). Non-IFRS measures should not be considered as alternatives to an IFRS measure of profitability, financial performance or liquidity. For an explanation of how South32 uses non-IFRS measures, see page 38 of Annual Report.

Cover: A geologist at Cannington in Australia.

RIght: Local farmers from Maputo province in Mozambique.

SOUTH32 TAX TRANSPARENCY AND PAYMENTS TO GOVERNMENTS REPORT 2023

CONTENTS

About us	2
Introduction	3
Where we operate	4
Our Approach to Tax	6
Total payments made by country and level of government	8
Total payments to government by project	10
Our Underlying income tax expense and
Underlying effective tax rate	11
Our income tax expense and effective tax rate	12
Our income tax payable and deferred tax movements	14
2023 country by country information	15
International related party dealings	16
Our equity accounted investments	18
Mineral development contracts	23
EITI supporter expectations and GRI 207 compliance	24
Basis of preparation for the year ended 30 June 2023	25
Glossary of terms	26
Independent auditor's report	27

Acknowledgement

We acknowledge and pay our respects to the Indigenous, Traditional and Tribal Peoples of the lands, waters and territories on which South32 is located and where we conduct our business around the world.

We respect and acknowledge the unique cultural and spiritual relationships that Indigenous, Traditional and Tribal Peoples have to the lands, waters and territories, and their rich contribution to society.

In the spirit of respect and reconciliation, we will continue to support initiatives that strengthen culture and ways of life so that their legacy continues and extends to future generations.

SOUTH32 TAX TRANSPARENCY AND PAYMENTS TO GOVERNMENTS REPORT 2023 1

ABOUT US

SOUTH32 IS A GLOBALLY DIVERSIFIED MINING AND METALS COMPANY

We produce commodities including bauxite, alumina, aluminium, copper, silver, lead, zinc, nickel, metallurgical coal and manganese from our operations in Australia, Southern Africa and South America. With a focus on growing our base metals exposure, we also have two development options in North America and several partnerships with junior explorers around the world.

Our purpose

Our purpose is to make a difference by developing natural resources, improving people's lives now and for generations to come. We are trusted by our owners and partners to realise the potential of their resources.

Our strategy

Our purpose is underpinned by a simple yet powerful strategy which is focused on optimising the performance of our operations, unlocking their potential and identifying

new opportunities to create value for our stakeholders.

OPTIMISE UNLOCK IDENTIFY

• Learn more about Our strategy in action in our Annual Report atwww.south32.net.

Our values

While our strategy outlines what we do to achieve our purpose, our values guide how we do it. Every day, our values shape the way we behave and the standards we set for ourselves and others.

CARE TRUST TOGETHERNESS EXCELLENCE

• Learn more about our values atwww.south32.net.

2 SOUTH32 TAX TRANSPARENCY AND PAYMENTS TO GOVERNMENTS REPORT 2023

INTRODUCTION

OPERATING TRANSPARENTLY AND ETHICALLY

We care about the communities in which we operate and seek to create shared value through the development of natural resources.

Publishing an annual Tax Transparency and Payments to Governments Report allows us to demonstrate our tax affairs are conducted in accordance with our commitment to ethical business practices.

We believe tax transparency helps build community confidence about the value created from resource development. We support initiatives that require companies to publicly share relevant data, including payments made to governments and communities. More details about our social investment program can be found in our Sustainable Development Report at www.south32.net.

In the year ended 30 June 2023 the Group had an Underlying Effective Tax Rate (ETR) of 36.1 per cent. This is in line with the corporate tax rates of the jurisdictions in which we operate.

Our Underlying earnings and Underlying ETR include our manganese operations and the Sierra Gorda copper mine's results on a proportionally consolidated basis.

The Group's statutory results report our interest in these operations as well as our non-material equity accounted investments in the Mineração Rio do Norte (MRN) bauxite mine in Brazil and Port Kembla Coal Terminal (PKCT) in New South Wales, Australia. Profit from equity accounted investments is reflected in the

Group's statutory results on an after-tax basis.

The Group's statutory tax expense was higher than its statutory profit before tax. This unusual result was due to no tax benefit being recognised for

1. non-cashimpairment of the Taylor Deposit at our Hermosa project(1). Details of how the tax expense and ETR have been calculated can be found on page 12.

We paid US$1,470 million in taxes and royalties in the year ended 30 June 2023, an increase of

US$23 million compared to the prior year. We had increased payments despite reduced profitability of the Group due to the payment of pre-acquisition Dutch taxes associated with the purchase of an interest in Sierra Gorda and the payment to extend the term of our Colombian mining agreement to 2044. Details of payments made in relation to the current and preceding year can be found on page 14.

This report outlines:

• Our globally consistent approach to tax;
• Our tax payments to governments on a country-by-country and project-by- project basis;
• An explanation of our accounting income tax expense; and
• A summary of our international related party dealings.

Our report meets the requirements of the following tax transparency measures:

• United Kingdom's (UK) Report on Payments to Governments Regulations 2014 (UK Regulations), including the tax strategy reporting requirement;
• Chapter 10 of the European Union (EU) Accounting Directive;
• Disclosure of tax information in line with the Australian Board of Taxation's Voluntary Tax Transparency Code for increased public disclosure of tax information;
• Global Reporting Initiative (GRI) Sustainability Reporting Guidelines, including GRI 207;
• Extractive Industries Transparency Initiative (EITI) reporting; and
• ICMM Social and Economic Reporting Framework and Guidance Indicator 1.

Providing information which meets the requirements of these disclosure initiatives, some of which are voluntary, demonstrates that we are providing tax transparency beyond the mandatory legislative requirements applicable to our operations.

Details on how we comply with EITI expectations and GRI 207 are provided on page 24.

We support the EITI and its objectives. We provide a financial contribution to the EITI through our membership of the ICMM. This membership supports the EITI's ongoing activities of promoting open and accountable management of mineral resource wealth. The EITI has recently confirmed South32 meets all its expectations of supporting companies.

We also support the EITI's continued efforts for beneficial ownership transparency and publicly disclose contracts and licences for the exploration and development of minerals and other natural resources

as outlined in the EITI standard. While most of our mineral developments are in jurisdictions where licences are issued pursuant to legislation, we have two government mineral development contracts and one non mining government contract related to to the Mozal Aluminium smelter. These contracts are publicly available, and more details are provided on page 23. Our beneficial ownership is disclosed in our Sustainability Databook at www.south32.net.

A description of technical terms used in this report and information regarding the approach adopted in compiling the data presented can be found in the Basis of Preparation and the Glossary (refer to pages 25 and 26). We have also included extensive footnotes with explanations/ reconciliations to help readers understand how the numbers quoted in this report reconcile to our 2023 Annual Report.

An independent audit report which provides assurance on total payments made by country and level of government and total payments to government by project has been provided by KPMG (refer to page 27).

1. Details of the Taylor Deposit non-cash impairment can be found in the 'Hermosa Project Non-Cash Impairment' exchange release and our Annual Report at www.south32.net.

SOUTH32 TAX TRANSPARENCY AND PAYMENTS TO GOVERNMENTS REPORT 2023 3