Commentary

The summarised consolidated financial results for the year ended 31 December 2025 (current reporting period) are presented below.

Rounding of figures may result in minor computational discrepancies of the tabulations.

Merafe’s revenue and operating income are primarily generated from the Venture, one of the global market leaders in ferrochrome production, with a total installed capacity of 2.3 million tonnes of ferrochrome per annum. Merafe shares 20.5% of EBITDA from the Venture. Merafe has one reportable segment, the mining and beneficiation of chrome ore into ferrochrome and associated minerals. As a result, no segment report has been presented.

Merafe’s share of the revenue from the Venture, which includes a management fee, decreased by 31% from the prior year to R5 835 million (2024: R8 443 million).

Ferrochrome revenue decreased by 61% from the prior period to R2 296 million (2024: R5 909 million). Key contributors to the reduced revenue were a 6% decrease in the average net cost, insurance and freight (CIF) prices, a 58% decrease in ferrochrome sales volumes to 124kt (2024: 298kt) and the average ZAR:USD exchange which strengthened by 3% to R17.88 (2024: R18.34). Chrome ore revenue increased 37% year-on-year to R3 110 million (2024: R2 262 million). Average chrome ore CIF prices decreased by 4%, while sales volumes increased by 44% to 683kt (2024: 475kt). The stronger average ZAR:USD exchange rate negatively affected growth in chrome ore revenue. PGMs revenue increased to R390 million (2024: R267 million). The average basket price of PGMs which increased by 31% to 1 415 USD/oz (2024: 1 079 USD/oz) coupled with higher volumes sold of 14 948oz (2024:13 557oz) supported growth in PGMs revenue.

Operating and other expenses decreased by 24% to R5 137 million (2024: R6 774 million). This decrease was mainly influenced by lower ferrochrome sales volumes. A 14% higher unit production cost per tonne year-on-year lowered the full impact of this decline. Operating and other expenses include higher of standing charges of R633 million (2024: R287 million) due to the suspension of all the smelting operations. Additionally, the figure includes inventory write down of R4 million (2024: R79 million) during the year arising mainly from a net realisable value (NRV) adjustment on ferrochrome stock. Expenses also include retrenchment costs of R198 million (2024: R67 million) and R136 million (2024: R14 million) of rehabilitation provisioning related to operations that have been fully impaired.

Operating and other expenses also include corporate costs of R69 million (2024: R84 million). Corporate costs include a cash-settled share-based payment credit of R1 million (2024: R15 million expense), Corporate Social Investment expenses of R4 million (2024: R3 million) and a bonus provision of R9 million (2024: R13 million).

Merafe achieved EBITDA of R533 million (2024: R1 698 million) and included in the EBITDA is a foreign exchange loss of R165 million (2024: R29 million gain).

Earnings for the year ended 31 December 2025 amounted to R143 million (2024: R667 million), after taking into account depreciation, amortisation and impairments of R424 million (2024: R930 million), net financing income of R67 million (2024: R98 million) and a taxation expense of R47 million (2024: R219 million). The decrease in interest rates and the lower cash balance resulted in the decrease in the net financing income. The decrease in depreciation is due to the full write-off of smelting plants (except the Lion smelter) in 2024 and 2025. Although there was no impairment adjustment processed against the cashgenerating unit (CGU), specific asset adjustments were processed against the Bokamoso and the Tswelopele pelletising plants, as well as the Wonderkop smelter. The full carrying values of these plants were impaired, resulting in an impairment loss of R222 million (2024: R575 million) over the reporting period.

Sustaining capital expenditure decreased by 33% to R407 million (2024: R608 million) due to cash preservation initiatives in response to the adverse market conditions. Expansionary capital of R39 million (2024: R43 million) relates to amounts spent on mining operations, including PGMs.

The unsecured, credit facility of R300 million with ABSA remained unutilised at year end. This facility was successfully refinanced for an additional three years.

Merafe’s share of the 120-day notice deposit that is managed by Glencore Holdings South Africa through a Treasury Service Agreement was R394 million (2024: R361 million). The Venture has ring-fenced this investment for future environmental rehabilitation obligations. These funds are unrestricted. Additionally, this investment is used to back Eskom’s and the Department of Mineral Resources and Energy’s bank guarantees. In prior periods, the deposit was erroneously classified as cash and cash equivalents. This was corrected in the current reporting period.

Merafe’s year-end cash and cash equivalents balance was R458 million (2024: R603 million). Additionally, Merafe’s share of other balances held with Central Treasury was R698 million (2024: R831 million). There was a reclassification of these balances out of cash and cash equivalents in the statement of cash flows in prior periods. This treatment was corrected in the current reporting period. The sum of these two balances make up the cash and cash equivalents and balances held with Central Treasury balance of R1 156 million (2024: R1 434 million). The restricted cash of R9 million (2024: R8 million) included in the above balance is not available for general use by the Group and is held in a trust bank account to rehabilitate the Kroondal mine.

Trade and other receivables increased by 3% compared to the previous year due, inter alia, to sales mix and timing during the last quarter of 2025.

At financial year end, the 71kt (2024: 83kt) of ferrochrome finished goods on hand represented six to seven months of sales. The closing inventory value increased to R1 899 million (2024: R1 794 million). This is after the NRV adjustment referred to earlier.

The Board resolved to declare a final cash dividend of R200 million (2024: R200 million), equivalent to a cash dividend of 8 cents per share (2024: 8 cents per share) before dividend tax. This brings the total dividend for the year to R300 million (2024: R700 million).

The Venture was free of fatalities in 2025 and has remained fatality-free during the first month of the 2026 financial year. Our total recordable injury frequency rate is 1.79 compared to 2.31 in 2024.

The safety of our employees remains our top priority. We are committed to continuously improving our safety performance, focusing on the four key areas identified in our turnaround strategy: risk management, effective supervision, safety culture and contractor management.

In 2025, two occupational diseases, Noise Induced Hearing Loss (NIHL), were recorded at Rustenburg and Helena mine, with the Helena case reported in the last six months of 2025. Employees are issued with customised Hearing Protection Devices (HPDs), and reducing exposure at the source remains our priority.

The Venture’s commitment to creating a healthy work environment remains steadfast. We will continue promoting not only the health and safety of our workers but also the wellbeing of the communities in which we operate.

Our approach goes beyond the workplace, recognising that a healthy community supports a thriving workforce. Through proactive health initiatives, partnerships with local organisations and sustainable practices, we have and will continue to create lasting, positive impacts that extend far beyond our facilities.

We will review all health risk assessments on an annual basis as required by the Venture’s Health Standard and applicable legislation, and maintain our pre-, annual and exit medical surveillance to monitor the occupational health of our workforce. Implementing our Health Standards and Glencore Exposure Limits is a core strategic focus, integrated with our baseline review to confirm exposures through quantitative data analysis.

Environmental, Social and Governance (ESG) compliance is a fundamental pillar of our business operations. We foster strong relationships with employees, suppliers, customers and communities by promoting fair labour practices, employee rights and a commitment to diversity, equity and inclusion.

Despite financial challenges, we remained unwavering in our commitment to invest in our communities. As a result, our social impact has deepened, reflecting our dedication to both people and the places we serve.

Our efforts spanned infrastructure development, raising awareness of social issues, creating procurement opportunities, and supporting small businesses within our host communities. By insourcing our local business hubs, we continue to strengthen and empower local small, medium and micro enterprises (SMMEs).

Collaborations with local mines, government, and the South African Police Service (SAPS) proved successful in driving awareness of Gender-Based Violence. On World AIDS Day, the Company partnered once again to host a sports day, using the platform to highlight the ongoing fight against the pandemic. We also advanced education through our learner incubation programme, with a strong focus on science, technology, engineering and mathematics (STEM) subjects.

Women in Mining, in partnership with corporate social responsibility (CSR), mobilized employees to donate cash or sanitary towels, resulting in over 20 000 sanitary towels distributed to host communities, addressing a critical need and supporting community wellbeing.

Notably, despite financial constraints, we successfully completed and officially handed over 11 Corporate Social Investment (CSI) ad hoc capital projects, an achievement that underscores our resilience and commitment to meaningful community development.

As a member of the International Council on Mining and Metals, the Venture adheres to the mining principles, which include ten sustainable development principles and eight position statements covering issues from biodiversity to water management. We recorded no major or catastrophic environmental incidents in the reporting period. We have completed the assessment of material water-stress risks and set local water targets, implementing actions to reduce impacts and improve performance against these targets. Additionally, we have embarked on a project to visualise our knowledge base using geographic information system solutions to support decision-making processes.

We are committed to delivering our Scope 1, 2 and 3 industrial emissions targets, a 15% reduction by the end of 2026, a 25% reduction by the end of 2030 and a 50% reduction by the end of 2035 against a 2019 baseline, with a longer-term ambition of achieving net zero industrial emissions by the end of 2050.

Merafe’s attributable ferrochrome production decreased to 112kt for the year ended 31 December 2025 (2024: 301kt).

The total unit cost of ferrochrome production increased 14% year-on-year. The increase was driven by significantly higher standing charges which were offset by lower reductant, power and chrome ore costs.

Saleable chrome ore produced at the mines in 2025 was 4% higher than in 2024 mainly due higher yields.

Lower tonnages (16%) at the UG2 operations were mainly due to less feed and dispatches.

Production costs for mines were 6% more than the prior year mainly due to less volumes produced, lower yields above inflationary increases.

Production costs from the UG2 platinum tailings were 2% higher than the prior year mainly due to lower volumes which were offset by lower prices paid for raw material from PGMs producers (linked to chrome ore market prices).

Saleable PGM production increased from 13 557oz to 14 948oz as a result of the inclusion of the PGMX plant for full year and improved yields.

The Venture commenced the consultation process in terms of s189 and 189A of the Labour Relations Act on 1 September 2025.

The consultation process was commenced after engagements with the government did not identify viable options to address challenges impacting the Venture’s ferrochrome operations, with the most pressing being the provision of competitive electricity tariff.

In December 2025, the Venture signed a Memorandum of Understanding (MOU) with Eskom to extend collaboration and engagement to finding a workable energy solution by 28 February 2026. This MOU meant the agreed termination date would be extended from 31 December 2025 to 28 February 2026 and the Venture would continue paying salaries until 28 February 2026.

Post year end, after Eskom announced its in-principle support for the proposed 62c/kWh electricity tariff (refer to note 14), the Venture has extended the termination date from 28 February 2026 to 31 March 2026.

Project Phoenix, the business restructuring, streamlining and right-sizing project was unaffected and continued as planned.

Global stainless-steel output increased by 2.2%¹ in 2025, reaching 65.4 Mt¹. Growth was primarily driven by China, where production rose by 2.6%¹ year-on-year.

Global ferrochrome output outside China declined by approximately 21%¹ year-on-year, with production contracting across most regions. The most pronounced reduction occurred in South Africa, where output decreased by approximately 50%¹ year-on-year.

By contrast, ferrochrome output in China increased by more than 6%¹ to approximately 9.5Mt¹ in 2025, representing around 60%¹ of global supply. The commissioning and higher utilisation of lower-cost smelting capacity, particularly in the second half of the year, supported this increase and displaced higher-cost producers.

South African global chrome ore exports increased by 16%² year-on-year to 23.8 Mt². Prices remained at elevated levels throughout the year, supported by strong demand growth from China.

¹ CRU Data.

² SARS Data.

Our smelting operations took strains in 2025. Overall and in the medium to long-term, the viability of these operations depends on decisive and deliberate action to materially lower energy costs for smelters as well as sustained improvement in global ferrochrome/steel demand and prices.

While the future of the smelting operations remains uncertain, the chrome ore business has done well in 2025 and the Venture will continue to invest in this part of our business. As in 2025, we expect both the chrome ore and the PGMs businesses to contribute positively towards our financial performance in 2026.

We remain cautious in our approach to 2026 and will continue to focus on efficient operations, cash preservation, cost control and efficient capital allocation.

We are dedicated to creating shared value for our stakeholders.

Sandton

6 March 2026