Notes to the unaudited condensed consolidated financial statements

These unaudited condensed consolidated interim results for the six months ended 30 June 2025 have been prepared under the supervision of Ditabe Chocho CA(SA) (Financial Director), in accordance with and containing the information required by IAS 34: Interim Financial Reporting and for a South African company, the Financial Pronouncements as issued by the Financial Reporting Standards Council and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the requirements of the Companies Act of South Africa No. 71 of 2008, as amended, and the JSE Limited Listings Requirements.

The unaudited condensed consolidated financial statements are presented in South African Rand, and all values are rounded to the nearest thousand (R'000), except where otherwise indicated.

A number of accounting policies and disclosures require the determination of fair value for both financial and non-financial assets and liabilities.

Fair values have been determined for measurement and disclosure purposes based on the methods indicated below.

Geographical areas of ferrochrome sales to customers

The majority of customers are stainless steel mills located at the following revenue destinations:

Geographical areas of chrome ore sales from customers

Sales to the following customers individually comprise more than 10% of total sales:

Sales to the following customers individually comprise more than 10% of total chrome ore sales:

Related-party transactions and balances

During the current reporting period, management reviewed its related-party relationships in accordance with IAS 24: Related Party Disclosures. The Glencore plc Group is a related party, taking into consideration the shareholding and related significant influence coupled with the substance of the relationship. Significant transactions and balances with all entities within the Glencore plc Group are therefore disclosed together with the comparative figures.

All related-party transactions relate to Merafe's attributable 20.5% interest in the Venture. At the end of the period, there were no outstanding commitments.

The Group's annualised effective tax rate is 23.8% (June 2024: 28.26%) for the six months ended 30 June 2025.

During the reporting period, inventory of R2 million (June 2024: R1 million) was written down.

Assumptions based on the current economic environment have been made, which management believes provide a reasonable basis upon which to estimate the future liability. Actual rehabilitation costs will ultimately depend upon future market prices for the necessary rehabilitation works, which will reflect market conditions at the relevant time. Furthermore, the timing of rehabilitation is likely to depend on when the mines cease to produce at economically viable rates.

The discount rate used in the calculation of the provision as at 30 June 2025 equalled 11.9% (December 2024: 7.6%). There was no change in estimate effect that affected property, plant and equipment in the current period.

During the reporting period, impairment adjustments were made relating to these specific assets that were fully written off: the Tswelopele and Bokamoso pelletising plants and the Wonderkop smelter. The resulting impairment loss was R110 million (June 2024: Rnil). This was in light of grounds pointing to the likely impairment of some of our smelting operations. This conclusion was reached after considering several critical factors, which included the adverse state of the ferrochrome market and the uncompetitive level of our operating costs.

The Group is subject to direct and indirect tax in the South African jurisdiction. The Group's subsidiary undertakes various cross-border transactions within the Venture, subject to the Group's transfer pricing policies. As a result, significant judgement is required to determine the Group's provisions for income taxes. The income tax and annual assessments are subject to examination within prescribed periods by the South African Revenue Service (SARS).

As previously reported, SARS finalised the audit of the Group's transfer pricing matter relating to the 2016 and 2017 years of assessment on 30 October 2024. Pursuant to the finalisation of the audit, SARS issued additional assessments on 30 October 2024 levying additional income tax, dividends tax, understatement penalties and interest in the aggregate amount of R406 million against the Group for the 2016 and 2017 years.

The Group disagrees with the additional assessments and, on 25 June 2025, lodged an objection with SARS against the additional assessments. Additionally, the Group had applied for a full suspension of payment of the disputed tax debt, which SARS partially suspended resulting in R232 million being payable. Pursuant to section 9 of the Tax Administration Act of 2011, as amended, the Company has requested SARS to reconsider its decision not to fully suspend payment and is awaiting SARS' response.

Management continues to rely on opinions obtained from external legal and tax advisers to inform and support the significant judgement required in interpreting relevant tax legislation. The matter has been disclosed as a contingent liability as its outcome, due to the dispute, remains uncertain and any potential tax exposure cannot be reliably estimated. Accordingly, the consolidated financial statements have made no adjustment for any effects on the Group.

As reported above, on 8 August 2025, the Board resolved to declare an interim cash dividend of 4 cents (2024: 20 cents) per share for the six months ended 30 June 2025.

The directors are not aware of any material events that occurred after the reporting period and up to the date of authorisation of this report that may require adjustment or disclosure in these interim financial statements.

Notice is hereby given that, on 8 August 2025, the Board resolved to declare a gross interim cash dividend of 4 cents (June 2024: 20 cents) per share to holders of ordinary shares. The dividend will be paid out of income reserves.

The ordinary dividend will be subject to a local dividend tax rate of 20%. The net local ordinary dividend, payable to those Merafe shareholders (Shareholders) who are not exempt from paying dividend tax is therefore 3.2 cents per share. Merafe's income tax number is 9 550 008 602. The number of ordinary shares issued at the date of the declaration is 2 499 126 870.

The important dates pertaining to the dividend are as follows:

Shareholders will not be permitted to dematerialise or rematerialise their ordinary shares between Wednesday, 3 September 2025 and Friday, 5 September 2025, both days inclusive.