Commentary

The unaudited condensed consolidated financial results for the six months ended 30 June 2026 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 Glencore-Merafe Chrome Venture (Venture), which is 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 the earnings before interest, taxation, depreciation and amortisation (EBITDA) from the Venture. Merafe has one reportable segment, being the mining and beneficiation of chrome ore into ferrochrome and the extraction of 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, increased by 36% from the prior period to R3 433 million (June 2025: R2 519 million).

Ferrochrome revenue increased by 3% from the prior period to R1 393 million (June 2025: R1 359 million), supported by an 18% increase in the average net cost, insurance and freight (CIF) prices. It was, however, offset by a 4% decrease in ferrochrome sales volumes to 73kt (June 2025: 76kt) and a strong average ZAR:USD exchange rate.

Chrome ore revenue increased by 78% from the prior period to R1 786 million (June 2025: R1 004 million), primarily driven by a 75% increase in chrome ore sales volumes to 380kt (June 2025: 217kt), supported by an 11% increase in the chrome ore price.

PGMs concentrate sold over the period generated revenue of R255 million (June 2025: R156 million), driven by a 96% increase in the average basket price for PGMs. This strong revenue growth was achieved despite lower volumes sold and the impact of a stronger ZAR:USD exchange rate.

Operating and other expenses increased by 35% to R2 649 million (June 2025: R1 956 million*), primarily driven by higher chrome ore sales volumes. Production costs increased, evidenced by total unit production costs for ferrochrome and chrome ore which increased by 61% and 11%, respectively, compared to the average cost for the prior comparative period. Higher chrome ore prices and a higher fixed cost absorption rate due to standing charges negatively impacted the total unit production cost for ferrochrome. Operating and other expenses include Merafe’s attributable share of standing charges of R266 million (June 2025: R214 million). There was a nominal write down of inventory of R8 million (June 2025: R2 million) during the six months ended 30 June 2026.

Operating and other expenses also encompass corporate costs of R33 million (June 2025: R35 million). Included in corporate costs is a cash-settled share-based payment expense of R2 million (June 2025: R1 million credit) and a bonus provision of R4 million (June 2025: R5 million).

Included in Merafe’s EBITDA of R774 million (June 2025: R483 million*) is a foreign exchange loss of R10 million (June 2025: R81 million).

Earnings for the six months ended 30 June 2026 amounted to R512 million (June 2025: R233 million), after taking into account depreciation, amortisation and impairments of R107 million (June 2025: R219 million), net financing income of R28 million (June 2025: R37 million*) and a taxation expense of R189 million (June 2025: R73 million). The decrease in depreciation, amortisation and impairment charges compared to the prior period is primarily attributable to the full write-off of suspended smelters in the comparative period. During the current reporting period, an impairment loss of R16 million (June 2025: R113 million) was recognised, relating to capital expenditure incurred on smelting plants that were impaired in the prior year. No cash-generating unit (CGU) impairment adjustments were recognised during the reporting period.

Merafe’s proportionate share of income from an associate of Unicorn Chrome Proprietary Limited (Unicorn Chrome) amounted to R6 million for the period (June 2025: R5 million).

Sustaining capital expenditure decreased by 9% to R157 million (June 2025: R173 million) due to cash preservation initiatives in response to adverse market conditions. Expansionary capital expenditure of R17 million (June 2025: R30 million) includes R7 million spent on the Eastern PGMs operations.

The unsecured credit facility with ABSA of R300 million remained unutilised at period end.

Merafe’s share of the 120-day notice deposit that is managed by Glencore Holdings South Africa through a Treasury Service Agreement amounted to R410 million (December 2025: R394 million). The Venture has designated this investment to fund future environmental rehabilitation obligations. The funds are unencumbered. Additionally, these resources are used to back Eskom Holdings SOC Limited (Eskom) and the Department of Mineral and Petroleum Resources’ bank guarantees. In prior periods, the deposit was erroneously classified as cash and cash equivalents. This was corrected in the current reporting period.

As at 30 June 2026, Merafe had a cash and cash equivalents balance of approximately R871 million (December 2025: R458 million). In addition, Merafe’s attributable share of balances held with Central Treasury amounted to approximately R721 million (December 2025: R698 million). During the current period, balances previously classified as cash and cash equivalents in the statement of cash flows were reclassified to balances held with Central Treasury in order to correct the presentation adopted in prior periods. Accordingly, the combined balance of the cash and cash equivalents and balances held with Central Treasury amounted to R1 591 million (December 2025: R1 156 million).

The above cash balance includes restricted cash of R9 million (December 2025: R9 million) which is held in a trust bank account to fund the rehabilitation of the Kroondal mine and is therefore not available for general use by the Group.

Trade and other receivables increased by 19% from the balance reported at 31 December 2025.

Ferrochrome finished goods volume of 27kt (December 2025: 71kt) represents approximately two to three months of sales. The closing inventory value decreased to R1 338 million (December 2025: R1 899 million). This reduction includes the net realisable value (NRV) adjustment referred to earlier.

The board of directors (Board) has declared an interim gross cash dividend of 16 cents per share (June 2025: 4 cents per share).

The Venture has remained fatality-free during the six month period (June 2025: no fatalities). The LTIFR for the six month period was 0.63 (June 2025: 1.06) and the TRIFR was 1.36 (June 2025: 1.58).

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.

Employees are issued with customised Hearing Protection Devices (HPDs) and reducing noise exposure at the source remains our priority. The Venture had two confirmed Occupational Diseases by 30 June 2026 compared to one in the comparative period, one at Helena mine and the other at Thorncliffe mine. Both incidents pertained to noise induced hearing loss.

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 impact that extends 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. We continue to prioritise community-driven investments that deliver measurable returns for both the business and local stakeholders, such as sustainable supply chains and infrastructure development.

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. The annual collaborative career development expo drew more than 5 000 learners from neighbouring schools to provide an opportunity for interested high school learners to explore future careers in mining and metals.

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.

Infrastructure remains a key focus area, with the handover of the recently completed double lane Steel Bridge project providing commuters safe and reliable passage that reduces commuter time by more than one hour daily.

Merafe now supports the following five schools: Seraleng Primary School, Abana Primary School and Boitekong I and II Secondary Schools and Meriti Secondary School. Through Adopt-a-School Foundation, the Company funds various programmes which inter alia: leadership advance programmes, upskilling of desktop support technicians and robotics and coding programmes.

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 28kt (June 2025: 112kt) for the period ended 30 June 2026 due to the Wonderkop and Boshoek smelters being suspended, as a result of adverse market conditions. Lion smelter was brought back to production towards the end of February 2026.

Total unit cost of ferrochrome production increased by 61% period-on-period.

The key contributors to the increase in costs are higher market chrome ore prices, together with increased fixed and plant costs. The increase in fixed and plant costs was impacted by lower production.

Attributable saleable chrome ore produced was 4% lower than the prior period.

Total production costs per unit for chrome ore were 15% higher than the prior period due to lower production.

Total production costs for UG2 were 19% lower, due to lower prices for raw material.

Attributable PGMs concentrate production from the Venture was 6.7koz, resulting in a decrease of 5% compared to the prior period.

The consultation process pursuant to sections 189 and 189A of the Labour Relations Act, 66 of 1995 (Section 189 Process), which commenced in September 2025, was withdrawn at the end of May 2026 following the conclusion of the National Energy Regulator of South Africa (NERSA) public participation process and its approval of a tariff of 62c/kWh for the ferrochrome industry.

The approval by NERSA paved the way for the Venture to finalise terms and conditions of the Negotiated Pricing Agreements (NPAs) with Eskom.

Following the conclusion of the NPAs, the focus has shifted to the safe restart of the Boshoek and Wonderkop smelters.

There were no material changes to the Mineral Reserves, Mineral Resources and Mining Rights of the participants in the Venture from those reported in Merafe’s Integrated Annual Report for the year ended 31 December 2025.

Chinese ferrochrome production increased by 32%¹ year-on-year during the first half of the year, significantly outpacing the global average growth of 10%¹. The increase was primarily driven by the continued ramp-up of low-cost production capacity in China, supported by competitive power costs, expanding smelting capacity and access to imported chrome ore. The additional Chinese production displaced higher-cost ferrochrome production in South Africa, where elevated electricity tariffs and cost pressures continued to constrain output and competitiveness.

The reduction in South African ferrochrome production resulted in a further shift towards the export of chrome ore. Global imports of South African chrome ore increased by 30%² year-to-date to May compared with the corresponding period in the prior year. China remained the dominant destination, accounting for 86%² of total imports, reflecting the country’s growing ferrochrome production base.

Global stainless-steel production, the largest end-use market for ferrochrome, increased by 2.9%¹ year-on-year during the first half of the year. The growth was primarily driven by a 3.4%¹ increase in Chinese stainless-steel production, underpinning continued robust demand for chrome units.

¹ CRU Data.

² SARS trade stats.

For the remainder of 2026, the outlook appears cautiously optimistic. The negotiated reduction in electricity tariffs and improved power supply from Eskom significantly lowers operational risks for smelters, enabling a rebound in production levels that had previously been curtailed. However, margins may remain pressured due to increased ferrochrome supply from China and potential market oversupply, unless global stainless steel demand strengthens unexpectedly. While chrome ore prices have stabilised, the overall profitability will largely depend on how smelter throughput and ferrochrome pricing evolve throughout the second half of the year. To assess the Company's cash flow and profitability trajectory, investors should monitor developments around these key success drivers of the business.

We 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

7 August 2026