Notes to the unaudited condensed consolidated financial statements

These unaudited condensed consolidated interim results for the six months ended 30 June 2026 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, 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 27% (June 2025: 23.8%) for the six months ended 30 June 2026.

During the reporting period, inventory of R8 million (June 2025: R2 million) was written down.

Assumptions based on the current economic environment have been made, which management believes are 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 required that 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 2026 equalled 6.5% (December 2025: 7.5%). There was no change in estimate effect which 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 R16 million (June 2025: R113 million). 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.

Following a reassessment of the Group’s restructuring obligations and the finalisation of restructuring activities, management determined that a portion of the restructuring provision recognised in prior periods was no longer required. Accordingly, an amount of R181 million has been reversed and recognised in the statement of profit or loss for the period ended 30 June 2026.

The reversal reflects lower-than-anticipated costs and the settlement of certain obligations at amounts below original estimates. The remaining provision adequately reflects the Group’s best estimate of outstanding restructuring-related obligations.

Certain prior period balances in the consolidated statement of financial position and statement of cash flows have been reclassified to conform to the current period’s presentation. Specifically, amounts previously reported under ‘Cash and cash equivalents’ have been reclassified to ‘Other short-term financial asset’ and ‘Cash and cash equivalents and balances held with Central Treasury’. The reclassifications had no impact on previously reported total assets, total liabilities, net income, or equity.

Statement of profit or loss and other comprehensive income

Statement of cash flows

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. After taking several procedural steps, including submitting an objection that was ultimately denied by SARS, the Company filed a notice of appeal in November 2025. This formally initiated the Tax Court appeal process. Furthermore, the Company is still awaiting SARS’ response regarding its request to review the partial suspension of payment for the disputed tax debt.

Management continues to rely on opinions obtained from external legal and tax advisers to inform and support the significant judgements required in interpreting the relevant tax legislation. In addition, management is in the process of preparing documentation for court proceedings in relation to the matter. Due to the ongoing dispute, the outcome remains uncertain and any potential tax exposure cannot be measured reliably. As a result, the matter has been disclosed as a contingent liability. Accordingly, the consolidated financial statements have made no adjustment for any effects on the Group.

As reported below, on 7 August 2026, the Board resolved to declare an interim cash dividend of 16 cents per share for the six months ended 30 June 2026 (June 2025: 4 cents per share).

The directors are not aware of any material events which 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 7 August 2026, the Board resolved to declare a gross interim cash dividend of 16 cents per share (June 2025: 4 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 12.80 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, 2 September 2026 and Friday, 4 September 2026, both days inclusive.