South32 Limited (S32) Earnings Call Transcript & Summary

[Presentation]

Welcome, everyone, and thank you for joining us for South32's Annual General Meeting. My name is Karen Wood, and it's my great pleasure to chair today's meeting. Before asking Barry Winmar to come forward to offer a welcome to country, I'd like to start by acknowledging the traditional owners of the land on which we meet, the Whadjuk people of the Noongar Nation and pay my respects to elders, past and present of the lands on which we are located today and the lands on which South32 conducts its business around the world. In the spirit of reconciliation and respect, we will continue to support initiatives that strengthen the unique cultural and spiritual relationships that indigenous and tribal people have to the land, the waters and seas and their rich contribution to society and to ensure their legacy continues and extends for future generations. Would you now join with me in making Barry welcome as he conducts the welcome to Country on behalf of the Whadjuk people. Thanks, Barry.

[Foreign Language] I'll begin by acknowledging my elders past and present. And this morning, we're gathered on my ancestral land. This is the land of the Whadjuk Noongar people. I represent a civilization with the longest continuous connection to this place with some 65,000 years. I represent elders and leaders that are welcome visitors to these sacred lands, for more than 3,000 generations. A welcome to country is a sign of mutual respect. I acknowledge and pay my respects to South32 for including a welcome to the country as part of the AGM and Board meeting this afternoon. [Foreign Language] From the beginning of time to the end, this is Noongar country. Noongar people have been grateful keepers have a nation for many, many years. [Foreign Language] We respect the earth, our mother and understand. We belong to her. She does not belong to us nor her beauty. We find comfort and she is now a place for everyone to become keepers of Noongar country. [Foreign Language] We ask you look, listen, understand and embrace all the elements of Noongar country. It is forever our home. Good afternoon, ladies and gentlemen. It's an honor and privilege to be here today in one of the most diverse countries on the planet. And obviously, a beautiful city of Burley Perth, Western Australia. We are so lucky that we have so many cultures and nations that bring that knowledge and the strength to this particular land, and we all walk this land together now, together hand-in-hand as one united, all as Australians and as Western Australians. And we also acknowledge that the global citizens that we have become and companies that represent the global connection to all those ancient civilizations from around the world have called Perth home. But the responsibility bestowed upon me by Noongar Elders and Leaders, I welcome everybody here today. And I know that we only stand strong, tall and proud and united as we are in this place today with the strength of my ancestors. I ask a strong spirits to look after each and every one of you while you're here. And if you traveled here to ensure safe passage back to the arms of the families and your loved ones. [Foreign Language] Hello, and welcome. My elders are happy as we gathered here. [Foreign Language] this afternoon. Welcome, everybody. Thank you.

Thank you, Barry. We're sincerely grateful to you for being with us. I'm joining you today from Perth along with our Chief Executive Officer and Managing Director, Graham Kerr; and our Company Secretary, Claire Tolcon. Joining me on the stage from my far right are Non-Executive Directors, Carlos Mesquita, Futhi Mtoba, Xiaoling Liu, Wayne Osborn. And on my far left, Sharon Warburton, Jane Nelson, Frank Cooper, Mandle Msimang, and Stephen Pearce. Members of South32's leadership team are also attending today either in person or remotely. We have Jane Bailey from KPMG, the company's auditor; and Rod Somes from Computershare Investor Services, who's been appointed returning officer for the meeting and scrutineer of the voting. I can confirm that we have a quorum and now formally declare the meeting open. I'll ask Claire to start by reading some procedural matters. Claire?

Thank you, Karen. Today's Annual General Meeting is being conducted as a hybrid meeting, enabling shareholders, proxyholders and guests to attend in person or remotely via the online platform. For those shareholders joining us in person, please take note of the emergency exits and the evacuation information displayed on screen. If you would like to ask a question, when prompted, please raise your hand and introduce yourself to one of our microphone attendants. All physical voting cards will be collected at the end of the meeting. For those shareholders joining us online, in the event of an emergency in the room, please stay connected and an update will be provided via the online platform. Written questions can be submitted via the Q&A icon on your screen or by dialing the telephone number, which will connect you to the audio question line. Once voting opens, you can cast your vote by pressing the vote icon before the meeting closes. If we experience any major technical difficulties during the meeting, updates will be provided via our website and relevant stock exchanges. Questions received in advance of the meeting will be read out by our moderator, Belinda Truman. And if multiple questions on the same topic are received, we may group them together when we answer. I'll now hand you back to the Chair.

Thanks, Claire. As stated in the Notice of Meeting, voting will be conducted by way of a poll on all resolutions, and I now declare voting open. So you may begin recording your votes. Some of you may recall that at last year's Annual General Meeting, one of our shareholders asked that we release the proxy position on each item of business before the meeting. While I understand this isn't general practice, we have decided to trial it this year, and those proxy results were released to the ASX prior to the commencement of the meeting, together with the CEO and Chair addresses. As in prior years, we'll also display the proxy position on each item of business before a call for questions on that item. We'll review this practice ahead of next year's AGM. This year marks South32's 10th anniversary. And while much has changed over the last 10 years, our steadfast commitment to improving safety performance remains. This year, we failed to ensure that everyone went home safe and well to their loved ones. Some of you may recall that at our 2024 AGM, I spoke about the loss of Jose Luis Perez on the 17th of September 2024, while he was working at our Cerro Matoso nickel operation in Colombia. I want to reiterate what I said at the time that we cannot be truly successful unless we eliminate fatalities and serious injuries from our business. And again, I want to offer our sincere and heartfelt sympathies to Mr. Perez's family, his friends and of course, his colleagues. Graham will provide more detail about the progress we're making on improving our safety performance shortly. Also unchanged is our strategic focus on producing minerals and metals critical to the world's energy transition. The company today looks very different than one founded in 2015. We now have a stronger portfolio of assets, having divested lower-margin, capital-intensive operations in coal and manganese alloys. We have also grown our base metals production and aluminium value chain. We've done this through investments in the Sierra Gorda copper mine, the development of our Hermosa project in Arizona and the restart of the Alumar smelter in Brazil together with our partner, Alcoa. Collectively, these steps have provided additional balance sheet flexibility and supported returns to shareholders. Throughout the year, the Board again visited some of our operations. I've spoken in the past about the opportunity this gives each of us to test critical cultural aspects of our company, including the way our people are approaching safety. These opportunities are invaluable for all Board members, and we see them as a key part of our governing role. We visited our Hermosa project in Arizona in the United States in December, Hillside Aluminium in South Africa in February and Worsley Alumina here in Western Australia in May. At Hermosa, we saw firsthand the progress of construction and had the opportunity to meet with local stakeholders. We also learned about the workforce initiatives being developed to support our goal of 80% of Hermosa's workforce being recruited from the local community when fully operational. This will be a significant economic boost to that local area. At Worsley Alumina, directors visited the site of the mine development project, which was the subject of the primary state and federal environmental approval processes that concluded in February. The visit provided an opportunity to better understand how we are complying with the conditions attached to these environmental approvals and view the progressive rehabilitation of previously mined areas. This year, the geopolitical instability we've seen has resulted in a decline in the international collaboration once relied upon to tackle shared global issues. We've also seen uncertainty and significant market volatility due to trade tariff announcements. Unfortunately, our business is not immune from the impacts that arise. Despite these challenges, our strong operating results for the year, coupled with recent portfolio improvements enabled us to deliver underlying earnings attributable to members of USD 666 million. We returned $350 million to our shareholders, including $294 million in fully franked ordinary dividends and $56 million via an on-market share buyback. At the end of financial year 2025, our $2.5 billion capital management program was 94% complete. Consistent with our disciplined approach to capital management, the Board has resolved to extend the program until 11 September next year with $144 million to be returned to shareholders ahead of either its extension or its expiry. These allocations bring the total capital allocated since 2016 to $18.7 billion. In line with the 3 priorities of our capital management framework, approximately 36% of this was spent on maintaining safe and reliable operations, 20% returned by way of ordinary dividends and 41% invested in the business through acquisitions, exploration, share buybacks and special dividends. Sustainability has been central to our strategy since the formation of the company over a decade ago and remains key to the long-term performance of our business. It is simply not possible to responsibly operate in the resources sector without addressing sustainability issues like climate change, water use and biodiversity protection. This year, we published our second climate change action plan that builds on the plan we put to you in 2022. Our plan outlines how we've continued to position our portfolio for the energy transition and highlights the work that we're doing to reduce our operational emissions and support emissions reduction across our value chain while also strengthening the resilience to physical climate risks. We've matured our approach to climate change to reflect the progress that's been made, the lessons we've learned and the risks and opportunities it presents. The intervening 3 years have given us deeper insight into the commercial and technical challenges constraining emissions reduction, particularly at Hillside Aluminium and Worsley Alumina, our highest emitting operations. So often, of course, these challenges require collaboration, which when led by governments around the world, can be a critical enabler in addressing complexities in a sustainable way that achieves a just transition for people and communities. What is apparent is that changes to our climate will result in shifts in climate extremes. And as we continue our climate change journey, there will be challenges to overcome in decarbonizing our business and ensuring the resilience of our operations. To strengthen our approach, we are managing present day risks and embedding climate adaption and resilience plans in our systems and decision-making. Over the course of the last couple of years, the Board has been focused on succession, both for management and for the Board. In May, we announced that Matthew Daley will be joining us as Deputy Chief Executive Officer in February 2026, and that he will assume the role of CEO when Graham steps down, an event we expect to be late next year. It's important to note that February is not a CEO succession event. It's the beginning of a period that will allow Matt to get to know our people, our assets and our shareholders. This timetable has been led by me and carefully planned by your Board. It reflects the fact that South32 is a complex company with operations that span underground mining to world-scale alumina refining and aluminium smelting. We have a diverse commodity mix and a geographic spread. In many of the countries in which we operate, stakeholder relationships are critical to our success. Many of those relationships have been led personally by Graham and have been developed over more than 10 years. As they transition to Matt, they will be handled, as you would expect, with care and respect. This is very important to our business around the world and therefore, to the preservation and protection of shareholder value. It will take some time. And during this period, Graham will lead the company with the same level of focus and commitment he's shown from day 1. This is a rare opportunity and one that's only possible with 2 people, Graham and Matt, who see this as a unique opportunity to set Matt up for success and for Graham to leave the company that he's been so effective in leading in the best possible shape. Just as a decade on, it was inevitable that there would be a plan put in place for management change, so too have we continued to refresh the Board. We've done this in a methodical way by staggering retirements to ensure South32 continues to benefit from a mix of long-serving directors and those who are new to the company, bringing with them fresh perspectives. Today, we farewell 2 founding directors, Frank Cooper and Futhi Mtoba. As the inaugural Chair of our Risk and Audit Committee, Frank brought deep expertise in finance, in accounting, in compliance and risk management to guide us through our first decade. He's provided strong and steady leadership and helped the Board steer our strategy and capital management with confidence. Futhi has brought her deep knowledge in finance, economics and public policy to strengthen the work of the Risk and Audit Committee. Her strong voice in corporate social responsibility, along with her South African perspective, has been important to our work. South32 has been better for their contributions, and I thank them both for their tireless work. Would you join me in doing that? As we farewell Frank and Futhi, we also welcome 2 new directors, Stephen Pearce and Mandle Msimang. Both are seeking your support for election today, and you'll shortly have an opportunity to hear from them. And finally, on succession. We announced this morning that after 8 years on the Board and almost 7 as Chair when I retire, this will be my last Annual General Meeting, and that Stephen Pearce will assume the role in February of 2026. The decision to implement Chair succession at this time reflects the timing of CEO succession that I laid out earlier. It means that Stephen will have the opportunity to work with Graham for a significant part of next year and then oversee the transition to Matt when that takes place. This will mean we'll have continuity in the lead up to CEO succession and beyond. It is our view that this is the best way of ensuring we have a well-ordered succession transition for these 2 leadership roles. It reflects careful consideration of what we believe is in the best interest of South32 and all of its stakeholders, including, of course, our shareholders. Stephen has more than 35 years of financial and commercial experience in the mining, oil and gas and utilities industries and is well equipped to lead the Board as South32 moves into its second decade. Importantly, he brings a skill set that is complementary to Matt, and I'm delighted to be passing the baton to him. For my part, my work with South32 has been nothing but a privilege, and I thank you for that honor. That work was made easier by the governance foundations put in place by our first Chair, David Crawford, who sadly passed away at the end of last year, by our founding directors, 3 of whom are on the stage with me today and of course, by all of the members of the Board. We celebrate the 10th anniversary of South32 with a sense of pride for what the company has become and excitement about the opportunities which lie ahead. Our industry has an important role to play to supply minerals and metals critical for the world's energy transition. And at South32, we are focused on playing our part. We embrace the challenge and the opportunities it brings for our people, our business and our communities right around the world. Of course, we cannot do that without the support of our investors. And for that, I thank you. My thanks to all of our stakeholders and the communities where we work. Most importantly, my thanks go to the people who come to work each and every day to safely deliver on our purpose, which is to make a difference by developing natural resources, improving people's lives for now and generations to come. Thank you. I'll now hand over to Graham.

Thank you, Karen. I also acknowledge the traditional owners of the land in which we meet, the Whadjuk people of the Noongar nation and pay my respects to the elders, past and present. Thank you for joining us today. 2025 has been a significant year in our 10-year journey. As Karen mentioned, the South32 you see today is very different to the one that was formed in 2015. From 50% of our underlying revenue coming from our aluminium value chain and base metals compared to approximately 90% today, but one thing that hasn't changed is our focus on safety. In September 2024, we were devastated by the death of José Luis Pérez, a contractor, who was fatally injured after he fell from height at Cerro Matoso. I speak for everyone at South32, when I offer my deepest condolences to Mr. Pérez's family as they grieve their loss. I visited Cerro Matoso after the incident and the sense of sadness and loss among the team was profound. Together with Mr. Pérez's employer, we have provided counseling and support, including to his family. The investigation was carried out following the incident and the finding and lessons learned have been shared across our operations. We owe it to Mr. Pérez to learn from this incident and do everything we can to prevent incidents like that from ever happening again. Embedding a culture where the health, safety and well-being of our people is at the heart of everything we do is essential. We do this through our safety guarantee which aims to create a sense of chronic unease, reducing complacency and our tolerance to risk. We also do this through our global safety improvement program, which includes our LEAD Safely Every Day program, which seeks to build safety leadership across our business. Almost 16,000 of our people have taken part in this program since its launch. This includes over 95% of leadership roles at frontline and frontline employees FY '25, and it has contributed to sustained improvements in our safety performance. This year, our lost time injury frequency and our total recordable injury frequency, both decreased by more than 25% compared to FY '24. And our significant hazard frequency increased by 61%, which indicates a more proactive reporting culture and improved hazard awareness. As well as physical safety, we also recognize the importance of psychosocial safety for our people, and we've developed a new framework to manage psychosocial risks, which we're rolling out across our operations in FY '26. As Karen mentioned, Matt Daley will be joining us as Deputy CEO in February 2026. Matt is currently the Technical and Operations Director, Anglo American, with extensive operation and leadership experience, and I'm confident he's the right person to take our business forward as CEO when I stepped down later in 2026. In the interim, I'll continue to lead our business, including our work to deliver our global safety improvement program and the ongoing transition of our portfolio. Since 2015, we're focused on positioning our portfolio towards minerals and metals critical to the world's energy transition. In the first quarter of FY '25, we divested Illawarra Metallurgical Coal for up to USD 1.65 billion, which has reduced complexity in our portfolio and unlocked capital to invest in our higher-returning growth options. In July, following a strategic review in response to structural changes in the nickel market, we announced we had entered into a binding agreement to divest Cerro Matoso with the transaction expected to complete in late 2025, subject to the satisfaction or waiver of certain conditions. We invested USD 517 million at our Hermosa development. We have commenced sinking of the main and vent shafts and construction of the process plant at the large-scale, long-life Taylor's zinc-lead-silver project. In May, we reached a key milestone in the FAST-41 federal permitting process when the U.S. Forest Service released a draft environmental impact statement with the final EIS remaining on track for the second half of FY '26. Hermosa has bipartisan support to help meet the United States critical mineral supply. Beyond Taylor, the Clark battery-grade manganese deposit has a potential to support an emerging North American EV market. We're also progressing exploration at Hermosa's regional scale land package. We upgraded the mineral resource to the Peake deposit, where exploration results support the potential for a copper dominant mineralized system. And we're continuing studies on the potential to add copper production from Peake using the infrastructure established for Taylor. At Sierra Gorda, there is potential to grow our copper production through brownfield expansion projects, at the Catabela North East exploration project, where all 18 exploration holes have intersected significant copper mineralization. Looking outside of South32, we have seen geopolitical tensions, conflicts and trade wars contribute to market volatility. We continue to focus on the factors we can control, by delivering strong operating performance and through our disciplined approach to cost management and capital allocation. We increased our production of commodities critical to the energy transition and exceeded FY '25 production guidance, underpinned by annual production growth of 20% in copper and 6% in aluminium. This has enabled us to capitalize on improved commodity prices with our underlying EBITDA increasing by 7% to USD 1.9 billion. And we finished the year with a net cash position of USD 123 million. In August, we announced we are limiting investment in Mozal aluminium as we do not have sufficient confidence that we'll have sufficient and affordable electricity supply that will be secured by March 2026 when the current agreement expires. Despite our efforts, negotiations have not progressed to provide the confidence. Without the required electricity supplier, we expect the Mozal aluminium will be placed on care and maintenance at the end of the current agreement. We completed the safety recovery of operations and resumed export sales in Australia manganese following the extensive damage caused by tropical Cyclone Megan in March 2024. More than 317,000 hours were invested in the wharf recovery and rebuild with more than 970 tonnes of steel and 740 tonnes of concrete removed from the seabeds, and a critical bridge connecting the northern pits of the Western Leases mining area and the processing plant was also rebuilt. With the operational recovery plan now complete, shipments have ramped up in quarter 1 FY '26, and we're now working on options to extend GEMCO's mine life. At Worsley Alumina, primary environmental approvals received during the year have enabled us to start mining new bauxite areas under the Worsley Mine Development Project, which is expected to sustain production until at least FY '36. We remain focused on growing our base metals production, and today, we're directing 100% of our capital expenditure to transition metals. We've also invested USD 35 million in our greenfield exploration opportunities in Australia the U.S., Canada, Argentina and Namibia as we work to discover our next generation of base metals mines. Karen spoke about the release of our second Climate Change Action Plan or CCAP. Climate change is fundamentally reshaping our industry from the commodities we produce to how we produce them. While this brings opportunities for us to increase demand for critical minerals and metals, it also brings risk given the energy intensity of metals processing. And in many cases, the technologies we need to reduce hard to abate emissions don't yet exist. Our second CCAP sets out our approach to addressing the risks and opportunities that climate change presents, we have analyzed our portfolio's resilience under 2 scenarios: the sector-specific 1.5-degree scenario and a 2.8-degree scenario. And our analysis indicates economic growth and the energy transition are likely to drive demand growth for almost all our commodities under both scenarios, except for lead. We have maintained our focus on reducing operational emissions and supporting emission reductions across our value chains. In [ FY '16 ], we set a goal of achieving net 0 operational emissions by 2050. And in FY '21, we set a target to halve our net operational emissions by FY '35 relative to FY '21 levels. Despite our FY '25 operational emissions been 1.5 million tonnes of carbon dioxide equivalent lower than FY '21, drought conditions in this Zambezi basin resulted in the undersupply of hydroelectric power to Mozal aluminium, increasing our reliance on coal-fired electricity, which has led to a 2% year-on-year increase in total operational emissions in FY '25. The year-on-year increase in Scope 2 emissions linked to Mozal Aluminium, more than offset the 12% reduction and Worsley Alumina’'s Scope 1 emissions during FY '25, following the conversion of 2 boilers from coal to gas during the prior year. Our portfolio transformation has reduced transition risk and contributed to lowering our Scope 3 emissions by about 80% since FY '19. In FY '25, our Scope 3 emissions were 58% lower than FY '24. This is largely due to the sale of Illawarra Metallurgical Coal in August 2024 and improvements made to the tracking of alumina and manganese sales together with updated emissions factors. Since our first CCAP, we built physical climate risks into our business risk management processes, and we strengthened our capabilities in adaptation and climate resilience. We're implementing a 3-year climate adaptation and resilience plan to improve these capabilities and continuously improve climate risk management. We are also taking action to support our communities to understand their physical climate change vulnerabilities, which we can support more effectively in our planning process. I'd like to offer my thanks to our stakeholders, including governments around the world where we operate for their continued support. And to our people, thank you for your continued commitment to deliver our strategy and live our values. Finally, I'd like to take the opportunity to thank Karen Wood for her service to South32. It has been a privilege to work alongside Karen on the Board for the past 8 years and benefit from her counsel as Chair since 2019. I want to recognize Karen's outstanding leadership of the Board, ensuring it is well placed at the right mix of skills and experience to guide our strategy. Karen's deep industry knowledge, legal and governance experience and strategic oversight has positioned South32 for the future. Her work to engage our stakeholders has been key to how we've evolved our approach to sustainability during her time as Chair and responded to our changing business context. We've been incredibly fortunate to have someone of Karen's caliber and experience in the role, and I know her legacy will continue to shape South32 for years to come. As we enter our second decade, our outlook is positive. We're focused on maintaining safe and reliable operations while remaining resilient as we navigate potential market uncertainty with a strong balance sheet, we're well positioned to increase our supply of minerals and metals critical to the world's energy transition and deliver returns to our shareholders. Thank you. I'll now hand back to our Chair.

Thanks, Graham. We'll now move to the formal items of business. Each resolution and the explanatory notes are outlined in the Notice of Meeting dated 17 September 2025. As well as consideration of the financial statements, the business before us today includes 6 ordinary resolutions. As set out in the notice, other than in respect of resolutions in which they have a personal interest, the directors recommend shareholders vote in favor of all resolutions. I intend to vote all undirected proxies that I hold as Chair in the same manner. We'll work through each resolution in order, and as I mentioned, we will display the summary of proxies received for each item of business. I'll also invite questions on each resolution. The first item of business is to receive the financial report, directors' report and auditors' report as set out in the company's annual report for the financial year ended 30 June 2025. While we're not required to approve these reports, we are tabling them for discussion. As I mentioned earlier, we have Jane Bailey from KPMG with us and available to answer questions relating to the audit. Before I move to ask if there are questions or comments on the financial report, the directors' report or the auditor's report, I would like to respond to questions submitted by shareholders prior to the meeting. I'm just going to cross to Belinda, who's collected those questions and ask her, if you would, Belinda, to take us through.

Thank you, Chair. Our first question is from [ Mr. David Timothy Brause ] in relation to the federal government's list of critical minerals. What minerals that South32 produced would fall on that list of federal government critical minerals?

Thanks, Belinda. It's been a good week for critical minerals around the world. Look, the Australian government does classify 31 resources as critical minerals, and we produced one of those in Australia. That's manganese, but we produce another 2 elsewhere, nickel and molybdenum. The government, in addition to that list of critical minerals, also has a strategic minerals list with 5 key materials and South32 produces 3 of those: aluminium, copper and zinc. So we think we're well positioned.

Thank you, Chair. Our next question is from [ Mr. James William Harlan ]. Following the divestments of Illawarra Coal and Cerro Matoso, South32's remaining portfolio is increasingly concentrated in jurisdictions such as Australia, Southern Africa and the Americas. How does the Board evaluate geopolitical concentration risk? And are there criteria in place to guide future investments or divestment decisions based on sovereign stability, trade exposure and ESG standards?

Thanks, Mr. Harlan for your question. This is all part of the analysis that the Board does on anyway that it deploys capital. And obviously, that deployment of capital is consistent with our strategy, which is all about the commodities required in a low-carbon world. As we do that, we're always guided by what options we might have available for high-quality operations in commodities that have both a strong and a sustainable outlook and in jurisdictions where we can operate, not only in line with our values and our code of business conduct, but also the way in which we approach our environment, social and governance responsibilities. And we think we do that well. I mean notwithstanding the concentration that you mentioned and that is right. We still remain geographically spread, diverse with multiple opportunities, both in terms of projects and commodities in the United States, in Chile, in Argentina, Brazil and Canada.

Our next question is from Toprock Australia on Sierra Gorda. Given copper near USD 5 per pound, what are the production and grade assumptions underpinning FY '26 guidance and how sensitive is EBITDA to plus or minus 10% copper price changes? And on Hermosa, what percentage of the project's capital budget has been committed? And when does South32 expect commercial production has management stress tested Hermosa's economics against current U.S. cost inflation and permitting delays?

Thanks, Belinda, and thanks to the folks from top rock for asking the question. I am going to ask Graham to comment on the specifics of the copper question from Sierra Gorda. Just before doing so, though, say that the acquisition of our interest in Sierra Gorda has been incredibly positive. I mean you've seen the contribution it makes to results. So we're delighted to have that exposure, and it's performed well and we expect it to continue to do so. Graham.

Thanks, Karen. Look, Sierra Gorda, I think it's -- we bought Sierra Gorda because obviously, we have a strong interest in copper. And if you look at the supply-demand fundamentals over time, we do expect there will be grade degradation in existing operations, operations that go out of business and the supply for copper is strong, which is going to provide attractive pricing. We have got our guidance out there for Sierra Gorda this year. The way I think about Sierra Gorda is where over the next couple of years, we have relatively consistent production, but we do have the opportunity to increase our production by about 20% by investing in what's called the fourth grinding line at Sierra Gorda, which will lift up production by about 20%. Likewise, as I mentioned in my opening speech at Catabela North East, we've had 18 holes we've put in the ground. That have all intercepted high-grade copper, which means we have the option to extend the mine life of Sierra Gorda as well. And on top of that, we have about 110 million tonnes worth of oxide material on the surface, which has a grade of about 0.36 that we're looking at different ways to process that. So I think, Karen, in response to the price, we'd expect a strong price to continue, but plenty of opportunities to grow as that continues to go in that direction.

Thanks, Graham. The second part of that question was to do with the Hermosa project, where we have awarded a considerable number of the capital packages all consistent with the final investment decision that we published at the time of approval. But clearly, there's more to come before that project is complete. We remain confident about first production for the second half of FY '27. To date, we haven't seen a material impact from either U.S. tariffs or indeed U.S. cost inflation, although we continue to look at that and as you would expect, monitor it very closely. On permitting, you might recall, Graham mentioned when he gave his address about being the first mining company in the United States to receive FAST-41 status. That has been tremendously important to us, came in with the Biden administration has been continued under the Trump administration. And basically, that has allowed us to expedite the approval process. So federally, that's been incredibly important. We do have all of the state permits that have now been received. And the U.S. Forest Service has released the draft environmental impact statement, which is obviously a key planning milestone.

Thank you, Chair. Our next questions are also from Toprock Australia, on Cannington and silver leverage with silver at 14-year high, what is Cannington's realized silver price versus spot? And what hedging or sales constraints limit upside? How long is current mine life at Cannington at existing cutoff grades and is a reserve upgrade expected? Is South32 evaluating expansion or processing upgrades to capture higher silver prices? And on capital allocation and shareholder returns, given the significant rise in cash flow, will South32 reinstate or expand the buyback program in FY '26? What payout ratio will govern dividends of EBITDA exceeds USD 2.5 billion this year and how will management balance reinvestment in growth assets versus distributions during a commodity super cycle?

That feels like a board agenda for a year, doesn't it? I'll get Graham to just comment on the order of magnitude about silver prices. But look, Cannington today has a reserve life of 6 years, but the team are doing a huge amount of work to see if that might not be extended. It has been a magnificent asset, for South32, I mean, not least because of the silver prices that we've been enjoying more recently. So a huge amount of work going into making sure that we can continue that operation for as long as possible. Our silver there is sold at market prices, we don't hedge consistent with our portfolio risk management policy. Let me just jump to some of the capital management questions. And then, Graham, I'll come back to you, if you don't mind, just to talk about that order of magnitude on prices. Our capital management framework has been unchanged since the formation of the company. First priority, maintain safe and reliable operations and an investment-grade credit rating. Second, to distribute a minimum of 40% of underlying earnings as ordinary dividends. And then third, to put other opportunities to internal competition. So by that, I mean, how do we use excess capital? Do we reinvest in new projects? Do we acquire new assets? Do we do greenfield exploration? Do we spend some on share buybacks? Do we spend some on special dividends? So that's the hierarchy in which we go through our capital management. And as I say, it's unchanged since the formation. But Graham, silver.

Yes. Thanks, Karen. Look, so silver was an interesting one. If you look over the last 3 months, it's probably up about 24%. Today, it's trading at about $48.55. Obviously, it follows gold as a proxy, and in terms of uncertainty there's large movements. Our shareholders, we don't hedge to Karen's point, we're probably net of RCs, TCs were about 1% of the index price that you see out there. So we pretty much realized the full price benefits of that. Last year, we probably run at an average silver price of about $31.90. So obviously, it's positive at the moment, but volatile commodity. I think more importantly, for us, it's about how do we extend the life of Cannington. Cannington has been around now for about 27 years. I was actually there when we built Cannington and funny enough, we had a silver price of $4.50. So yes, our commodity prices can actually move. I think we shouldn't discount that, Taylor also has volumes of silver. It's a zinc, lead and silver mine. And the other commodity that's moving strongly over the last 3 months is zinc, which is up by about 18%, and certainly, a commodity that we believe over time has the same fundamental opportunity as copper in terms of supply dropping off and demand continuing to increase. And again, if you look at the economics at Taylor today and you run the current zinc and silver price to considerably north at the time when the Board approved the project.

Thanks, Graham. Belinda?

Thank you, Chair. Our next question is from Ms. Natasha Michelle Lee. The total significant hazard frequency has increased from 122 to 196. Could you advise what has caused this increase and what actions are being taken to reduce hazards?

Thanks, Ms. Lee, for your questions, sort of somewhat counterintuitively, that's actually a good outcome and an outcome that the Board feels very positive about. Taking account of significant hazard frequency is a leading indicator. And it's leading because it gives you some insight into the extent to which people at the operations are identifying hazards to enable us to address them before they become serious issues. And I think this is showing how well entrenched the focus of the program Graham spoke about earlier, the LEAD Safely Every Day program is actually being rolled out around the business. The fundamental piece of that program is for each one of us to be able to guarantee our own safety and the safety of those with whom we work. And when that becomes how you approach everything you do, in your work, then we think you've got to be more alert to the themes that might be hazardous to get them reported and to get them dealt with. So the Board has taken a lot of confidence by the increase in that frequency rate, and it's obviously something we need to continue to monitor. I did speak earlier about the visits we make to our sites around the world. And one of the really important pieces of that is the opportunity we all have, as members of the Board, to talk to people. They might be contract gardeners or they might be people running some of our complex pieces of machinery. But when you're able to meet them on-site and talk to them about how they're thinking about safety, what the guarantee means to them and how they're thinking about identifying hazards, as I say, it gives us a great deal of confidence that this program is really gaining traction around the business.

Our next question is from [ Mrs. Angela Newton ]. Is there a proposal in the future to buyback small shareholdings from investors.

[ Ms. Newton ]. Again, thank you for your question. No, we don't have a plan to do that. I spoke earlier about the on-market share buyback that we have in place, but we don't have a facility to buy back small shareholdings from investors.

Our next question is from [ Mr. Thomas Roe ] and relates to reinvestment options to be included in the company employee share scheme.

Look, I know a lot of companies do have dividend reinvestment plans, and I assume that's what you were meaning, Mr. Roe. We think that's a costly way for us to raise capital, so we don't have a plan of that kind. But of course, shareholders can apply the dividend payment to buy shares if they wish to do so.

Thank you, Chair. Our next question is from Mr. Michael Lancaster. Why are these shares doing nothing?

Thanks, Mr. Lancaster for your question. Look, share price is influenced by so many factors. I mean, if you were just watching the market this week following very successful meeting our Prime Minister had in the United States. We can see what happens as a result of some of those international factors. So commodity prices obviously move around broader economic conditions have an impact on this. What we have to do as a Board is to focus on maintaining our operating momentum and capitalizing on the transformed portfolio, about which both I and Graham spoke earlier. We have to do that to deliver growth and returns for shareholders. So over the last year, we have seen an enormous amount of geopolitical tension that has increased. Volatility, we did the trade tariffs on their own, certainly did that in a very significant way earlier in the year. But I would say that despite those headwinds, we have delivered strong operating results and continued with that critical work of transforming the portfolio.

Our next question is from Anusha Hashimi. How does the Board justify granting extra awards to the Executive Director and incoming Deputy CEO when shareholder returns remain under pressure? And what proof is there that these awards are tied to long-term value creation rather than internal reward.

Thank you for the question. There are 2 pieces here. The awards to Graham, that is one of the resolutions for consideration today under the long-term incentive plan, and the awards that we're making to our incoming Deputy CEO, Matt Daley, as part of the arrangements we've made for him to join the company. Let me deal with that piece first. So the elements that we're asking for you to approve today format are designed to partly, and I stress partly not fully, but partly compensate him for benefits that he's giving up as he leaves Anglo American. Some of that is paid in cash. Some of it is in equity. Some of it is time-tested equity, and some of it is subject to our long-term incentive plan. Where the pieces tied to our long-term incentive plan, then obviously, it works against the measures of that plan, currently, 80% tested by relative total shareholder return and the remaining by reference to 2 strategic measures. The piece that's time-tested is to compensate him for what he's actually giving up in part by leaving Anglo. As we went through this process, we wanted to make sure that we had proposition to Matt that was sensible against the market that, obviously talk the interests of shareholders into account, and that's why we landed on the structure we did. I should also say that one of the changes led by Wayne as our Chair of the -- that side of our remuneration committee, was to increase the minimum shareholding requirement for the Chief Executive. It was onetime salary. That's now been increased to 4x salary or 400%, which we think is a really important initiative to make sure that our leadership roles are aligned to the shareholder experience. I mean Graham obviously continues to serve as CEO, up for consideration today are the awards for him under the long-term incentive plan. And as I said earlier, they will be governed and judged by the performance over the period. I should also just add to that, though, that Graham's award that we're asking you to approve today will be prorated down to reflect the actual period of service that he gives up to the date of his retirement when that might be.

Thank you, Chair. Our next question is from Ms. Celestine Margaret Eckrich why grant awards to executive director and incoming deputy. These salaries are already generous and as a new deputy performance record at South32 has yet to be established.

Look, I think I covered that in my earlier answer, Ms. Eckrich.

The next question is from Mr. Thomas Roe. When will the company reduce remuneration packages of Senior Executives and the Board to no more than 10x the annual wage of the lowest paid worker or contractor.

Thanks, Mr. Roe for your second question. Look, this is a question we often get. And my answer always is we have to structure remuneration packages that are designed to attract and retain the best people in the business. And we think that we've done that. We do need to be competitive. It's the reality of the world in which we operate. And I know there's a huge amount of interest in metrics of this kind, multiples, and I understand why. In fact, that CEO pay ratio is something that we do disclose. If you have a look at our data book, our sustainability data book, you'll find some information about that in there and you can find that on the website. So I certainly understand the question, but the reality of the world in which we live is that we do need these competitive packages to not only bring people into the organization, to serve the interest of South32 and its shareholders, but also to retain them.

Our next question is from Mrs. Susan Jane Oaks. Are you allowing activists to drive a climate change agenda?

Thanks, Mrs. Oaks for your question. The short answer to that is no. Our strategy right from the outset, 2015 was to focus on commodities that will have a future in a low-carbon world and to operate our business in a way that contributes for our part to the reduction of emissions. I mean that is just good business sense. It's based on sound economic principles. And you'll see that articulated in the second climate change action plan that we are asking you to consider today. I mean I think one of the great benefits of a company, if you like, being formed as recently as ours, is that the founding Board and Graham, we're able to think about these critical issues on climate and the role we have to play in the context of the company's strategy. And so they are intertwined. They're linked. And as I say, we think it makes good economic sense for the organization.

Our last pre-submitted question is from Ms. Natasha Michelle Lee. To what extent has the company considered or installed renewable energy such as solar or wind turbines to supplement the electricity supply used in mine sites, excluding the battery electric vehicle trial?

Thanks, Ms. Lee, and I'll get Graham to comment if I miss any of this. I mean renewable energy is a key part of our energy mix. And again, since 2015, assessing renewable energy options has been a key part of how our leadership around the organization has operated. A 3-megawatt solar plant was installed in Cannington, I think, in Queensland, Graham, in 2019?

Correct.

So that's obviously very important. We do have renewable energy supply contracts for the Alumar smelter in Brazil. We have been pursuing options renewable power for our Hillside smelter in South Africa, I mean that's a critically important one for us because Hillside accounts for 58% of our Scope 1 and 2 emissions. And so that is one we absolutely have to solve for. I know work has gone on at Worsley to try and assess renewable options there. What have I missed, Graham?

Yes. Probably the only one would be, Karen, obviously, at Mozal, traditionally, we've had a hydro water source there. But at the moment, the Zambezi River been at low levels, we are not getting the same supply. We use about 950 megawatts of Mozambique, and we probably get about 350 at the moment over the next 2 years from the Cahora Bassa.

Thanks, Graham. Belinda, that's the end of our pre-submitted questions. Thank you.

Before I go on to the remaining items of business, I will, of course, invite questions from the floor as we ordinarily do. But before doing so, if you'd indulge me, I would like to comment on the resolution seeking approval for our remuneration report. We announced before the meeting that the report did not receive the required 75% vote in favor from our shareholders. Some of you may be aware that 3 of our proxy firms who advise some of our shareholders recommended a vote against the report. The reasons offered deferred. There was some concern that the measures that form part of our short-term incentive plan and the outcomes were not sufficiently clear. There was also a view that we had too many measures. Over recent years, we have endeavored to reduce the number of measures and to progressively add to the explanation for outcomes. I know this is work that Wayne as Chair of the Remuneration Committee has had underway. And there has been some considerable progress in that work. But we do accept that there's more we can do. And I know that under Wayne's leadership, the Remuneration Committee, will take the comments that have come back from shareholders into account as they think about what changes might be able to be made to those disclosures next year. On our long-term incentive plan, there was some commentary, with some shareholders taking issue with the inclusion of the 2 strategic measures that I spoke about earlier, accounting for 20% of that outcome, with 80% continuing to be assessed against relative total shareholder return. This was the first year the strategic measures were assessed. They were introduced in 2022, run over a 4-year period. So this was year 1. We do respect the differing views on how long-term performance should be assessed. But we think that at this stage of South32's life, 20% allocated to strategic measures makes sense. But as always, we remain open to feedback on the best way of reporting performance against those measures. And then finally, some shareholders objected to the decision by the Board to increase the Chief Executive's remuneration, Graham's remuneration. In explaining that decision, it's important that I go back to the succession plan for Graham that I spoke of earlier. While Matt will join us as Deputy CEO in February, he won't succeed Graham until late in the year. Graham will continue to lead the company, giving Matt the opportunity to get to know, as I said earlier, our complex business, spanning underground mining to world-scale alumina refining and aluminum smelting and operating in a diverse set of countries with a diverse commodity mix. It also allows Graham to transition some of the critical stakeholder relationships, especially at senior government levels that are so important to our success. These were all important considerations when we made that decision. What we found was that Graham's pay had fallen behind the market. He's enjoyed only modest pay adjustments since 2015, and none of them were designed to reflect the considerable skill and experience he's acquired over the decade. We know from the work we did in bringing Matt in that his remuneration package was market competitive. And I must say I'm very pleased to see how strongly shareholders supported the grant of awards to Matt as they have for Graham. Before I move to the remaining items of business, why don't I take some questions, perhaps from the floor first and then Belinda, I'll come to you to see if there are any online. I will, of course, take questions on each of the items of business as we work through them. Anything from the floor? Ms. Wolbak, welcome.

A recent report by Market Forces identified South32's Worsley Alumina facility as the second largest manufacturing gas user in the country last year, with gas use accounting for just under half of Worsley's operational emissions. South32 states that its interim plan for reducing emissions at Worsley is to switch its coal boilers to gas boilers with its medium-term plan for the 2030s involving a transition towards electrification powered by renewables. This will likely substantially increase gas use at Worsley in the short to medium term. In financial year 2024, WA gas prices were 2.5x higher than they were 10 years ago. This is despite gas production that is supply in WA more than doubling over the same period. Given the significant financial risks associated with continued reliance on gas as a primary fuel source, including rising gas prices, network costs and ACCU purchases under the safeguard mechanism, is South32 looking into setting quantitative targets to reduce gas use at Worsley Alumina by 2035, 2040 or indeed even earlier?

Yes. Thank you for your question. And as Graham indicated earlier, the transition of the 2 boilers at Worsley to gas was certainly part of the emissions reduction strategy for that asset. We hope to continue that because, frankly, moving to gas does mean that we have a significant reduction in emissions, which is very important. I certainly take your point about prices. Graham, you might actually want to comment on that because it does have an impact.

Yes. Look, Karen, and to Karen's point, we have 5 coal-fired traditionally boilers that provide us to generate steam for the process. We have converted, obviously, 2 of those from coal to gas, and that a drop of about 10% on our Scope 1 emissions. So the coal to gas made a downward trajectory. So that's a step change in the right direction. Do we think gas is the ultimate solution for Worsley? No. So we're still committed to halving our Scope 1 and 2 emissions by 2035. So we continue to study other ways to reduce our profile at Worsley. I think the other thing around Worsley is that coal supply that we actually use, we share with the WA government, they have the same suppliers. So we actually work very closely with the WA government as we actually transition our way out of coal to gas and then another ultimate solution because the economies of scale mean that both the current coal producers need both customers to be viable. We would not like to go, for example, from coal to gas super quick and then have both coal-fired suppliers collapse and then the government's power stations no longer have suppliers. So we're trying to work very closely how we transition, but our plans are to half our Scope 1 and 2 emissions by 2035. And we have teams continuing to work on that.

So does that mean you're saying that you -- the quantitative target to reduce gas use at Worsley Alumina is to reduce it by 50% in the 2035 to 2040 period?

Across our business, we have the global target, but all our targets are applicable to the assets that we're pushing to that direction. Now we still need to develop a plan because part of the solution -- well, when I say plan, we've got things in process but it requires the electrification of the grid in the Southwest and some other infrastructure that doesn't exist today, but we continue to engage with various different options around renewables and how that will transition over time. But to be clear, if we -- each coal-fired, we go to gas, and again, gas isn't the ultimate solution, drops our emissions profile by about 5% at Worsley.

Sorry, what was that? Last 5%.

5% for each one we convert from coal to gas, roughly. They're slightly different in configuration.

Well, that's coal to gas.

Coal to gas. Yes.

I'm sorry. Can I ask a follow-up question? Is that all right?

Sure.

Has South32 estimated how much the interim coal to gas switching will increase gas use at Worsley Alumina over the next 10 years?

Want to take it, Graham.

So look, if I look at the broad numbers and think about we did the conversions roughly -- so these aren't the exact numbers, but it will give you the ballpark. We did the conversion roughly over 12 months ago, and we used to have probably more than 50% of our power supply by energy source. So gigajoules would have actually come from coal. In '23, it was 57%. Gas was 42%. Today, it's kind of switched to the other way, where gas is around 41% last year -- sorry, coal was around 41%, and gas is around 57%.

57%.

Yes. So that's a switch of the two.

So that gives you an idea of what you're going to be doing over the next 10 years? Is that what you're saying?

Correctly. So to continue to reduce it. But again, it will be very dependent on working closely with the WA government about how they transition down there as well.

Chair, may I introduce Alice Clark.

Ms. Clark, welcome.

My question is the Western Australian Environmental Protection Authority recently received over 59,000 public responses during Alcoa's public comment period, a new state record, which reflects the widespread public concern about deforestation and biodiversity impacts in the Northern Jarrah Forest. How does South32 plan to address the mountain community pressure and environmental concerns about deforestation in the Northern Jarrah Forest and reputational risk as a result of bauxite mining, losing its social license in the area?

Thanks, Ms. Clark. I appreciate the question. And of course, I'm not familiar with the Alcoa crisis. But I do acknowledge the community concern that has been raised about this. And of course, we went through a very long process ourselves for the new permits. We've been operating in that region for more than 40 years. As you know, we're one of the largest employers in that part of the country. And that work that goes on at Worsley is an important part of the production of aluminum, which, of course, is critical to the energy transition. We did get Federal approval in February, and we think the conditions that are attached to that approval for South32 are strict. We think that they are designed to avoid and minimize impact to native vegetation and to the habitat of species. They do require us to progressively rehabilitate the land we clear to put in place protected areas and buffer zones around known habitats. It does include putting 8,000 hectares aside to be restored to create additional habitat for the Black Cockatoo, which is obviously an important species in that part of the country. Through that long process, there were a number of changes made before the final permit was granted. The area that was to be cleared of native vegetation was significantly reduced by about over 40%, 44%. We certainly agreed that we should avoid clearing land of high environmental value. And the protected areas were increased by a very significant amount, around 90%. So I don't want to dismiss the concerns. I know they're real. I know they're genuinely motivated by care, for this part of the country. But we think we have been responsibly operating there for a long period of time, and we think the new permitting allows us to continue to do that.

Chair, may I introduce Paul Slyth?

Hello, Mr. Slyth, welcome.

Thank you very much. Very much appreciated and certainly honored to be able to speak here on these subjects, but I believe it is very important that South32 understand 4 issues I'm raising here, mostly relating to the -- first, I'll read them out as I've written them. Because of the close relationship with Alcoa, will S32 apply to the government to gain benefit from the government as Alcoa has just been awarded $3 million for processing gallium, a critical metal required for FCEV vehicles, truthfully giving 0 pollution as compared with EV that failed to give 0 pollution, actually adding pollution. That's the first one.

Should we take these in turn? Why don't we do that? Should we take them in turn and then I don't have to remember the four question. Yes, I'll take this one, and then I'll come back for your second one. Is that all right?

That's all right.

Okay. We're still getting our heads around the announcement that was made earlier this week. I mean certainly, it's exciting for Alcoa. But Graham, have you got anything you wanted to add to that?

Yes. Look, obviously, we're watching with interest because we have done some research on gallium as well and also done some of our own work in the Southwest around that. Alcoa is one step ahead of us. We recognize that. But in saying that, we have also been working with the U.S. government on a number of other fronts. For example, as Karen mentioned, we're the first mining project in the FAST-41 for the Hermosa opportunity, the Clark deposit, which is manganese, we've got funding from the Department of Defense in the form of 1/3 of paying for the decline in the bulk sample, and they're probably going to contribute somewhere to 30% to 40% of basically the processing facility for that. And the last piece, about 2 weekends ago, we completed an agreement with the U.S. government around them taking an equity stake in our project in Alaska to help build and facilitate a road. So we do obviously have a list of different priorities. We're ticking through those. Gallium will continue to look at and study. But Alcoa probably one step ahead of us on that, but we've probably got 4 other things that are much further advanced.

So you can process?

We have looked at it. It's not without its challenges, to be perfectly honest, but we continue to work through that as an option.

It's in the basic mineral. Okay. The second question is, now Woodside and Japanese agreement has been approved by the WA government to provide liquid hydrogen to Japan. This will open up in 2 years, availability of hydrogen for use in WA. Will S32 change equipment to FCEV set instead of EV that cause pollution?

Graham?

Look, I think if hydrogen comes into the energy mix in WA, we'll welcome it, and we'll look at all the opportunities that come with that across a broad spectrum of energy generation.

It's a very important issue, though.

Yes.

The next one is Japan has now commissioned an osmotic power to drive their desalination plant, providing 24/7 base power. Has S32 considered this issue?

So was that small nuclear reactors?

It's called osmotic power. It's just coming. It's been about a week ago, they announced it.

Yes. So we have looked at things more for the smelters in Southern Africa around small nuclear facilities, which generally have come out of Japan. So we are looking at continued energy sources. Again, we'll have a look at that new one that comes out. We certainly, as I mentioned earlier, particularly in the Southwest, have a medium- to long-term challenge around power supply and security. So all that new technology, we have a team that's across constantly looking at the opportunities.

So effectively, what it is, it's changing from 1 density to another. And apparently, this causes a extreme high pressure, which then drives turbine, and that generates electricity. So that's a very important issue that's available now if the government might want to think about at.

Yes. We'll take it onboard.

You might want to when we have afternoon tea, nab Erwin Schaufler, who's sitting here in the front row, and he's going to wave to you. So you know who to speak to. He led a session with the -- the Board met this week and Erwin and his team led a session with us on some of the issues that you're raising on innovation and technology. So he'll be able to give you a little flavor for what we're looking at.

That's fine. The fourth one, of course, is geothermal plant. The largest in Australia is being built in North Perth. This provides 24/7 base power does not require wind turbines, solar panels. Has S32 considered this source of reliable power, which is used internationally around the world?

Yes. So we have looked again at geothermal, but more in the Southern African context. I guess we'd have to look at the infrastructure that goes down to the Southwest and see if we could tap that. The comment I'd make is you're bringing up great ideas, but I think that's a good sign of how this energy space is constantly changing. We're a high energy-intensive business. And obviously, we're looking to reduce our emissions profile. So all these things we look at, and we'll continue to look at.

That's why I presented those issues to you.

Thank you.

Thank you.

Chair, may I introduce John Campbell?

Hello, John.

Chair, John Campbell from Australian Shareholders. We've got, I think, it's 500 and something shareholders' proxies today for about 5.5 million shares. I'd like to congratulate both you and Graham. I'm not sure if we'll have the opportunity to say that to Graham this time next year. But in case we don't, I think there's a lot of kudos that should go to you both over the development of South32 over its 10-year history. I think it was widely regarded as likely to be a basket case when it was launched and demerged from BHP. The share price has increased by about $1 since it launched. And I know that isn't astronomic, but I think there have been benefits to shareholders along the way as well. I'm not sure how it all pans out. But I think the -- given the assets that were demerged into South32 and the difficulty you've had and the demonstration really that active management of those has been beneficial to the shareholders is the lesson that BHP should learn.

Thank you, John. I really do appreciate your comments, and could I also just say, what a pleasure it's been to work with you and your association over the last few years. Retail shareholders are tremendously important to us, as an organization, and we've had a number of opportunities to meet. We don't always agree on some of the issues, but the opportunity to spend time and understand the concerns of retail shareholders that you so ably represent has been very important. And we all remember the names that were -- South32 was called, don't we?

Indeed. Well, I think, too, that I should thank you for the time that you give to us because it is appreciated, and we do our best. My concern would be with Hermosa. The grade there being somewhat less than Cannington, I think, I know it's different minerals involved and different grades there. The investment in Hermosa is going to be about $5 billion, I think in total. It won't be appear that on the balance sheet because you've already written off $1.3 billion of that. But by the time you get Taylor into production, it's going to be that. You're going to have a change, a new Chairman. You're going to have a new CEO and new brooms like to sweep cupboards bar, and that's at the expense of shareholders. And I'm just worried about that. I worry about the effect that the temptation that they'll be there because of the marginality of Hermosa to make big impairments. I wonder if the remuneration plan is really adequate to deal with that, whether it envisages that issue and whether we shouldn't have some form of net profit gate threshold that needs to be met before any financial benefits anyway come from short-term incentive. So I'd like to leave that one with you, if I may. I don't know if it's too late to change the plan to accommodate these things, but it's certainly, we've got the opportunity with a negative -- with a strike. If I get what you said earlier, as being the case. The -- I must say we're supporting your remuneration plan. We think it's fair and reasonable. But I guess that we differ from our competition in the proxy advice department. So perhaps if I could have comment on Hermosa. And I've got also a couple of other questions that I'd like to ask.

No, very pleased to comment on Hermosa, and you rightly say, there are different views out there about what's the best way of measuring performance. I mean what I'd say at the outset is that this is a long-term business. All of us sitting on this stage, all of the executive team here today know that the decisions that we take today are going to be, we hope, reaping benefits for the generations of management teams and Board directors to follow because projects in this sector take a long time. They take a long time to identify. They take a long time to develop. They take a long time to come into their own. And so we think long term about these things. And it's one of the reasons why the long-term incentive plan runs over that 4-year period, why 80% of it is attached to relative total shareholder return. So we get that alignment between the experience shareholders have and the experience management will have. So yes, Graham will retire next year. But he will take equity in South32 into retirement with him, and he will either prosper as all shareholders will as a result of that investment in Hermosa or not. And we think that alignment is so important. So I mentioned earlier, John, the grants that we're asking shareholders to approve today will be prorated down to reflect his period of service, but he'll take that into the future. Now it is true to say the long-term incentive plan has not been lucrative for executives over the last 10 years. It has only vested on 3 occasions, only once at 100%. Once at 38%, and this year at 15%. So it is something that we think means executives and shareholders are aligned. The Hermosa project is tremendously important for the future of South32. And as a Board, we remain very confident about it. It's important, I think, to remember that there are 3 parts to that project. There's the Taylor deposit, the silver-lead-zinc deposit that is under construction at the moment. And we next go up there in early December to look at the progress over the last 12 months. There's the Clark deposit of manganese, and we believe there's a very strong future for manganese. It's one of the critical minerals. So we remain confident about that. And then there's the broader land package that Graham spoke about earlier and where he shared some of the excitement about what might emerge there from a copper perspective. So we remain committed to the project. We think it's the right thing for the future of South32. And we think the structure of the remuneration arrangements in terms of long-term incentives aligns those interests. But as I said earlier, there are so many different views about what the right performance measures should be for a long-term plan. There are those who think 100% total shareholder return should be it. There are those who think we should run with a total return on capital invested metric. There are those who think we should have a gateway. There are those who think we shouldn't have strategic measures equal to 20%, but they should be higher. So we have to make the decision that we think is right for us, and we think we've done that.

Okay. I think my concern really relates to the short-term incentive more than the long term. The fact that you're using underlying profit as -- underlying earnings as the yardstick and adjusted underlying earnings at that reduces the transparency of it, and it allows the situation to occur where the impairments in particular, are excluded from the calculation. And if we have a new boom that decides that he's going to write-off all of Hermosa, then there will be short-term implications for long-term gain because the long-term cost of production would be reduced by the amount of the impairment. And it worries me that there's no real protection there against that eventuality.

And John, I obviously don't -- can't speculate on what might emerge down the track, and Graham has just indicated, he'd like to add a comment. But let me just say a couple of other things. And no one shies away from the fact that not everything has gone perfectly with this acquisition. We had COVID, of course, which curtailed the development, really had a huge impact on us in 2020 and 2021. There was the delay of about 2 years as a result of the dewatering work that had to take place and of course, some inflationary pressure that we've seen. But on the other side of the equation, there are a number of things that have gone very well. Graham spoke earlier about the entry into the FAST-41 process, which has been tremendously important to us, as has the fact that we do have all state approvals now, the work Graham referred to earlier for the Peake deposit, the adjacent copper deposit for Peake, and the funding that has been provided by the U.S. administration. So there are negatives, there are positives. But Graham, you wanted to add a comment?

Yes. Maybe just a couple of ones, John. It's always an interesting one as a CEO and obviously, a Board to approve to make a decision around an investment because it's -- to your point, it's very easy to protect the short term and not take a risk for the future. And yes, when we talk to investors about optionality, generally the sell side, they will love you to have growth options. They hate it when you go into execution and they discount you and then they love you when you come out the other side. And part of that reason is you're building a large mega project over 4 years in the world can shift in terms of inflation and impacts. I think why I would always give Hermosa a tick, and would we buy it absolutely again? Yes, in saying that I think the cost would probably be 3 or 4x what we paid today. It has a long life. Taylor at the moment is 28 years, and it's still open in multiple directions. You're right, Cannington has higher grades, but it doesn't have the life and it can't do the throughput. So Cannington at its best can get up to 2.8 to 3 traditionally throughput. This will be 4.3 to start with. It has 20 years life. It will probably easily add another 10. Then on top of that, you've got Peake, which is a copper deposit, and all the approvals we're getting now and all the infrastructure allow you to add Peake in at probably around a $60 million CapEx cost, and you'll have a copper concentrate come out as well. And then to Karen's point, Clark probably has -- it's a manganese product designed to go into EVs. EV penetration under Trump's administration has slowed down in the U.S. versus what you've seen around the rest of the world and what was happening under Biden, but they're going to come. And Clark potentially has a 60-year mine life. And on top of that, we've got 12 other exploration projects on the property, which are mainly zinc and copper, but we actually can't touch those until we get our federal approval. So once we have those, it will be a much broader program. So if we go into production just for Taylor without all the add-ons, it will be in the first quartile of the cost curve. It will generate strong margins for probably 30-plus years for our organization. And like Cannington has done in the first 10 years, it will probably underpin a lot of our cash flow and growth. The challenge with an impairment is it's at a point in time. And the one thing you can't include in the impairment is all the optionality and length of the mine that I spoke about.

Second question on Ambler. I noticed the U.S. government decision to make the road into the area. And to buy into your joint venture partner there. I was trying to understand what the impact of that was on your shareholding in the quarterly report that you just released. So I'd be interested to know what it will be after the thing settles down. But I'd just be also very interested to hear what Graham thinks about the prospects there and what -- how long it would take, how much it will cost, what sort of minerals that you're able to extract there? And what would be like living up there to do the job?

Well, that's one thing I can talk to you about because I lived in the Northwest Territories of Canada for 3 years in the diamond mine. So I know what minus 50 looks like. Look, I would describe that Ambler district in the northern part of Alaska as largely unexplored territory. And if you think about OECD countries, it's probably one of the last few basins. Now at the moment, we have done some early work out there around the deposit called Artic, and Arctic has about 43 million tonnes. It has copper, zinc high grades, it's shallow. Bornite is a much larger open and pit underground deposit, slightly lower grades. Anywhere else in the world today, those deposits would have been developed. The challenges are about 211 miles or 340 kilometers, if my math is right, from what's called the Dalton Highway, which is what you need to access it. Because it's an unexplored territory and Arctic is a VMS-style deposit, we believe there's multiple deposits up there. Hence, we've pegged a whole lot of land with our partners around Ambler, but we also have another project, about halfway down where the road is coming, which is called Roosevelt, which we have 100%. The time line of this, to be clear, is not tomorrow, the next year. You're probably at best looking about going into some kind of development, 7 to 10 years down the track. The focus for the next 2 years is exploration to try and grow the resource and find more deposits. I think the advantage of having the U.S. government as a partner and this is a commitment to actually build a road, which opens up that district. And it's always been, do you want to spend more money on exploration? Or do you want the road to come? Now we know the road is coming, we can spend more money on exploration. I think the important thing is where the government has taken the stake is Ambler is a 50-50 joint venture between us and a TSX Company in Canada called Trilogy. We owned 11% of Trilogy. We've actually sold 5% of our shares to the U.S. government. They have sold 5% of their shares to the U.S. government. So they have 10% in Trilogy. At the end of building the road, they increased their stake up again based on completion of the road. The money we both made out of the sale to the U.S. government goes to fund our exploration programs for the next couple of years. So for me, it's been a good example of a win-win scenario.

Thanks, John. Why don't we go, Belinda, to the telephones to see if you have any questions.

Just one question on this item. Thank you, Chair. From Mr. Stephen Mayne, when was the external audit contract last competitively tendered? And when will it next be competitively tendered?

Frank, when did we do the last tender?

We haven't done a tender as such, but we have done a detailed review of the audit relationship at the time of each changeover of the audit partner. So we have been through a pretty thorough process, I think, in terms of us verifying that we are very comfortable with the independence of the auditor. We've ensured that we get a fresh eyes look with the new partner coming in together with management that has changed over time. So we're very comfortable with the relationship as it stands. We do acknowledge that from a governance point of view, at some point, a tender will be appropriate, but it's not going to be driven by any necessity that we see at present.

Thanks, Frank. Thanks, Stephen, for your question. Anything else?

No further questions.

Okay. Then let's move to the next item of business, which is resolution 2A, which is for the election of Stephen Pearce as a director of the company. Stephen was appointed to the Board on the first of February of this year and has served as a member of the Nomination and Governance, the Remuneration and the Risk and Audit Committees. And as I said earlier, Stephen has received the unanimous support of the Board to succeed me as Chair of South32 when I step down early next year, a decision which, as I said earlier, I'm very pleased and a role I know he will comfortably fill. He's a highly experienced public company director, and his deep expertise in resources, finance and commercial matters and of course, his operational leadership is highly valued by the Board. We're delighted that Stephen has joined us, and I'd now like to ask him to address the meeting. Stephen?

Thank you very much, Karen, and good afternoon to everyone. Since joining the South32 Board in February, I've had the opportunity to get to know my fellow directors, meet many of our senior leaders and visit a number of our operations. I've also completed a thorough induction to both the Board and the company, and I've actively met with members of management through Board programs and as part of my broader induction. In addition to South32, I'm currently a Non-Executive Director of ASX-listed Ampol Limited and LSE listed BAE Systems plc. My previous executive roles have included Group Chief Financial Officer and Executive Director at Anglo American plc, group CFO and Executive Director at Fortescue Metals Group and CFO of Alinta Energy. I'm delighted to have been appointed to the South32 Board, and I hope to receive your support for my election today. I'm also incredibly honored to have received the unanimous support of my fellow directors to assume the role of Chair when Karen steps down in February 2026. I look forward to building upon her outstanding legacy in that role in due course. I'll now hand back to the Chair.

Thanks, Stephen. Any questions on this resolution? Doesn't look like we have any in the room. Belinda, anything on the phone?

Just one question from Mr. Stephen Mayne. Congratulations to Steve Pearce on being announced as our new Chair today, commencing in February next year. He's obviously a quick learner after only joining the Board in February this year. Was Steve recruited last February to be the next Chair? Or was it a competitive internal process? Today's ASX announcement mentioned a formal process to select Steve as the Chair? Was a search firm involved in the process? And did the process includes searching for external candidates? Did the formal process extend to presentations from multiple internal candidates and a formal internal vote of the Board? If so, did Chair, Karen would run that process herself? Could Steve please comment on his experience of the recruitment process that got him on to the Board in February and the recent Chair succession process that now sees him elevated to the top job?

Thanks, Stephen for your question. And I will cross to Stephen to allow him to comment, but let me just comment on the pieces relating to the process and the Board. So we announced Stephen would join our Board back in December of last year. He didn't start until February, but we certainly made that announcement in December of 2024. And we had a process underway using a recruitment firm to try and identify people who might make suitable candidates for our Board. I might say this is something that is ongoing. We don't sort of stop and start a process. We're constantly looking at what our combined skill set is, what some of our challenges are going forward, what skills we might need to replace as we methodically retire people off the Board, where we're doing our business, whether we need to enhance, for example, geographic representation. So that's a process that goes on all of the time in terms of bringing people on to the Board. Now it wasn't a difficult decision for the Board to make to invite Stephen to join us. He's just had an outstanding career working in all the areas that are absolutely critical to us. I mean it's not just the 35 years, some of which has been in resources, but also in other sectors that are absolutely critical to our business like energy, oil and gas, like utilities. He's worked around the world in the places where we conduct our business. So as I say, that was an easy decision. But consistent with the way in which we've brought everybody on to the Board, we went through the process with external advisers. Each member of the Board had a significant opportunity to spend time with Stephen and then, of course, we made the decision to appoint him. Always, as Chair, when you're recruiting people to the Board, you're thinking about succession and you're thinking about succession to the Chair. So it's not true to that we brought Stephen on to the Board to take over the chair. But it is true to say that as we were having those conversations, my Board colleagues and I said, when the time comes, he looks like he would be a very good candidate. And that has proven to be, as we've worked with him over this time. The process to replace me as chair was not conducted by me. It was conducted by Wayne Osborn. He stepped into the role as Chair of the Nomination and Governance Committee. I stood aside from that process. As you would expect, that is an appropriate way to handle the governance of a significant event of this kind. Stephen, anything you want to add?

Yes. Thanks, Chair. Listen, from my point of view as the person coming in from outside, it was the normal complete professional process than I would have expected. As Karen said, I had a terrific opportunity to meet with each of the directors, each of the senior management team to make sure that it was a great fit from my point of view as well as from the company's point of view. So a very normal process in that space. As you know, you only take on 1, 2 or 3 of these sort of roles at any point in time given the workloads involved. So you do choose carefully as a candidate coming in. And I suppose I was really attracted both because of the South32 business, but also because of the people and the values that I see in the organization, and they resonated very strongly with me, and that was part of the reason why I said yes from my side. Thank you.

Thanks, Steve, and thanks, Stephen, for your question. Belinda, anything else on the phone?

No further questions.

Okay. Could I now ask you then please to enter your vote on Resolution 2a? [Voting]

I'm now going to move to Resolution 2b, which is for the election of Mandla Msimang as a director of the company. Mandla was appointed to the Board on the 1st of February this year and has served as a member of the Nomination and Governance, Risk and Audit and Sustainability Committees. Now I'm embarrassed to tell you had a typographical error in our notice of meeting, referencing Mandla's membership of the Remuneration Committee rather than the Risk and Audit Committee. So my apologies. Mandla is a highly regarded executive and nonexecutive director, and her appointment brings valuable expertise in regulation, in public policy, information and communications technology to our Board. It's a great pleasure to have Mandla join us. Mandla, would you like to address the meeting?

Thank you very much, Karen, and good afternoon to everyone. Since joining the South32 Board in February, I've had the opportunity, just like Stephen, to meeting -- to engage meaningfully with my fellow directors, to build relationships with senior leaders and to spend time on site at several of our operations with our teams and with our communities. My induction to both the Board and the broader company has been thorough, and I've connected with key members of management through the Board programs and throughout my induction. In addition to South32, I am currently the Chief Executive Officer of Nozala Women Investments, a female-owned private equity firm. I'm also a nonexecutive director at JSE-listed Telkom South Africa Limited. And since the publication of the notice of meeting, I've resigned as a Nonexecutive Director of Exxaro Resources Limited. It's truly an honor to join the Board, and I look forward to your support as I stand for election today. Thank you, and I hand back to Karen.

Thanks, Mandla. It doesn't look like any questions in the room on this resolution.

No questions online. Thank you.

Thanks, Belinda. So I can now ask you, if you would please to enter your vote on resolution 2b. [Voting]

Item 3 refers to the adoption of the remuneration report for the year ended 30 June 2025, about which, of course, I've already spoken. You can find a copy of that report on Pages 135 to 164 of the annual report. Let me just make a few comments about the reward framework for the year. That framework remained unchanged. In considering the 2025 financial year remuneration outcomes, the Board is satisfied that they reflect overall business performance, the contribution that executives have made and the shareholder experience. Short-term incentive outcomes for our executives are determined by the business scorecard, the business modifier and an assessment of individual performance. Our business scorecard is designed to focus and reward executives for the delivery of key priorities for South32 that are within their control. While we delivered strong performance on most metrics last year, our aggregated financial and major project delivery outcomes were below target. Overall, the business scorecard outcome for the 2025 year was 100.8%, out of a total of 150%. Our short-term incentive plan provides the Board with the discretion to apply a business modifier to reflect factors that are not specifically contemplated in the scorecard. The Board reduced the business scorecard outcome this year by 20% for the chief executive to reflect the tragic loss of our colleague, about which we spoke earlier, José Luis Pérez at Cerro Matoso. Negative business modifiers were also applied to other members of the executive team. The Board awarded Graham an individual performance outcome of 120% in recognition of his strong personal leadership in delivering critical business and transformation initiatives during the financial year. As a result, Graham received a short-term incentive outcome of 65% of the maximum available under the plan. As I mentioned earlier, this year was the first time we assessed performance against the 2 strategic measures in the long-term incentive plan that were both introduced in 2022, portfolio management and our response to climate change. The Board determined a total outcome of 15%, 8% for portfolio management and 7% for climate change. The remaining 80% was forfeited as the company did not meet the total shareholder return hurdle despite delivering a TSR of 19.6% for the 4-year performance period. Let me now go to questions on this resolution. Belinda?

There's one question online from Mr. Stephen Mayne. Thank you for the change of practice this year to disclosing the proxy position early to the ASX along with the formal addresses. This allows for a more fully informed debate about the 32.5% remuneration strike. Thank you also to the Chair for his summary of the remuneration issues. Could she please name the 3 proxy advisers, which recommended against? And were there any proxy advisers, which recommended in favor of the report? Also, how many proxy advisers recommended against the Board's recommendation on the other remuneration issues, items and the climate transition plan, which was opposed by the 9.6% of voted proxies?

Thanks, Stephen, for your question. And look, I agree. I actually think it is an enhancement to release the proxy results first. So we appreciate that suggestion on your part, and we're very pleased to do it. Look, the 4 proxy advisers, there are others internationally, but the 4 main proxy advisers, if I set aside the Australian Shareholders' Association. And John already spoke about that earlier, having supported all of the resolutions. So institutional shareholder services, ownership matters and ACSI, so the Australian Council of Superannuation Investors, all were critical of aspects of the remuneration report. And as I said earlier, the criticisms deferred from proxy adviser to adviser. Some related, particularly ISS, related to the way in which we structured and reported short-term incentives and the way in which we'd included the 2 strategic measures in the long-term incentive plan. They were not criticisms from the other 2 proxy advisers, Ownership Matters and ACSI. But all 3 raised an issue with the decision we took to increase Graham's remuneration for this current financial year. I think as best I can understand there concern about that. It was that he was leaving sometime late next year. So why would we increase his pay. What has been helpful is that I, with my Board colleague, Wayne Osborn, Chair of the Remuneration Committee, had a lot of opportunity to talk not only to proxy advisers, but also more -- perhaps more importantly, to shareholders about that decision. And when we were able to explain that Graham is actually in the job doing this job for the whole of the financial year and beyond and how important that piece of the transition plan is. I think a great many of our shareholders recognize that as key to the overall succession plan. CGI Glass Lewis recommended a vote in favor. So not all of the proxy advisers recommended a vote against. I think I've picked up all of the elements of that question. But Stephen, if you're still online and I've missed anything, let me know.

[indiscernible]

Thanks, Wayne. Yes, thank you for that reminder. The ISS proxy advice was also against the grant of awards to Graham and to Matt's awards. No?

No to Graham's, I think.

Just to Graham's. I'm sorry. You're right. It's just to Graham's. Apologies.

No further online questions.

Thanks, Belinda. Nothing in the room. Then could I ask you to enter your vote, please, on Resolution 3. [Voting]

There are voting restrictions attached to this resolution. And of course, they're set out in the notice. I now will move to resolution 4. The purpose of which is to seek shareholder approval for the proposed grant of rights to our Chief Executive Officer. The rights relate to the deferred equity component of Graham's short-term incentive award for the 2025 financial year and the long-term incentive for the '26 financial year. 80% of the long-term incentive will continue to be assessed using relative total shareholder return over a 4-year performance period. As an outcome of a recent review of our executive reward framework, one of the total shareholder return comparator groups, the Morgan Stanley Capital International World Index, will be replaced from the 26th financial year by the ASX 100 constituent group. We made that change to be consistent with peer companies. There's no change to the other total shareholder return comparator group, which will remain as the constituents of the S&P Global Mining Index. The 2 strategic measures will continue to each account for 10% of the award. And again, these measures will be assessed by the Board at the conclusion of the 4-year performance period, which ends in June 2029. Further information on the measures and how performance is assessed is set out in the notice. So let me go to any questions on this item.

No online questions. Thank you, Chair.

Okay. Thanks, Belinda. Nothing online and nothing in the room. So I can ask you, if I may, please, to end your vote on resolution 4. And again, there are voting restrictions attached to this resolution, which is set out in the notice. [Voting]

I'll now move to Resolution #5. The purpose of this resolution is to seek shareholder approval for the proposed grant of rights to our incoming Deputy CEO, Matt Daley. As I mentioned earlier, Matt will join South32 as Deputy CEO at the beginning of February, and will transition to the CEO role late next year. The Board is seeking shareholder approval to grant Matt equity awards as part of his commencement benefits. These benefits are being offered, as I indicated earlier, as partial compensation for benefits he forfeited when he ceased his previous employment. The awards also provide alignment of Matt's long-term interests with those of shareholders. Almost half of the equity is being granted under South32's long-term incentive plan and further information about how that plan works is set out in the notice. The Board considers the quantum and the terms of the proposed awards to be appropriate to attract and retain an executive of Matt's caliber. Can I now go to please any questions on this item of business. Nothing in the room. Belinda?

No questions online.

Thanks, Belinda. I'll now ask you, if you would please to enter your vote on Resolution 5. And move to resolution 6. [Voting]

This is the nonbinding advisory vote on South32's climate change action plan, which is available, of course, on the company's website. Our Climate Change Action Plan for this year does build on the foundation of our inaugural plan, which we put to you in 2022 with the strong support of shareholders. Addressing the risks and opportunities presented by climate change has been central to our strategy since formation. In this updated plan, we reaffirm our commitment to climate action and outline the steps we are taking to continue to position our portfolio for the future to reduce greenhouse gas emissions and strengthen resilience to physical climate impacts. Over the past decade, we've transformed our business to focus on the production of minerals and metals critical to the world's energy transition. By bringing copper into our portfolio, expanding our aluminum production capacity and progressing development of Hermosa, we have increased our exposure to attractive base metals. We continue to work towards our target to halve our net operational emissions by FY '35 from FY '21 levels and our goal to achieve net zero by 2050. Our immediate focus remains on Hillside Aluminum where we are pursuing a comprehensive and affordable energy solution. At Worsley Alumina, our focus is on fuel switching, as we talked about earlier, and steam electrification initiatives. Our portfolio transformation has significantly lowered our Scope 3 emissions. Nevertheless, we remain committed to engaging with our suppliers, customers and other stakeholders to identify and pursue collaborative solutions to shared decarbonization challenges. We recognize that intensifying climate variability and extreme weather will continue to affect our business. To address the challenges, we're implementing a climate adoption and resilience plan, which focuses on strengthening present-day resilience while preparing for future climate impacts. Since releasing our inaugural plan, we've deepened our understanding of the commercial, the technical and the policy challenges that constrain progress on climate action. We recognize that alongside strong governance and effective risk management, multi-stakeholder collaboration led by governments worldwide will be critical to achieving a just transition for people and for communities. The purpose of this resolution is to provide shareholders with an opportunity to discuss and provide feedback on our approach to climate change. As I said, this resolution is advisory only and does not bind the directors of the company. However, as you would expect, the Board will take into account any shareholder feedback when considering its future approach to climate change. Can I now ask if there are any questions, please, on this resolution?

Chair, may I introduce Alex Douglas?

Hello, Alex. Welcome.

Hello, thank you. In 2022, the Intergovernmental Panel on Climate Change identified the Northern Jarrah Forest as one of a handful of Australian ecosystems at risk of collapse due to climate change. However, they noted that this risk could be substantially reduced by rapid, large-scale and effective mitigation and adaption to avoid and reduce forest degradation. The most immediate and emphasized remediation in line with this is to halt further clearing of native forests in the Northern Jarrah Forest. Despite this, under ministerial statement 1237, you recently received approval for the WA government to destroy a further 3,855 hectares of critical Numbat and Black Cockatoo habitat for your Worsley Alumina operations in the Northern Jarrah Forest, which is in addition to the 13,663 hectares of previously approved extended mining area, totaling 6,019 hectares. The clearing of mature native vegetation, as part of this represents a permanent loss of carbon storage capacity, increasing the likelihood that the Northern Jarrah Forest will transition from a net carbon sink to a net carbon source. Rehabilitation is a critical component of your mitigation and offset strategies, yet your 2025 Climate Change Action Plan only references rehabilitation once. Your Climate Change Action Plan also states, we are committed to providing clear and meaningful disclosures and transparently reporting our sustainability performance, including in relation to how we are addressing climate change. Additionally, under the conditions of Ministerial Statement 1237, you are required to produce under condition B14-2, a rehabilitation performance report by December 20, 2025, condition B14-3, and annual rehabilitation plan by September 30, 2025, and under condition D2-2, an annual compliance assessment report by the 20th of March 2026. Given your commitment to transparent reporting, a lack of clarity in actionable outcomes in your Climate Change Action Plan and the conditions of your Worsley Mine expansion on condition B14-2, has the rehabilitation performance report been submitted? And if not, when do you intend to do so? And will the report be made publicly available?

Thanks for the question. And again, I just want to preface my comments, and I'll ask Graham to comment on this also with the comment I made earlier. We do understand, and we respect that there are different views about how this work is progressed in the Southwest of Western Australia. So I don't, for a moment, ride over the concerns that you have, and it's why we have taken such a long time to make sure that the permitting process we've been through is one that is consistent with the 40 years of operation that we've had there that we think is a very responsible operation. I mentioned earlier our obligation to progressively rehabilitate the site. I mentioned earlier about the protected areas in the buffer zones that we've put in place. I talked about the reservation of the 8,000 hectares that came through that approval process. So we do feel very confident about the work we do, and we stand by our record on that. We've been down as Board directors and looked at the work that's gone on and feel very confident that the team on the ground there and beyond have the sort of objectives that you're talking about, which is obviously to minimize damage uppermost in their mind as they go about their work. On the lodgment of that plant, I don't know the answer to it. Graham may...

I don't know off the top of my head, but we can get someone very quickly out of this to do it. But obviously, we operate in line with the approved environmental plans, flora and fauna, consultation and also construction environmental management plan. Since 1984, we've rehabbed about 4,039 hectares. A lot of the areas we're now mining in a new area are actually recycled forest as well, but we can have someone go through some of the detail, if you like, at the break. We also do offer regular tours down there for people to have a look at some of the rehabilitation we do.

Okay. That would be great to get the details on when that report will be ready. The next question is on condition D2-2, are you working towards a deadline of the 20th of March 2026, for the annual compliance assessment report? And will it be made publicly available? In the spirit of transparency since the issuing of ministerial statement 1237, has there been any reported noncompliance?

I can't imagine we're not working towards a deadline. But again, I don't know the specific answer to that. You probably don't either, Graham.

So I have, again, we'll follow-up, but I've just had confirmation from one of our people not here that we have submitted our reports in line with the deadlines that you asked, and we'll continue to do that.

And will those be made publicly available?

I have to understand what we can and can't do by the actual license, but we'll get back to you on that one as well.

And just one more question on that.

No problem.

So if you're committed to being transparent about your reporting, why wouldn't you be making these reports publicly available?

Again, we have to work with the regulator about what they want as well at the same time.

Okay. Great. I do have one more question. That's a one more to the one more. We've had reports that the Department of Water and Environmental regulation are currently investigating reports of bores going dry, water mounting and dying eucalyptus from farming properties surrounding your Saddleback mine. This would mean a breach of Ministerial Statement 1237 condition B16 in land waters. Will there be compensation for surrounding farmers who are now unable to operate their farming business because of water impacts from the Mount Saddleback mine?

Yes. Look, again, I can't give you that detail. I haven't seen any of those come through to my desk, but I do know we engage regularly with all our local stakeholders, including the farmers. And we do have well monitoring in place across all the business. I haven't heard of anything along those lines, but we'll follow that up for you, and we can circle back.

Okay. So if DA are investigating, is that not something that would be made aware to you?

Not that I'm aware of that it's occurring now.

Thank sitting next to you is Kelly O'Rourke. She might not be the person who can give you all the answers, but she'll tell you who can in the break. Pleasure. Any other questions on this resolution from the room? Belinda?

Thank you, Chair. We have a question from Janet Barlow. Our company alongside approximately 200 others is required to reduce its emissions of CO2 by 5% each year, 30% by 2030. Could you inform us of the additional cost this year and last year of this in terms of both, one, internal reductions of emissions over and above those that predate the Safeguard Initiative; and two, purchases from third parties on emission credits. Could you indicate what estimates you have made for these extra costs over the next 2 years?

I think I'm going to ask Graham if he's got some contribution he can make in terms of cost. But it is important to recognize that our approach to addressing the climate change is integrated with our strategy. I'm often asked how much money are you spending on emissions reduction? And I say our capital spend is going into executing the strategy operation by operation. So for example, at Hillside, any work that we're doing in trying to reduce the emissions from that asset, and I indicated earlier, it's a very significant one for us because it accounts for 58% of our Scope 1 and 2 emissions, is all designed to reduce emissions so that there is a market for the aluminum that comes from that operation. In other words, that we can continue to export that aluminum to countries who have concerns about emissions and who put an impost on importation of the product where emissions haven't been reduced. So it's economic sense for us to do the work we're doing. We don't think about this as a cost that doesn't flow through to the profitability of our commodities and therefore, our company. But Graham, anything you wanted to add to that?

Yes. I mean, to your point, Karen, the 2 -- if you think about the 3 biggest contributors for us, they'll be the aluminum smelters, if Mozal's not running on hydro, and then it's Worsley. And obviously, it's power long-term contracts that drives the smelters. We're currently trying to renegotiate an extension of a hydro contract for Mozal, and we've committed to beyond 2031, and we're working closely with Eskom and the South African government to sort of make our smelter there more green and rely on renewables. So they're more medium to long term, well, Mozal is more present, but Hillside is more of a medium to long-term action, but there's lots of work going on. At Worsley, probably the big capital spend will be around the 2 boilers that we've done. The boilers is 5 in total. They're slightly different in configuration, but you're probably talking about a CapEx number of USD 20 million to USD 30 million, each over time to basically convert those. Each one is worth about a 5% reduction. That's where the capital would be for us, Karen.

Thanks, Graham.

And in terms of the other piece, what have we purchased or -- it's minimal around $3 million.

Thank you.

One final question from Mr. Stephen Mayne. The annual report says that we have 230,908 shareholders, but less than 2% of them will have voted today, including on this important climate transition plan resolution. Politicians wouldn't tolerate a 98% no show in elections. So why do we? One way of tackling chronically low retail shareholder voting rates is to disclose how many shareholders actually voted for and against each item of business like with a scheme of arrangement. Bapcor, ARB and Stockland all did this for the first time at their AGMs this month, joining the lights of ASX, Qantas, Myer, Suncorp, Tabcorp and many others. It's very well to reveal that only 9.96% of directed proxies opposed the climate transition plan, but it would be useful to see where retail shareholders sit on this issue by disclosing how many shareholders voted for and against. If you don't disclose this data, many of us, small shareholders, will give up and stop voting. Also, thanks for voluntarily offering this climate vote, and will you do it again next year?

Thanks, Stephen. We talked about the earlier part of your question last year, and I know I said at the time that we would certainly look at it. We have looked at it. We haven't done it this year. We made the decision not to do that, not because we don't obviously respect important role that retail shareholders play in our company. It's a very important role, and we have many of them in the room with us today. And for that, I thank them. I mean, John, from the Australian Shareholders' Association spoke earlier, about our numerous engagements. That is a very important part of the way in which we communicate with that group. And I suspect that John tries to encourage his members to exercise their voting rights. And certainly, we do that when we're having those sorts of conversations. Look, the Climate Change Action Plan, we have committed to update it every 3 years. We think that's important so that we can just share with our shareholders the progress that we've made and outlined any challenges that emerge over that period of time. We haven't taken a decision yet on whether we will put that to shareholders for a vote. But obviously, that will be a decision that's taken closer to the time. So thank you again.

No further online questions. Thank you.

Thanks, Belinda. Could I ask you then to please to enter your vote on resolution #6? [Voting]

We've now considered all of the items of business, but before I close the meeting, I did just want to give another opportunity for shareholders to ask any other question if they would like. Belinda, anything from your end?

No further questions. Thank you.

Thank you. Nothing in the room either. Look, if you haven't already done so, would you please complete your voting cards and place them in one of the ballot boxes being passed around or enter your votes online. [Voting]

The poll will close in 10 minutes. The results of the poll will be released to the stock exchanges and of course, published on the company's website as soon as possible. That brings us to the end of our Annual General Meeting. And on behalf of the Board and all of us, at South32, I do want to thank you, shareholders and guests for joining us and look forward to your continued support in the coming year, particularly that support under Stephen's chairmanship. On a personal note, and as I step away from the Chair, I do so with immense pride in what we've achieved together, including with our shareholders and with deep gratitude for the trust you've placed in me. I thank my Board colleagues, the leadership team and everyone at South32, all of our stakeholders for the privilege of serving as Chair of South32. It's been the greatest honor. I'd now like to invite those shareholders who are with us in the room to join us for some refreshments. Subject to the finalization of the poll, I now declare the meeting closed. Thank you.