Merafe Resources : Integrated Annual Report 2022

Integrated Annual Report will be available on request from the Company Secretary.

We welcome the opportunity that an integrated approach to reporting offers us to break down reporting silos and provide a broader explanation of our performance, underpinned by a strategic focus, connectivity of information, a future orientation and an inclusive and responsible approach to stakeholders.

We use the capitals model (natural, human, social, manufactured and financial capital) for our reporting, as recommended in the International Integrated Reporting Committee's Integrated Reporting Framework, and by the King IV Report on Corporate GovernanceTM for South Africa, 2016 (King IV).

We depend on a variety of resources and relationships for our success. The extent to which we are depleting these or building them up has an important impact on the availability of the resources at our disposal and the relationships that support our long-term viability.

By seeing these resources and relationships in terms of "capital", the capital model provides us with a basis for understanding sustainability in terms of the economic concept of wealth creation or "capital" and encourages us to consider how wider environmental and social issues can affect our long-term profitability.

In addition to following the recommendations contained in King IV,

the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (SAMREC Code) and the JSE Limited Listings Requirements, we are guided by the Global Reporting Initiative's (GRI) G4 Guidelines and our internally developed policies and procedures in terms of measuring our progress towards sustainability.

Deloitte & Touche audits the Merafe Group's consolidated and separate annual financial statements (in this report referred to as "annual financial statements").

Our annual financial statements are in compliance with International Financial Reporting Standards (IFRS), SAICA Financial Reporting Guidelines as issued by the Accounting Practices Committee and financial pronouncements as issued by the Financial Reporting Standards Council, and are drawn up in accordance with the Companies Act, No. 71 of 2008. A copy of our annual financial statements is available on our website.

An independent auditor's report is published in the annual financial statements. Our annual financial statements form part of our online Integrated Annual Report for 2022. They are also available from our Company Secretary in either electronic or printed format.

The data and information relating to the Venture is subject to the annual internal and external reviews, audits and processes of the Venture (set out on page 59 of this report ) to ensure that the information relating to the Venture in this report is accurate and reliable. Merafe's attributable portion of the data of the Venture reported from page 22 to page 38 is 20.5%.

The board of directors of Merafe (the Board) acknowledges its responsibility for overseeing the integrity and completeness of this Integrated Annual Report, and has applied its collective mind to its preparation and presentation. As a collective, the Board believes that it has appropriately and diligently considered matters material to stakeholders and that the report accurately reflects the performance and strategy of the Group.

CONTENTS

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www.meraferesources.co.za

Positive performance or occurrence compared to prior year

Negative performance or occurrence compared to prior year

No change in performance compared to prior year

Forward looking statements

Certain statements in this report constitute "forward-looking statements". Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performances, objectives or achievements of the Merafe Group (as well as the industry in which it operates) to be materially different from future results, performances, objectives or achievements expressed or implied by these forward-looking statements.

The performance of the Merafe Group is subject to the effect of changes in commodity prices, currency fluctuations, uncertainty around the cost and supply of electricity, the risks involved in mining and smelting operations and the operating procedures and performance of the Venture. The Company undertakes no obligation to update publicly or to release any revisions to these forward- looking statements to reflect events or circumstances after the date of publication of these pages or to reflect the occurrence of unanticipated events.

The Merafe Group and Glencore (formerly Xstrata) formed the Venture in July 2004 when we pooled our chrome operations to create the largest ferrochrome producer in the world.

Our business

We are listed on the Johannesburg Stock Exchange (JSE) in the General Mining sector under the share code MRF. Our business is the 20.5% participation through our wholly-owned subsidiary, Merafe Ferrochrome, in the earnings before interest, tax, depreciation and amortisation (EBITDA) of the Venture in which Glencore Operations South Africa Proprietary Limited (Glencore) has a 79.5% participation.

Our major shareholders are Glencore (Netherlands) B.V. (Glencore BV)

and the Industrial Development Corporation of South Africa (IDC). See page 63 for more detailed shareholder information.

The Merafe Group and Glencore (formerly Xstrata) formed the Venture in July 2004 when we pooled our chrome operations to create the largest ferrochrome producer in the world. Glencore's merger with Xstrata took place in May 2013.

Stakeholder relationships

We believe our commitment and achievements in terms of empowerment, sustainability and good governance have allowed us to establish sound relationships with our stakeholders. A diagram setting out the stakeholders that Merafe and the Venture have identified, together with the issues we have identified that could have a material impact on our stakeholders, is set out on page 4.

Our shareholders

29%

Glencore BV

float

7% Offshore

free float

22% Industrial

Development

Corporation

For more information on the assets we pooled, of which we have retained ownership, and the additional assets we have invested in since participating in the Venture, see the tables on pages 21 and 60.

Merafe Empowerment as at 31 December 2022

We are committed to good governance and sustainability as reflected in our report. Merafe continues to apply the principles of King IV and the SRI Index reporting criteria in its business. Please see our King IV register on pages 44 and 45 of this report

as well as the sections on Performance and Transparency and Accountability.

We recognise that risk is inevitable in business and that it goes hand-in-hand with opportunity. We have established a risk management system that allows us to pursue business opportunities and grow shareholder value, monitor risk in our investments and develop and protect our people, the environment in which the Venture operates and our reputation. Our approach to risk management is discussed in the Transparency and Accountability section of this report on page 58.

Our material issues and our materiality determination process are set out on pages 8 and 9.