Nickel Industries

Nickel Industries recognises that climate change has the potential to affect its operations, supply chain and broader business models through both physical and transition-related impacts. The Group has undertaken climate-related risk and opportunity assessments to understand where these impacts may arise across its operations and value chain.

Time horizons Short: to 2030 – aligns with the Group's near-term operational and capital planning cycles, including budgeting, maintenance programs and incremental optimisation initiatives, and the period over which near-term climate-related physical risks and regulatory developments are most reasonably assessable.

Medium: to 2040 – captures the period over which more substantive changes in technology, market conditions and climate policy settings are expected to emerge, relevant for assessing resilience of existing processing assets and value-chain requirements.

Long: to 2050 – aligns with widely adopted global decarbonisation benchmarks and net-zero objectives underpinning climate-related scenario analysis, supporting assessment of longer-term transition risks and opportunities.

Physical risks identified (chronic and acute), each with time horizon short/medium/long and status 'Increasing':

• Higher Temperatures, Extreme Heat, Solar Radiation & Heatwaves (Time Horizon: Short, medium, and long)
• Sea Level Rise (Time Horizon: Short, Medium and long)
• Extreme Rainfall and Flooding (Time Horizon: Short, medium and long)
• Extreme Weather including Tropical Cyclones (Time Horizon: Short, Medium and long)
• Landslide associated with steep terrain heavy rainfall and deforestation (Time Horizon: Short, Medium and long)
• Extreme weather - Downstream value chain (Time Horizon: Medium to Long)

Transition risks identified:

• Carbon Pricing (Time Horizon: Short, Medium and Long, Status: Increasing) – increases in carbon pricing across scope 1 and 2 emissions could directly increase energy costs, reduce operating margins, and affect long-term competitiveness particularly for Indonesian RKEF operations, with potential to further contribute to stranded asset risk.
• Energy Costs (Time Horizon: Short, medium and long term, Status: Increasing) – elevated energy costs increase production expenses across all forms of nickel production; sustained cost inflation may reduce competitiveness against lower-carbon producers.

Through this process, the Group identified a series of climate-related risks that could reasonably be expected to influence the Group's outlook, particularly with respect to cash flows and impacts on the balance sheet, over the short, medium and long term.

Value chain

The downstream value chain, which includes the use of Nickel in production/manufacturing, is outside of the Group's ownership, however this has been considered with respect to the Group's climate risks and opportunities.

Concentrations of risks Nickel Industries' risks have been found to be within two core areas: firstly, within the core asset base which largely exists within Indonesia and includes RKEF and HPAL refineries, as well as the mining site. This contributes to likelihood of exposures within physical risks such as temperature, rainfall and sea level increases, which have the potential to hinder local operations and place sustained pressures on community and worker safety.

Secondly, due to the concentration of the buyer market within China, there are significant value chain risks from both physical and transition risk perspectives. This includes increased adverse weather impacting buyer ports, impacting the value chain, with potential to decrease demand from increased transport risks. There are also secondary transition risks for on-selling of products such as batteries to western markets. Regulations such as battery passports or cross border adjustment mechanisms in the EU factor in emissions intensities in the production process which, if implemented, could reduce demand from the Group's products.

The physical impacts of climate change, together with the global shift toward a net-zero emissions economy, are expected to influence different parts of the Group's business and value chain in varying ways. The Group has undertaken an initial assessment to identify and evaluate the current and potential impacts of climate-related risks and opportunities across its business model and value chain, highlighting specific components of the business where these risks and opportunities are most concentrated.

Amount of assets vulnerable (concentration by asset type):

Transition plan and Decarbonisation targets Nickel Industries is committed to a 50% reduction in carbon intensity by 2035 and achieving net-zero emissions by 2050, using 2022 as a baseline.

Actions taken during the current period towards this commitment include:

Fleet Electrification: Fleet electrification and energy efficiency initiatives focus on reducing diesel use, Scope 1 emissions and operating costs by deploying electric mobile equipment where feasible. At Hengjaya Mine, the electric truck fleet expanded from 8 units in 2024 to 37 units, lowering diesel consumption and haulage energy intensity. RKEF deployed additional electric equipment, including 20 loaders, 4 excavators and 1 forklift.

Greenhouse gas emissions reduction target: Nickel Industries has established a GHG emissions reduction target and identified a range of potential pathways that may support achievement of that target. A key part of this transition is the Group's move from investing in RKEF refineries into HPAL projects, which produce MHP for use in the electric vehicle supply chain. The HPAL technology has been implemented to process nickel ores with lower emissions and energy requirements, utilising power from the captive waste heat boiler system from the acid plant, which can provide up to 40% of power needs. This technology processes limonite nickel ore, moved through a slurry pipeline instead of conventional truck transportation. The commissioning of the ENC HPAL project in 2026 is expected to deliver material reductions in carbon emissions intensity. At 31 December 2025 the Group had acquired a 44% interest for $1,012.0 million.

Solar and Battery: The Group is a participant in the solar project in the IMIP that will supply ENC with renewable power, which achieved financial close on 23 January 2026. This project consists of 262MWp photovoltaic and 80MWh battery energy storage system (BESS). The electricity offtake power purchase agreement includes a 25-year fixed rate tariff with no escalation.

The installation of a solar energy system at Hengjaya Mine, now supplying approximately 20% of the site's electricity needs, was complemented by EV haul trucks and electric loaders. Through Oracle Nickel, the Group transitioned to the use of recycled furnace gas for industrial processes, reducing reliance on coal and further lowering its carbon footprint.

Other forms of carbon reduction such as carbon credits are also being considered but are not currently being used.

Climate risk and opportunity integration into business strategy Nickel Industries operates in a sector with elevated exposure to physical and transition climate-related risks, which may affect the resilience of operations, value-chain continuity and long-term competitiveness. The Group has undertaken preliminary assessments to understand how these risks could influence its business and broader strategic position. As part of this work, Nickel Industries has identified a number of potential decarbonisation pathways and considered them at a high level for strategic and risk assessment purposes. The Group expects to continue evaluating climate-related risks and transition considerations and to progressively assess their relevance to longer-term strategy as external conditions and internal capabilities evolve. Any future integration of climate considerations into strategy will be subject to further analysis and decision-making in subsequent reporting periods.

Mitigations by risk (potential mitigations, extracted from risk tables) include: evaluation and improvement of heat-sensitive infrastructure and processes (HVAC/load management, heat exchangers, process insulation/controls, work-rest cycles); working with the IMIP industrial park operator on elevated foundations, dikes, roads, zoning restrictions, mangrove and coral reef restoration for sea level rise; studies into tailings facility effectiveness and improvements, elevating electrical infrastructure and backup power, equalisation basins, stormwater separation, elevating/strengthening haul roads for flooding; early warnings, safety drills, backup power, wind-resistant infrastructure, cyclone-resilient architecture, modular refinery units, dry-stacking tailings placement, expansion of solar captive microgrids with battery storage, investigation of direct-to-sulfate refining technology, dewatering & classification technology for extreme weather/cyclones; slope clearing limits, retaining buffers, slope drains/retaining walls, movement monitoring, InSAR & LiDAR geotechnical monitoring, reduced stripping ratios, reuse of landslide debris for infrastructure, for landslide risk; and for downstream value chain risk, enquiring with customers on climate risk assessments and considering further customer diversification and alternative logistics.

Current financial effects

In March 2025, extreme rainfall (~870 mm that month, including ~96.5 mm in 9 hours) led to an overflow from the main IMIP tailings storage which is not owned or operated by the Group, but is within the same IMIP as some of the Group's assets and facilities. There were impacts across the IMIP and wider area because of the overflow, however it only impacted the Group's Oracle Nickel RKEF refinery, which stopped production for two days given the inundation of contaminated water which damaged equipment. This caused approximately US$5.8 million in lost production and damage/repairs. Other impacts related to the overflow of the IMIP tailings storage were outside of the Group's assets and, given the tailings dam is not owned or operated by the Group, fall outside of the Group's obligations. This is an example of the short-term impact of the extreme weather risks identified in the risk table.

Significant risk of material adjustment in the next reporting period: No impact to the carrying amount of assets and liabilities reported in the related financial statements.

Anticipated financial effects

The estimation and measurement of anticipated financial impacts are subjective and based on various estimates and assumptions which are forward looking, long term, and are inherently uncertain by nature, based on the Group's current expectations of the impacts of climate risks and opportunities, which may change over time.

Rising temperatures, extreme heat, solar radiation and heatwaves are anticipated to reduce thermal and chemical efficiency across refining operations, increasing energy intensity and operating costs. Cost impacts are estimated at a single-year rise of approximately US$11.7 million by 2030, to US$20.0 million by 2040, and US$26.2 million by 2050, driven by higher cooling requirements, lost productivity, production downtime, and increased health and insurance costs.

Extreme rainfall and flooding present potential single-year costs of approximately US$8.3 million in 2030, rising to US$9.4 million in 2040 and US$10.5 million by 2050. Sea level rise, especially combined with storm surge or tsunami events, has estimated costs of around US$5.1 million in 2030, increasing to US$5.8 million in 2040 and US$6.5 million by 2050, most attributable to low-probability, high-impact events.

Extreme weather events (tropical cyclones) are projected to result in costs of approximately US$1.3 million in 2030, rising to US$1.6 million by 2050. Landslide risk is not currently quantifiable due to uncertainty and data limitations but has the potential to materially affect operating costs, revenues, asset values and capital expenditure through unplanned stabilisation works, production interruptions and potential impairments. Downstream value chain risk does not sit within the Group's operations or control and is not currently quantifiable due to uncertainty and data limitations, but has the potential to materially affect revenues and asset values.

Adaptation and resilience mitigations identified (heat-resilient/energy-efficient infrastructure upgrades, improved tailings facilities, raised infrastructure/flood protections, enhanced weather warning systems, operational controls) have not been reliably quantified financially but are expected to reduce costs of sales through lower energy intensity and fewer unplanned shutdowns, protect asset values, improve safety outcomes, and support more stable revenues and customer relationships.

The most material quantified transition risk relates to carbon pricing: under an NDC-aligned scenario, potential single-year carbon pricing costs are estimated at approximately US$283 million in 2030, rising to US$341 million in 2040 and US$411 million by 2050.

Energy cost transition risk: modelling under the same NDC scenario indicates an increase in net energy costs of approximately US$32 million by 2030, followed by a decline of around US$43 million in 2040 and US$61.4 million by 2050, reflecting assumed structural shifts in energy markets and potential efficiency improvements over time.

Other transition risks (global regulatory change, reputation and financing risk) have been assessed qualitatively due to significant measurement uncertainty and downstream impacts; could influence customer demand, pricing and margins, increase compliance and reporting costs, and raise capital expenditure requirements for decarbonisation, electrification and low-emissions processing. Reputational impacts and tighter ESG expectations may also affect revenue, cost of capital and access to financing if transition plans are not perceived as credible.

Strategic opportunities from the transition (implementation of the Net Zero Roadmap, green financing, market positioning) are identified but not considered material at this point; financial impacts have not yet been quantified.

Cumulative risk impact

(All figures in Estimated Annual Loss, US$million)

Overview Nickel Industries has assessed its climate resilience by considering the potential effects of climate-related transition and physical risks on its business model and strategy under a range of plausible climate scenarios. This assessment focuses on the Group's capacity to continue operating in the presence of climate-related risks, recognising the uncertainty inherent in longer-term climate outcomes.

The Group's resilience to climate change is dependent on its ability to maintain flexibility in its financial resources, allowing efficient allocation of capital towards emerging climate priorities. Any future development of climate-related targets will be determined by the Board as the Group's sustainability strategy matures, with consideration of the availability and flexibility of existing financing and financial resources, and the ability to redeploy, repurpose, upgrade, or decommission existing assets.

Under lower-temperature scenarios, Nickel Industries is exposed to elevated transition risk, including increased carbon costs, emissions-related regulation and changing market expectations for carbon-intensive products, placing pressure on operating costs, margins and demand. Under higher-temperature scenarios, the Group faces increased physical climate-related risks, including flooding, extreme weather events and changes in temperature and rainfall patterns, which may disrupt operations and supply chains and increase operational and safety-related pressures. Existing operational risk management processes provide a baseline level of resilience; however, likelihood and severity of impacts may increase under higher-temperature outcomes.

Implications for business model Under lower-temperature scenarios, the Group's carbon-intensive operating profile may expose it to increased costs and reduced competitiveness as carbon pricing, emissions-related regulation and customer expectations for lower-emissions products intensify, suggesting the Group may need to consider how reductions in carbon intensity could be achieved to support resilience and maintain market access. Under higher-temperature scenarios, increased exposure to physical climate-related risks may affect asset performance, operational continuity and supply-chain reliability, requiring consideration of physical risk exposures within the operating model. At the reporting date, these implications have not resulted in changes to the Group's strategy or business model; findings will be progressively considered alongside broader strategic planning and capital allocation decisions.

Uncertainty Nickel Industries' assessment of climate resilience is subject to significant uncertainty, reflecting the inherent limitations of climate scenario analysis and the long-term nature of the risks considered. For physical climate-related risks, the assessment draws on IPCC climate scenarios, involving uncertainty in future temperature outcomes, precipitation patterns, sea-level rise and frequency/severity of extreme weather events at regional and local scales. For transition climate-related risks, the assessment uses Network for Greening the Financial System (NGFS) scenarios, incorporating assumptions on the pace and effectiveness of global policy responses, carbon pricing trajectories, technology development and market behaviour. There is uncertainty in translating scenario outputs into business-specific impacts, and the assessment is based on a range of plausible outcomes rather than precise forecasts.

Scenario analysis inputs For physical climate-related risks, three IPCC Shared Socioeconomic Pathways (SSPs) were applied:

• SSP1-1.9: best estimate long-term temperature (2081-2100) 1.4°C (very likely range 1.0 to 1.8°C); globally coordinated focus on sustainable development.
• SSP2-4.5: best estimate 2.7°C (range 2.1 to 3.5°C); middle of the road, moderate mitigation.
• SSP5-8.5: best estimate 4.4°C (range 3.3 to 5.7°C); fossil-fuelled development, very high emissions.

For transition climate-related risks, four NGFS scenarios were applied:

• Net Zero 2050: best estimate 1.4°C (range 1.3–1.8°C); rapid, globally coordinated decarbonisation to achieve net zero CO2 around 2050; assumes 2/3 of energy generation renewable, coal and oil phase out by 2030 in advanced economies, rapid electrification, total energy demand decreases by 8% by 2050.
• NDCs: best estimate 2.3°C (range 2.3–3.0°C); full implementation of current NDCs without further strengthening; linear transition from 2030 target towards net zero by 2050, uses SSP2 pathways.
• Current Policies: best estimate 3.0°C (range 2.7–3.6°C); assumes existing policies only, no new targets, slower tech deployment and persistence of fossil fuels.
• Fragmented World: best estimate 2.4°C (range 3.3–4.5+°C); minimal coordination and limited mitigation efforts, policy inconsistency, regionalism, aligned with SSP3 regional rivalry.

The analysis was undertaken using short-term (to 2030), medium-term (to 2040) and long-term (to 2050) time horizons, reflecting operational planning cycles, asset lifecycles and longer-term climate transition benchmarks. Nickel Industries considers the selected scenarios relevant because they are globally recognised, widely used frameworks reflecting differing combinations of policy ambition, market response and physical climate outcomes.