2021 Annual Report

Notes to the consolidated financial statements 30 June 2021 (continued) 22 Financial risk management (continued) (a) Market risk (continued) (ii) Commodity price risk (continued) Diesel fuel It is the Board's policy to hedge up to 75% of forecast diesel fuel usage. Diesel fuel price comprises a number of components, including Singapore gasoil and various other costs such as shipping and insurance. The total of all costs represents the wholesale or Terminal Gate Price (TGP) of diesel. The Group only hedges the Singapore gasoil component of the diesel TGP, which represents approximately 40% of the total diesel price. At the reporting date, the carrying value of the financial instruments exposed to commodity price movements were as follows: Financial instruments exposed to commodity price movements 2021 $'000 2020 $'000 Financial assets Trade receivables 65,077 38,089 Derivative financial instruments - diesel hedging contracts 2,751 348 Net exposure 67,828 38,437 The following table summarises the sensitivity of financial instruments held at 30 June 2021 to movements in the nickel price, with all other variables held constant. Trade receivables valuation uses a sensitivity analysis of 5.0% (2020: 5.0%). Impact on post-tax profit Sensitivity of financial instruments to nickel price movements 2021 $'000 2020 $'000 Increase/decrease in nickel price Increase 5,545 3,840 Decrease (5,545) (3,840) The following table summarises the sensitivity of financial instruments held at 30 June 2021 to movements in the copper price, with all other variables held constant. Trade receivables valuation uses a sensitivity analysis of 5.0% (2020: 5.0%). Impact on post-tax profit Sensitivity of financial instruments to copper price movements 2021 $'000 2020 $'000 Increase/decrease in copper price Increase 1,300 805 Decrease (1,300) (805) The following table summarises the sensitivity of financial instruments held at 30 June 2021 to a 20% (2020: 20%) movement in the price of Singapore gasoil 10ppm, with all other variables held constant. Impact on other components of equity Sensitivity of financial instruments to Singapore gasoil price movements 2021 $'000 2020 $'000 Increase/decrease in Singapore gasoil price Increase 1,137 2,206 Decrease (1,137) (2,206) IGO Limited 44 Notes to The Consolidated Financial Statements 30 June 2021 IGO ANNUAL REPORT 2021 — 113