IGO SUSTAINABILITY REPORT 2020

IGO’s climate change related risks and opportunities TOPIC DESCRIPTION OF RISK/OPPORTUNITY MANAGEMENT ACTIONS AND PLANS Policy Opportunities Climate change related legislation is increasing across many jurisdictions, intended to drive resource-efficiency and uptake of low-emissions technologies. This is expected to increase demand for electrification of infrastructure, renewable energy and battery storage technologies, presenting a strong opportunity to increase sales volumes and commercial value of our products. IGO’s core business strategy is focused on supplying markets transitioning to cleaner and more efficient operations. IGO’s existing 100% owned Nova nickel- copper-cobalt Operation is strongly aligned with this strategy, and our organic growth plans also firmly focus on the discovery of metal deposits critical to clean energy (prioritising nickel and copper but also considering other commodity opportunities). Risks — Short term Both Nova (100% IGO-owned) and third-party operated Tropicana (30% IGO non-operated interest) report energy and emissions to Australia’s Clean Energy Regulator under the National Greenhouse and Energy Reporting Scheme (NGERS). Tropicana is also captured under the federal Safeguard Mechanism (SGM) with a calculated baseline in place until the end of FY20. This baseline (284 ktCO 2 -e) has not been exceeded to date. Nova Scope 1 emissions of 63 ktCO 2 -e are currently well below the 100 ktCO 2 -e threshold for the SGM. IGO may be more substantially impacted by climate change related policy developments over the remaining life of these operations. State-based climate legislation is evolving in Western Australia where they are located, and the federal policy response to meet Paris commitments remains uncertain. Tighter baselines under the current Safeguard Mechanism, changes to diesel fuel tax credits and passed-through costs from suppliers may all impact on IGO’s operating margins. IGO’s legal and SHEQ & Risk teams monitor policy developments on an ongoing basis for potential impacts on the business. Scenario analysis completed in FY20 included stress testing our near-term margins using a high-side carbon price and removal of fuel tax credits to better understand our position (see the scenario analysis section on page 71 for more details). IGO’s Proactively Green approach to reducing our operating emissions also serves to mitigate direct cost exposures to near-term carbon pricing developments. Operating emissions arise largely from diesel consumption at Nova, and from reducing reliance on this fuel is a priority. The completion of a hybrid solar PV-diesel electricity generation plant in November 2019 has materially reduced diesel consumption, with 10% of the operation’s power needs met by solar in FY20. This figure is expected to increase in FY21 as the plant will be in operation for the full year. We also continue to review options to cost-effectively electrify the underground mining fleet. We work with our joint venture partner and operator, AngloGold Ashanti, to remain informed on Tropicana’s current and anticipated baseline position, noting that our 30% share represents approximately 80 ktCO 2 -e of carbon exposure on an equity basis. Risks —Medium to long term Discoveries and subsequent development plans resulting from our exploration activities in Australia and overseas may be subject to climate related legislation e.g., carbon pricing, environmental licence conditions and more stringent water regulations. The use of renewables (as implemented with our solar farm at the Nova Operation) and associated battery technology is intended to be standard practice at new IGO-managed mines, reducing emissions intensity and potential liability under carbon pricing programs. An internal carbon price forecast is under development to support relevant decision-making as our business evolves in the medium to long term. We also maintain a dedicated water management standard which applies to all IGO managed mine sites and operations licenced to extract or utilise surface and ground water. These sites are required to explicitly consider the impact on water resources in risk assessments and maintain a site-specific water balance and water management plan. Where we are entering into joint ventures, we also intend to work closely with our partners towards the same standards. TOPIC DESCRIPTION OF RISK/OPPORTUNITY MANAGEMENT ACTIONS AND PLANS Market Opportunities As the global economy tackles the challenges of climate change, new markets are expected to evolve, including improved electricity transmission, energy storage and electric vehicle products. Decreasing costs and shifting consumer preferences may accelerate the growth of these markets, presenting strong opportunities for IGO to diversify end-markets for our nickel and other high-value commodities as well as increase overall sales volumes. Nickel is positioned to benefit from the transition to energy storage and electric vehicles, especially from nickel-dominant, lithium-ion battery uptake in electric vehicles. Nickel demand associated with stainless steel and specialist alloy markets is also growing, allowing for some diversity in our end-use markets given the uncertainty in forecast uptake rates of energy storage technologies. We work with our customers to help identify the downstream end users of our products to indicate progress against our strategic aspiration to provide materials to the clean energy sector. IGO has recently finalised new nickel concentrate agreements with equal volumes to Trafigura Pty. Ltd (Trafigura) and BHP Billiton Nickel West Pty Ltd (BHP). Based on public statements and advice from IGO customers, nickel products (including those from IGO supplied quantities) are largely sold to global battery material suppliers . We understand approximately 75% of IGO supplied nickel concentrate is processed for use in down-stream battery products. We have also completed a pre-feasibility study on converting nickel sulphide concentrate from Nova into high quality nickel sulphate via The IGO Process™. Due to the commercially strong new offtake agreements, the decision was taken not to progress to a more detailed feasibility study at this time. We will, however, continue exploring opportunities to create value from downstream processing via potential partnerships and collaborations leveraging off the technology developed. Under the terms of the new agreements, IGO has preserved a right to redirect our nickel concentrate (subject to agreed conditions) such that we may take a participating interest in a future downstream processing facility aligned to the production of battery materials. Risks — Short, medium and long term Uncertainty in market signals, particularly electric vehicle uptake rate and other clean energy transition trends, present some ongoing risks to our business strategies. Short term uncertainty is heightened by recent COVID-19 related economic impacts. Near-term market-related risks have largely been mitigated by the recent finalisation of a three-year binding offtake agreement for 50% of Nova’s nickel concentrate, and execution of a five-year offtake term sheet for the remaining 50%. Nova’s copper concentrate and Tropicana’s gold products have a broader distribution of end uses and are therefore not materially exposed to direct climate change related trends. Legal Risks — Short, medium and long term As a listed company, IGO’s directors hold legal responsibilities to manage foreseeable risks, including climate change. IGO’s Board is periodically briefed on climate change related issues relevant to the Company’s financial performance and strategic plans and as other relevant matters arise. The Board’s oversight is reflected in the endorsement of IGO’s stated position on climate change, plans to align public disclosures with TCFD recommendations and our approach to managing material risks and opportunities. Technology Opportunities Advancements in nickel-dominant battery technologies present upside potential for IGO’s sales of nickel products as well as other targeted commodities. Operationally, integration of innovative energy-efficient and renewable technologies in our current and future operated mines provides the opportunity to minimise operating costs and maximise profit margins. Options to expand into downstream processing of our nickel concentrates using green technologies also provide strong opportunities for a low cost, market-differentiated product. IGO closely monitors market trends to maintain a well- informed view on target commodities for the business. This draws on internal and external analysis (including publications by the Future Battery Industries CRC and electric vehicle market analysis by Goldman Sachs and other research bodies) to ensure that our business strategies remain aligned with the latest technological developments, consumer behaviours and other relevant drivers. and the near-term potential acquisition of operating mine assets. It is noted that mineral resources and ore reserves indicate our currently owned operations will be reaching end-of-life in seven to 10 years. Possible low and high-impact regulatory developments were considered as well as foreseeable physical impacts based on near term climate forecasts. • Medium-term time horizon of 5 – 10 years Focused on the execution of our growth and exploration strategies. As we are actively pursuing both brownfield and greenfield opportunities in Australia and internationally, the exact location, scale, infrastructure and operating conditions for our future portfolio is not yet known. As such, we considered how climate change related impacts and uncertainties could have implications for decisions relating to new discoveries, developments and/or acquisitions. Scenarios were used to identify areas where climate change may require greater focus in our planning processes going forward. • Long-term time horizon (beyond 10 years) Considered longer-term transition and physical impacts for inclusion in the growth strategy, including additional screening criteria for potential development opportunities. These were generally consistent with medium-term impacts. The table below summarises the key risks and opportunities identified, along with management actions and plans. 68 — IGO SUSTAINABILITY REPORT 2020 IGO SUSTAINABILITY REPORT 2020— 69 OUR RESPONSE TO CLIMATE CHANGE