IGO SUSTAINABILITY REPORT 2020

TOPIC DESCRIPTION OF RISK/OPPORTUNITY MANAGEMENT ACTIONS AND PLANS Risks — Short term Integration of new technologies on our existing operations carry some execution risk, particularly in underground fleet operations. We have an innovative culture that proactively applies new technologies and processes to leverage our business potential and enable the discovery of new resources. This is demonstrated in the construction of the solar farm at the Nova Operation, and our investigation of numerous ways to introduce electrification into our mining operation at Nova. Risks —Medium to long term As the clean energy transition progresses in the longer term, technological developments may favour options other than nickel dominant batteries, such as hydrogen fuel cells or other options. We closely monitor global energy technology trends as a core component of our strategy so that we can respond to changes in a timely and effective way. We also intend to continue using scenario analysis as a tool to stress test current strategies and financial plans on a regular basis (see the scenario analysis section on page 71 for more information). Reputation Opportunity IGO has an opportunity to be a ‘preferred investment’ if credentials and performance exceed average sectoral performance. Risks — Short, medium and long term As an ASX-listed company, investors and other stakeholders (including local communities) take an active interest in the climate change related risks relevant to the company, shared risks (particularly those related to host communities in respect of fire and water), climate change related opportunities and IGO’s management response to these matters. Company reputation could be negatively impacted if these expectations are not met, affecting the ability to attract capital, deliver investor returns and continue future growth. IGO takes pride in the positive contribution our company makes to the clean energy transition. Although our operations are not at significant scale, we proactively disclose our approach and progress on climate change related matters and work closely with our investors and other stakeholders to ensure we understand and meet expectations. We take considerable efforts to reduce Scope 1 and 2 emissions in our operations and transparently disclose our operational footprint. We are also considering options to better integrate climate-related reputational risks into our exploration and growth planning. Physical (acute and chronic) Risks — Short term IGO’s Nova Operation is located in the Fraser Range region of Western Australia. Product is trucked by road, approximately 380km to Esperance, and then shipped from the Esperance Port. Tropicana is located on the western edge of the Great Victoria Desert, making it one of the most isolated mining operations in Western Australia. Average annual temperatures in these areas have increased over the last century, with higher associated fire danger risks. Heavier rainfall events may also impact on production continuity and supply chain logistics. Water stress impacts are not anticipated within the expected operating life of our assets; however, they may become relevant if significant expansions extend current operations beyond 10 years. IGO maintains a detailed Emergency Preparedness and Business Continuity Planning Standard to ensure situations with the potential to disrupt operations are actively identified and plans put in place to minimise impacts. A dedicated risk assessment has also been completed for uncontrolled bushfire events. Crisis and Emergency Response Teams were recently involved in the response to a bushfire near the Nova Operation in 2019, which was successfully contained after four days with no harm to our people or operations. IGO sites are required to comply with the Company’s Water Management Standard, including maintenance of a site-specific water balance and water management plan. A risk assessment has also been completed on Nova’s complete life-of-mine water supply to ensure controls are adequate for the level of exposure. Risks —Medium to long term As our growth and exploration plans are executed, longer term physical risks will be relevant for any new developments, acquisitions or expansions. This may include increased insurance premiums and potentially reduced insurance availability in locations identified as ‘high risk’. We have considered physical risks to IGO’s longer term business strategies in our scenario analysis section on page 71. Scenario analysis In FY20, we furthered our risk and opportunity assessment by testing the resilience of our portfolio, strategies and financial planning approach under fit-for-purpose, forward-looking climate change scenarios. Publicly available scenarios, including those published by the IEA (International Energy Agency) and IPCC (Intergovernmental Panel on Climate Change), generally indicate transition related impacts diverging between scenarios from 2030 onwards, and physical impacts diverging from 2040 onwards. These are longer timeframes than the estimated remaining mine life for both our Nova and Tropicana assets, notwithstanding the potential for additional regional discoveries. In light of these practical considerations, we focused our scenario analysis largely on planned strategic exploration and acquisition activities in the medium to long term. Near term impacts for our existing operations are considered in our base-case risk and opportunity management activities as listed in the previous table, with the exception of carbon-price impacts as detailed under the 2°C scenario discussion. The following sections describe the scenarios considered and key insights and outcomes. Global energy transformation (2°C) scenario Under this scenario, the world rapidly and collaboratively decarbonises to limit global temperature rises to well below 2°C and avoid the most extreme physical impacts of climate change. The global energy system is transformed through large-scale investment on both supply and demand- side infrastructure, including energy efficiency, electrification of transport and industrial sectors (both expected to substantially increase copper demand in wiring and motors), renewable power generation and battery storage. Higher uptake of electric vehicles also leads to increased demand for battery materials (including nickel and cobalt) more than doubling compared to current policy-based outlooks. Carbon pricing is widely applied, rising from $100/t in 2030 to $140/t from 2040 in advanced economies, while fossil fuel subsidies are gradually removed by 2050. Consumer preferences are strongly aligned with clean energy and low- carbon technologies. References: International Energy Agency – World Energy Outlook, Sustainable Development Scenario (November 2019); Energy Technology Perspectives Scenario (2017) and Global EV Outlook (2020); Nickel Institute – Energy Transition: Nickel helping to combat climate change (2018); Copper Alliance - Copper’s contribution to a low-carbon future (2014); World Gold Council – Gold and Climate Change: Current and Future Impacts (2018). IGO Insights and outcomes • Our active prioritisation of nickel and copper exploration and discovery is expected to drive upside performance for the business under this scenario, noting that the timing and scale of results of exploration activities are inherently uncertain. Recent commercial agreements finalised for our Nova Operation were on materially improved terms compared to the preceding contracts, indicating early benefits from this demand growth. • Our growth strategy for the IGO portfolio is based on partnering, acquisition and divestment of advanced assets aligned with our Company strategy. This is supported by an internal process to evaluate and prioritise target commodities for the business in addition to nickel and copper. Our currently identified preferred target commodities were reviewed against the trends described by this scenario and found to be well-aligned for the timeframes under consideration. • Carbon pricing and other climate change related legislation may form a material consideration in our future development and acquisition decisions, noting that the location and scale of our operating portfolio will be subject to the outcomes of IGO’s active exploration activities and growth plans. We have engaged with third-party experts to develop a carbon price forecast for Australia and selected international regions, including both high and low-side scenarios, to improve the resilience of our decision-making in this context. • To stress test financial margins at Nova and Tropicana, should a disruptive regulatory shift take place at the federal or state level in the near term, the following quantitative analysis was completed: - current diesel fuel tax credits applicable to heavy vehicle use were removed from cash flow models; and - an effective carbon price of approximately $12/tCO 2 -e was applied to Scope 1 emissions based on the most recent ACCU (Australian carbon credit units) auction price ($16.14) applied to 75% of IGO emissions (100% for Nova and 30% equity share emissions for Tropicana). - this analysis found that impacts on operating margins, though notable, would remain below 5% for both operations, even in this extreme case. Extreme climate change (4°C) scenario In this scenario, stalled policy development and reduced investment in renewable energy and low-carbon technologies result in extreme global temperature rises to 4°C by the end of the century and greatly increased physical impacts from climate change. This includes increased severity and frequency of extreme weather events as well as increases in surface temperature, sea level rise and other chronic impacts. References: International Energy Agency – World Energy Outlook, Stated Policies Scenario (November 2019); Intergovernmental Panel on Climate Change Representative Concentration Pathway 6.0 and 8.5 scenarios. IGO Insights and outcomes Given the relatively short operational lives of our existing mining assets (Nova life of mine of approximately six years and Tropicana life of mine of approximately seven years), the resilience of our business under this scenario will depend on the specific locations of IGO’s future operations, including local infrastructure and supply chains. As such, we will review the physical and economic impacts of climate change on any new asset we purchase or develop, particularly those that are likely to be long-life assets. 70 — IGO SUSTAINABILITY REPORT 2020 IGO SUSTAINABILITY REPORT 2020— 71 OUR RESPONSE TO CLIMATE CHANGE