"We published our first Climate Change Action Plan in September 2022 and received strong shareholder support for the Plan."
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We are a globally diversified mining and metals company
We produce commodities including bauxite, alumina, aluminium, copper, silver, lead, zinc, nickel, metallurgical coal and manganese from our operations in Australia, Southern Africa and South America. With a focus on growing our base metals exposure, we also have two development options in North America and several partnerships with junior explorers around the world.
"Recent portfolio improvements have helped us deliver strong production growth in aluminium, base metals and manganese."
"Recent portfolio improvements have helped us deliver strong production growth in aluminium, base metals and manganese."
Our performance at a glance
Highlights
Highlights
- Recorded strong production growth in aluminium (14 per cent), base metals (17 per cent)1 and manganese (4 per cent), as we realised the benefit of recent portfolio improvements.
- Achieved annual production records at Hillside Aluminium, Australia Manganese and South Africa Manganese.
- This production growth, coupled with our continued focus on cost efficiencies, underpinned one of our largest underlying financial results.
- A record US$1.2 billion was returned to shareholders during FY232.
- Achieved significant milestones at our Hermosa project.
- Progressed near-term decarbonisation initiatives to support of delivery of our medium-term target3,4.
Annual Report 2023
Annual Report 2023
Our Annual Report 2023 is a summary of South32's operations, activities, performance and financial position as at 30 June 2023.
It includes our operating and financial review, governance information including the remuneration report, our financial report, resources and reserves information, shareholder information and glossary.
With more than 9,000 employees and a presence in six continents, we are proud to be creating opportunities for our people and the communities in which we operate to benefit from the development of natural resources. We are transforming our business to increase our exposure to commodities critical to a low-carbon3 future and are committed to continuously improving our sustainability performance, optimising our positive contributions and minimising adverse impacts.
What we do
We work to minimise the impact of our activities and aim to create enduring value for our stakeholders, at each stage of the mining lifecycle.
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Our commodities are used in many aspects of modern life and we are actively reshaping our portfolio to increase our exposure to the commodities critical to a low-carbon future.
Our commodities and FY23 production
Learn more about the commodities we produce and how the roles they are set to play in a low-carbon world.
Aluminium is often referred to as the metal of the future. It is lightweight, durable, strong, resistant to corrosion, recyclable and it can conduct electricity, meaning it has a wide range of applications including construction, electrical wiring, transportation, packaging and consumer goods such as electronics and household items.
Our integrated aluminium value chain consists of high-quality bauxite resources, large alumina refineries and the two largest aluminium smelters in Africa. We have doubled our low-carbon aluminium1 capacity and operate the largest aluminium smelter in the southern hemisphere.
1,133kt
FY23 aluminium production
5,101kt
FY23 alumina production
Learn more about aluminium, alumina and bauxite and how we produce it.
1A definition of the term 'low-carbon aluminium' when used in the context of climate change is set out in the Glossary of terms and abbreviations at the end of the Annual Report document
Copper is a key metal used in electric vehicles and charging infrastructure. It is an excellent conductor of electricity, so as the world moves towards electrification, copper will increasingly be used in power-related infrastructure, including renewable energy. Copper is also used in kitchen cookware and plumbing as it conducts heat well and has antimicrobial properties.
In FY22 we acquired an interest in our first operating copper mine - a conventional open-cut copper mine in the prolific Antofagasta region in Chile, which transitioned to 100 per cent renewable electricity supply in FY23.
70.7kt
FY23 copper production
Silver is used in solar panels due to its superior electrical conductivity, and is also used to make medical appliances and consumer electronics.
Lead is used in renewable energy storage systems.
Zinc protects metals against corrosion and will play a key role in green infrastructure development as a protective coating for wind turbines and solar panels. In solar panels zinc oxide coatings help achieve higher energy conversion.
We are a large producer of silver-rich lead concentrate and zinc concentrate.
11,813koz
FY23 silver production
101.7kt
FY23 lead production
59.2kt
FY23 zinc production
Nickel is used in stainless steel, which is used in transportation, manufacturing, household items and surgical instruments. Nickel has an important role to play as the world transitions to a more sustainable future as it is used as an alloy in wind and solar power infrastructure. Nickel-rich batteries are also critical for the rapid adoption of electric vehicles.
We are one of the world’s largest ferronickel producers with the potential to produce intermediary products for electric vehicles.
40.8kt
FY23 nickel production
Currently there is no viable alternative to metallurgical coal in the steelmaking process. The use of high-quality metallurgical coal that we produce supports greenhouse gas emissions reduction targets in the steel industry through improved blast furnace efficiency, when compared with lower-quality metallurgical coal. Growth in steel demand is anticipated for green infrastructure development and vehicle electrification, as well as for the establishment of new steel capacity in emerging markets.
We produce premium-quality, hard coking coal for domestic and export steel markets.
5,497kt
FY23 metallurgical coal production
Manganese is used to improve the quality and strength of steel in major infrastructure such as hospitals, office towers and bridges. Manganese also has the potential to displace cobalt in lithium-ion batteries, with demand for manganese-rich cathode chemistries expected to grow.
We are well positioned to meet future demand as we are the world’s largest producer of manganese and our Hermosa project has the potential to produce battery-grade manganese.
5,653kt
FY23 manganese production
“Our strategy of optimising the performance of our operations, unlocking their potential and identifying new opportunities to create value for our stakeholders has helped us navigate economic cycles over the last eight years.”
Graham Kerr CEO
Our purposeOur purpose is to make a difference by developing natural resources, improving people’s lives now and for generations to come. We are trusted by our owners and partners to realise the potential of their resources. | ||||
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Delivering on our strategy
We deliver on our purpose and our strategy by aligning our workforce behind seven ‘breakthroughs’ – commitments which shape our annual business planning process at corporate, operational and functional levels, enabling us to focus on what’s important. Our progress against those commitments and our delivery against our strategy in FY23 are detailed in our Annual Report.
Read about our progress on our strategy on pages 20-25 of our Annual Report
A balanced approach to measuring our performance
Our financial KPIs
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EarningsCollapse
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1,461 kt
Copper equivalent production1
FY22: 1,375kt FY21: 1,370kt
Why it matters
Provides a baseline to easily benchmark our production performance against other mining and metals companies.
Performance in FY23
Strong production growth in aluminium, base metals and manganese reflecting recent portfolio improvements and three annual production records.
1 Copper equivalent production was calculated using FY22 realised prices, and includes operated and non-operated operations.
US$1,177m
Investment2
FY22: US$723m FY21: US$637m
Why it matters
Measures our approach to investing in safe and reliable operations, improvements and life extensions, and growth options.
Performance in FY23
We increased our investment in productivity, improvement and growth activities across our portfolio, including at the Hermosa project and reflecting the inclusion of Sierra Gorda.
2 Includes intangibles and capitalised exploration expenditure, and material equity accounted investments on a proportional consolidation basis.
US$1,616m
Underlying EBIT3
FY22: US$3,967m FY21: US$1,039m
Why it matters
Underlying measures of earnings are important when assessing underlying financial and operating performance.
Performance in FY23
Production growth, coupled with our continued focus on cost efficiencies, supported one of our largest underlying financial results despite lower commodity prices and inflationary pressures.
3 This is a non-IFRS measure.
US$57m
Free cash flow from operations
FY22: US$2,240m FY21: US$639m
Why it matters
Cash flow measures are important when assessing underlying financial and operating performance.
Performance in FY23
Lower free cash flow reflects higher capital expenditure and one-off tax payments in relation to our Sierra Gorda acquisition and non-core royalty sale.
US$1,225m
Shareholder returns4
FY22: US$788m FY21: US$460m
Why it matters
Provides an indicator for shareholders of how well their investment is performing.
Performance in FY23
We delivered record returns to shareholders during FY23 via ordinary and special dividends and our on-market share buy-back.
4 Fully-franked ordinary and special dividends paid in respect of H2 FY22 (US$784M), fully-franked ordinary dividends paid in respect of H1 FY23 (US$223M) and on-market share buy-back (US$218M).
Sustainability KPIs
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1.4
Lost Time Injury Frequency (per million hours worked)1
FY22: 2.0 FY21: 1.7
Why it matters
Nothing is more important than the health, safety and wellbeing of our people.
Performance in FY23
LTIF reduced by 30 per cent compared to the FY22 baseline, reflecting a reduction in the frequency of severe events.
1 Incidents are included where South32 controls the work location or controls the work activity. Lost time injuries include injuries that result in one or more lost work days after the day of the event.
79%
Employee engagement
FY22: 78% FY21: N/A 2
Why it matters
Engaging directly with our people allows us to understand how they experience all aspects of South32 and identify areas for improvement.
Performance in FY23
Our employee engagement score, as measured in our Your Voice employee survey, improved by one per cent year-on-year.
2 Survey did not take place due to the impact of COVID-19
US$27.7m
Social investment3
FY22: US$31.1m FY21: US$22.2m
Why it matters
We invest in local communities with the aim of contributing to their social, economic, and institutional development.
Performance in FY23
Social investment decreased by 11 per cent year-on-year, primarily due to social investment at Hillside Aluminium which is price-linked under South African legislation.
3 Our total social investment comprised US$24.6m in direct investment (including Enterprise Development), US$2.5m in administrative costs, and US$0.6m of in-kind support.
61.5%
Water use efficiency
FY22: 66% FY21: 56%
Why it matters
Water is a valuable resource that we all share and a critical input for our operations.
Performance in FY23
Water use efficiency decreased by four per cent due to challenges faced at operations such as above average rainfall and management of excess water.
21.0Mt CO₂-e
Operational greenhouse gas emissions4
FY22: 21.0Mt CO₂-e FY21: 20.7Mt CO₂-e5
Why it matters
Human activity is causing climate change and the impacts are affecting ecosystems, biodiversity, and communities around the world.
Performance in FY23
Our reported Scope 1 and Scope 2 greenhouse gas emissions increased by 0.2 per cent year-on-year, with Scope 1 emissions increasing by 0.5 Mt CO2-e and Scope 2 emissions decreasing by 0.4 Mt CO2-e.
4 Includes Scope 1 and Scope 2 greenhouse gas emissions.
5 The FY21 baseline has been adjusted to exclude emissions from SAEC and TEMCO, which were divested in FY21.
Elsewhere in our Annual Report
Elsewhere in our Annual Report
RISK MANAGEMENT
Risk management is fundamental to maximising the value of our business and informing its strategic direction. Effective risk management enables us to identify priorities, allocate resources, demonstrate due diligence in discharging legal and regulatory obligations, and meet the standards and expectations of our stakeholders. Read more on pages 28-37.
FINANCIAL AND OPERATIONAL PERFORMACE
We increased our supply of commodities critical for a low-carbon future, recording strong production growth as we realised the benefit of recent portfolio improvements. Read more on pages 38-62.
BOARD INFORMATION AND DIRECTOR'S REPORT
Includes information about our Board members and their activity in 2023. Pages 64-75.
REMUNERATION REPORT
Describes our approach to Executive and Non-Executive Director remuneration, and our FY23 Business Scorecard and remuneration outcomes. Pages 78-103.
FINANCIAL REPORT
Includes detailed financial information such as income statements, balance sheets and more. Pages Pages 105-167.
RESOURCES AND RESERVES
Details our Mineral Resources and Ore Reserves (including Coal Resources and Coal Reserves) inaccordance with the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Pages 169-177.
Footnotes
1 FY23 growth in copper equivalent production at our base metals operations (Sierra Gorda, Cannington and Cerro Matoso), compared to FY22. Copper equivalent production
was calculated using FY22 realised prices.
2 Fully-franked ordinary and special dividends paid in respect of H2 FY22 (US$784M), fully-franked ordinary dividends paid in respect of H1 FY23 (US$223M) and on-market share
buy-back (US$218M).
3 In this report we use particular terminology in relation to climate change. Definitions of the terms 'goal', 'target' and 'low-carbon' when used in the context of climate change
are set out in the Glossary of terms and abbreviations on pages 181 to 187 of the annual report.
4 Our medium-term target is to reduce our operational greenhouse gas emissions by 50 per cent from FY21 levels by 2035. The FY21 baseline has been adjusted to exclude
emissions from SAEC and TEMCO, which were divested in FY21.
5 Copper equivalent production was calculated using FY22 realised prices, and includes operated and non-operated operations.
6 This is a non-IFRS measure. For an explanation of how South32 uses non-IFRS measures, see page 38 of our Annual Report.
7 Incidents are included where South32 controls the work location or controls the work activity. Lost time injuries include injuries that result in one or more lost work days after
the day of the event.
8 Our total social investment comprised US$24.6m in direct investment (including Enterprise Development), US$2.5m in administrative costs, and US$0.6m of in-kind support.
9 Includes Scope 1 and Scope 2 greenhouse gas emissions.
“I’ve always believed that, when done sustainably, mining can make a real difference in people’s lives. Whether it’s through creating jobs, investing in communities, protecting biodiversity or addressing climate change, sustainability is front of mind in everything we do. In fact, it’s at the heart of our purpose and underpins the delivery of our strategy.”
Graham Kerr CEO
Our approach to sustainability
Our approach to sustainability comprises five interconnected pillars which focus on areas that are material to our business and stakeholders.
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While our business has many positive impacts, we also recognise that our activities have the potential to cause adverse impacts. We are committed to continuously improving our sustainability performance, optimising our positive contributions and minimising adverse impacts by protecting and respecting our people, delivering value to society, operating ethically and responsibly, managing our environmental impact and taking steps to address climate change.
Our Sustainability Policy reaffirms our commitment to sustainable development and outlines our commitment to governance and transparency on sustainability matters. Approved by the Board, our Sustainability Policy is guided by international standards and initiatives, including the ICMM Mining Principles, the United Nations Global Compact (UNGC) Ten Principles, the Global Reporting Initiative (GRI), the Taskforce on Climate-related Financial Disclosures (TCFD), and the United Nations Sustainable Development Goals (UN SDGs).
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Protecting and respecting our peopleHealth and safetyPeople and culture | Delivering value to societyPartnering with communitiesOur societal contribution |
Operating ethically and responsiblyEthics and business integrityHuman rights Responsible value chain | Managing our environmental impactWater | Biodiversity | TailingsWaste, contamination and other emissions Closure |
Addressing climate changeJump to section |
Sustainable Development Report 2023
Sustainable Development Report 2023
The Sustainable Development Report is an overview of how our business-wide processes support our sustainability commitments, how we manage our most important sustainability topics, and the progress we have made during FY23.
Nothing is more important than the health, safety and wellbeing of our people. We are committed to working together safely, creating a values-based culture and an inclusive and diverse workforce.
HEALTH AND SAFETY
We are committed to working together safely, and continuously improving how we work by embedding safe and sustainable business practices throughout our business and work routines every day.
FY23 at a glance
FY23 at a glance
- Total Recordable Injury Frequency increased by 11 per cent, with the severity of events decreasing, as measured by a 30 per cent reduction in the Lost Time Injury Frequency
- Continued to implement our multi-year Safety Improvement Program and strengthened safety leadership capability
- Progressed our activities on health and wellness to a more holistic psychosocial health approach and implemented additional controls with the aim of keeping our people safe and well
Performance snapshot
¹ In November 2022, we were devastated by the loss of two of our colleagues, Mr. Cristovão Alberto Tonela and Mr. Alfredo Francisco Domingos João, who were fatally injured in an incident while undertaking maintenance work on a raising girder at Mozal Aluminium.
² Incidents are included where South32 controls the work location or controls the work activity. Lost time injuries include injuries that result in one or more lost work day after the day of the event.
³ Incidents are included where South32 controls the work location or controls the work activity. Recordable illnesses include illnesses that result in medical treatment, restricted work or lost time.
PEOPLE AND CULTURE
Our people are fundamental to our success. We seek to attract, develop and retain talented people who have a shared belief in our purpose and values. We are focused on fostering a safe, high-performance and values based organisational culture for our engaged, inclusive and diverse workforce. Our culture is a product of our people and systems, and is reflected in the way we work, the decisions we take, the courage we show and the legacy we leave.
FY23 at a glance
FY23 at a glance
- Improved representation of women on our Operational Leadership Team to 28.7 per cent
- 78 per cent of employees completed our annual Your Voice employee survey, our highest participation rate
- Almost 1,000 frontline leaders participated in the Leadership Fundamentals Program to develop leadership capability
Performance snapshot
We believe that, when done sustainably, the development of natural resources can change people’s lives for the better.
In delivering our strategy, we seek to create enduring social, environmental and economic value, in a way that aligns with our purpose and values. We believe trust and transparency are essential to the way we operate, we listen to our stakeholders to understand what’s important to them and work together with the aim of creating shared value.
PARTNERING WITH COMMUNITIES
We are a global business with a local focus, and committed to building meaningful relationships in the communities where we operate. We actively engage with stakeholders to understand their interests and aspirations and identify opportunities to work together with the aim of creating shared value.
FY23 at a glance
FY23 at a glance
- Updated Our Approach to Cultural Heritage to apply globally and developed Our Approach to Indigenous, Traditional and Tribal Peoples Engagement
- Supported reconciliation in Australia and created opportunities for open discussion on an Indigenous Voice to Parliament
- Updated our community complaints and grievance process guidelines
Performance snapshot
OUR SOCIETAL CONTRIBUTION
We seek to create value in the communities where we have a presence and make a positive contribution to society by producing the commodities required in a low-carbon future¹, paying taxes and royalties, providing jobs, developing local suppliers, investing in community programs and providing returns to shareholders.
FY23 at a glance
FY23 at a glance
- Social investment focused on education and leadership, good health and social wellbeing, economic participation, and natural resource resilience
- Increased the proportion of social investment allocated to strategic investments from 82 per cent to 90 per cent
- Established economic development plans for all operations
Performance snapshot
¹ Read more in our Addressing Climate Change section
² Our total social investment comprised US$24.6m in direct investment (including Enterprise Development), US$2.5m in administrative costs, and US$0.6m of in-kind support.
³ Includes operations at their respective percentage shareholding, including South32's ownership proportion of our manganese equity accounted investments, and excludes Sierra Gorda.
4 Includes South32’s ownership proportion for equity accounted investments
Operating ethically and responsibly is essential to fulfilling our purpose, delivering on our strategy and achieving our aspiration of building strong, mutually beneficial and trusting relationships with our stakeholders.
We respect human rights and apply responsible business practices across our value chain.
ETHICS AND BUSINESS INTEGRITY
We are committed to the highest standards of integrity and accountability. Our values and Code of Business Conduct guide how we act, work and communicate. Supported by our Speak Up Policy (our global whistleblower policy), we encourage our people to speak up when our values and standards of conduct are not being followed.
FY23 at a glance
FY23 at a glance
- Continued to enhance processes related to our Speak Up Policy and associated business conduct response processes, including EthicsPoint, as part of our commitment to encourage our people to speak up
- Enhanced our risk-based anti-bribery and corruption, sanctions and competition law compliance programs
Performance snapshot
HUMAN RIGHTS
Our commitment to respecting human rights is a vital part of our approach to sustainability, not only because it is the right thing to do, but because it reflects our values and is critical to sustainable business practice. We manage human, environmental and security risks to protect people and safeguard their rights.
FY23 at a glance
FY23 at a glance
- Updated Our Approach to Human Rights
- Completed Human Rights Impact Assessments at four operations and conducted Human Rights Risk Self-Assessments at a further three operations and one project
- Continued our engagement across the business on the nexus between climate change and human rights, focusing on just transition and the risks to human rights of renewable energy sources
Performance snapshot
RESPONSIBLE VALUE CHAIN
We seek to apply responsible business practices throughout our value chain by sourcing responsibly and enhancing product stewardship. Our aim is to build strong, mutually beneficial relationships with stakeholders and to work with suppliers and customers whose values and conduct align with ours.
FY23 at a glance
FY23 at a glance
- Exceeded our Enterprise and Supplier Development spend target by 81 per cent
- Direct spend with Aboriginal and Torres Strait Islander businesses increased by 18 per cent year-on-year
- Completed targeted analysis of Scope 3 GHG emissions in our purchased goods and services supply chain and identified key suppliers to engage on possible GHG emissions reduction opportunities
Performance snapshot
¹ Enterprise and Supplier Development (ESD) consists of two activities, Enterprise Development and Supplier Development. The Enterprise Development component, which was
US$5.2 million in FY23, is captured in both the ESD total and the social investment total.
² Target set in FY21 as 10 per cent year-on-year increase in procurement of goods and services from Aboriginal and Torres Strait Islander businesses.
³ Local procurement is the direct purchase of goods and services within the local communities in which South32 operates. Suppliers are deemed as local based on their proximity to our local communities, including boundaries defined by local government areas, provinces and states.
We are committed to protecting natural resources including water, biodiversity, air and surrounding ecosystems.
We work hard to be responsible stewards of the environment and aim to safely manage tailings, reduce waste, rehabilitate land disturbed by our activities and leave a positive legacy in host communities.
WATER
Water is a valuable resource that we share and is critical to the sustainability of communities, the environment and our business. In many of the areas where we operate, water is scarce, and we manage risks associated with water security and access for our operations and communities. We are taking near and long-term action to minimise and, where possible, avoid any negative impacts on water availability and quality for the future of our business, local communities, and the environment.
FY23 at a glance
FY23 at a glance
- Met the contextual water target at Hillside Aluminium
- Exceeded our water efficiency stretch target to achieve an efficiency improvement of more than two per cent
- Embedded our ‘value of water’ project to improve our long-term water planning
Performance snapshot
BIODIVERSITY
We recognise the importance of protecting biodiversity and ecosystem services and aim to achieve no net loss for all new projects and major expansions. It is our responsibility to minimise the impacts to the environment and to rehabilitate land disturbed by our activities.
FY23 at a glance
FY23 at a glance
- Expanded implementation of the biodiversity mitigation hierarchy
- Achieved the highest outputs of annual rehabilitation across our operations
- Participated in a pilot study on implementing the Taskforce on Nature-related Financial Disclosures (TNFD) Framework in the Australian context
Performance snapshot
¹ All required operations have a biodiversity management plan in place. All of our 'operated operations' require biodiversity management plans, excluding Mozal Aluminium
TAILINGS
The safe management of tailings storage facilities (TSFs) is essential to protect the environment and surrounding communities. We are committed to implementing the Global Industry Standard on Tailings Management (GISTM) at all South32 operated TSFs.
FY23 at a glance
FY23 at a glance
- Updated Our Approach to Tailings Management in alignment with the GISTM requirements
- Published our first GISTM public disclosure for our 'very high' consequence facilities, which are only at Worsley Alumina
- Strengthened dam monitoring and governance using the Decipher platform
Performance snapshot
¹ In FY23, our calculation was revised to include tailings reused as well as tailings recycled. Numbers for prior financial years reflect tailings recycled only.
WASTE, CONTAMINATION AND OTHER EMISSIONS
We are committed to reducing waste generated from our operations and managing contamination and other air emissions to minimise any impact on neighbouring communities and the environment. The safe management of waste and other emissions from our operations and projects, including managing contamination risks, is essential to operating responsibly.
FY23 at a glance
FY23 at a glance
- Continued to strengthen our management and monitoring measures of dust and noise across several of our operations
- Conducted stewardship reviews at our manganese mines in South Africa and Australia
- Continued to undertake remediation activities related to legacy hydrocarbon contamination at Milner Bay, Groote Eylandt associated with GEMCO
Performance snapshot
¹ Hazardous mineral waste is based on classification by local legislation. This includes hazardous mineral waste from processed raw materials, non-hazardous waste that is comingled with hazardous materials, as well as tailings, slimes, sludge, residues, slag, fly ash, gypsum and coal rejects.
CLOSURE
From exploration through to closure and beyond, we seek to minimise our impacts and maximise opportunities for the surrounding environments. We undertake progressive rehabilitation where possible and aim to leave a positive legacy in our host communities.
FY23 at a glance
FY23 at a glance
- Furthered our closure vision and planning processes and continued to work on integrating biodiversity and rehabilitation management into closure planning
- Engaged with key stakeholders on post mining land use at GEMCO and Cannington
- Assessed closure risk and financial contingencies associated with climate change risk
Performance snapshot
Our approach to climate change is integrated with our strategy and is designed to protect and unlock long-term value, build operational resilience, and enhance our competitiveness in a low-carbon world.
As a global mining and metals company, we have an important role to play in responding to the risks and opportunities of climate change: to produce commodities that are critical in the transition to a low-carbon world; and to do so in a way that seeks to minimise our impact.
Our approach
We support the objectives of the Paris Agreement and have a long-term goal¹ to achieve net zero greenhouse gas (GHG) emissions across all scopes (i.e. Scope 1, 2 and 3) by 2050.
We also have a medium-term target² to halve our operational GHG emissions by 2035 from our FY21 baseline³.
We are working to deliver our goal and target as described in our Climate Change Action Plan (CCAP) which was published in September 2022. The Addressing Climate Change section of our Sustainable Development Report (Pages 87-117), along with our Sustainability Databook, provides our first annual update of progress in delivering our CCAP.
Our approach to climate change is aligned to our purpose and integrated with our strategy, and is focused on:
- Reshaping our portfolio to the commodities that are critical in the transition to a low-carbon world
- Decarbonising our operations, with a focus on the four operations within our portfolio which account for the majority of our GHG emissions profile
- Understanding and responding to the potential physical impacts of climate change on our business to build operational resilience
- Working with others to innovate and address shared challenges across industry, and to decarbonise the value chain
¹ ‘Goal’ is defined as an ambition to seek an outcome for which there is no current pathway(s), but for which efforts will be pursued towards addressing that challenge, subject to certain assumptions or conditions.
² ‘Target’ is defined as an intended outcome in relation to which we have identified one or more pathways for delivery of that outcome, subject to certain assumptions or conditions.
³ FY21 baseline adjusted to exclude GHG emissions from SAEC and TEMCO, which were divested in FY21.
⁴ Low-carbon refers to lower levels of GHG emissions when compared to the current state. Where used in relation to South32’s products or portfolio, it refers to enhancement of
existing methods, practices and technologies to substantially lower the level of embodied GHG emissions as compared to the current state
RESHAPING OUR PORTFOLIO
Our commodity mix today is very different from that of 2015 when South32 was first established. We have exited carbon intensive and lower returning businesses, added copper and grown our share of low-carbon aluminium production.
FY23 at a glance
- Delivered 14 per cent growth in aluminium production and 17 per cent growth in other base metals production, benefitting from our investments in copper and low-carbon aluminium
- Advanced study work for the Hermosa project’s Taylor silver-lead-zinc and Clark battery-grade manganese Deposits
- Updated our 1.5°C scenario and reassessed the resilience of our portfolio under a rapid global transition
The graphic below shows how our commodity mix has evolved from FY16 to FY23. In FY23, we delivered 14 per cent growth in aluminium production and 17 per cent growth in other base metals production, as we realised the benefit of FY22 transactions that increased our exposure to these commodities.
OPERATIONAL DECARBONISATION
Over 90 per cent of our operational GHG emissions are generated by four operations. Our decarbonisation initiatives are primarily focused on these operations to support a significant reduction in our operational GHG emissions and deliver our medium-term target.
FY23 at a glance
- Commenced conversion of first coal-fired boiler to natural gas as a transitional step at Worsley Alumina, with an estimated abatement of up to 205,000 tonnes of CO2-e per year
- Converted 18 per cent of pots at Hillside Aluminium to AP3XLE energy efficiency technology, and completed four of five EnPot trials
- Commenced detailed design and execution planning for a commercial scale trial of CSIRO ventilation air methane mitigator (VAMMIT) technology at Illawarra Metallurgical Coal (IMC)
Our reported Scope 1 and Scope 2 GHG emissions for FY23 were 21.0 Mt CO2-e, a 0.2 per cent increase from our FY22 GHG emissions and a 1.6 per cent increase from our FY21 baseline.
Scope 1 GHG emissions from activities at our operations increased in FY23 by 0.5 Mt CO2-e, while there was a decrease of 0.4 Mt CO2-e in GHG emissions from electricity used by our operations (Scope 2).
¹ FY21 baseline adjusted to exclude GHG emissions from SAEC and TEMCO, which were divested in FY21
² FY21 GHG emissions adjusted to exclude GHG emissions from SAEC and TEMCO, which were divested in FY21.
³ The sum of the categories may vary to the total figure due to rounding.
SCOPE 3 GHG EMISSIONS
Scope 3 GHG emissions include those associated with upstream activities, such as embodied emissions in goods and services we use, and downstream activities, such as the processing and end-use of our products by our customers.
In FY23, almost 90 per cent of reported value chain GHG emissions were attributable to the downstream use and processing of our products, in particular the processing of alumina to manufacture aluminium ingots and use of metallurgical coal to make steel.
FY23 at a glance
- Commenced implementation of a shipping freight pricing incentive tied to carbon emissions performance of vessels
- Reviewed the decarbonisation goals and strategies of key suppliers and commenced engagement to develop potential new partnerships
- Included downstream transportation and distribution in our Scope 3 GHG reporting for the first time
¹ FY21 GHG emissions adjusted to exclude GHG emissions from SAEC and TEMCO, which were divested in FY21.
Note: Estimate of Scope 3 GHG emissions by commodity
are based on processing and use of sold products, and apportionment of other categories.
A description of Scope 3 GHG emission categories and methodologies is available in our 2023 Sustainability Databook
PHYSICAL CLIMATE RISKS
Physical climate risks are driven or intensified by weather, climate variability or climate change. They include acute risks, resulting from increased frequency or severity of extreme weather events (e.g., drought or flood events) and chronic risks, resulting from longer-term changes in climate patterns (e.g., sustained higher temperatures, sea level rise).
Physical climate risks have the potential to affect the integrity and performance of our equipment and infrastructure, compromise productivity, and disrupt business continuity (including our supply chain activities). There may also be broader environmental and socio-economic impacts on key stakeholders, including local communities.
FY23 at a glance
- Commenced incorporating the outcomes of our FY22 physical impacts of climate change assessment into our material risk reviews, including supply chains
- Considered physical climate risks in our life of operation plans (including closure planning)
- Embedded physical climate risk into South32's broader governance framework, including risk, integrated planning and environment
Our Sustainable Development Report also includes information about our Governance and Risk Management regarding climate change, which can be found on pages 115-117.
Sustainability Databook 2023
Sustainability Databook 2023
The Sustainability Databook includes detailed information on a wide range of sustainability topics and is intended to complement our Annual Report and Sustainable Development Report.
Corporate Governance Statement 2023
Corporate Governance Statement 2023
Our Corporate Governance Statement 2023 outlines South32's corporate governance framework, policies, and practices - which are designed to meet the high standards of governance expected by our stakeholders and to promote confidence and trust in our work.
It also includes more information about our Board, its members, its committees and its activities in FY23.
Modern Slavery Statement 2023
Modern Slavery Statement 2023
Modern slavery is a global issue, often hidden and complex. The risks of modern slavery continue to be heightened due to ongoing global crises, including economic and labour conditions in the aftermath of the COVID-19 pandemic, armed conflict and increasingly, the impacts of climate change. No industry or company is immune to the risks of modern slavery and the mining and metals sector, and the global supply chains that service it, have inherent risks of modern slavery throughout them.
Our Modern Slavery Statement 2023 outlines our approach and the steps taken to seek to minimise the risk of modern slavery in our business.
Tax Transparency and Payments to Governments Report 2023
Tax Transparency and Payments to Governments Report 2023
We care about the communities in which we operate and seek to create shared value through the development of natural resources.
Publishing an annual Tax Transparency and Payments to Governments Report allows us to demonstrate our tax affairs are conducted in accordance with our commitment to ethical business practices.
We believe tax transparency helps build community confidence about the valuecreated from resource development. We support initiatives that require companiesto publicly share relevant data, including payments made to governments and communities.
Download the Tax Transparency and Payments to Governments Report 2023 (.pdf)
Further Reporting Publications
Further documents, including from previous years, can be found on the Annual Reporting Suite page in the Investor section of our website.
Annual Reporting Suite