Good morning and welcome to the Merafe interim results presentation. The operating environment continued to be volatile and uncertain, mainly due to geopolitical tensions which led to oil price shocks.

At Merafe, the uncertainty was mainly due to the smelters being idled whilst negotiations regarding electricity tariffs were underway. Thankfully, a positive outcome was achieved with NERSA approving tariffs of 62 cents per kilowatt-hour in May 2026.

Despite the challenging and uncertain environment, Merafe profits were higher for the six months to June 2026. If we look at the market, global stainless steel production increased by 3% to 33.2 million tonnes.

This increase was largely driven by China, Japan, and Indonesia. Global ferrochrome demand also increased by 4% and, as expected, the growth came from China and Indonesia.

Global ferrochrome production increased by 10% with China increasing by 32%. The increase in China's production was primarily driven by the continued ramp-up of low-cost production supported by competitive power costs and access to ore.

On the other hand, South African production decreased by 69% due to suspension of smelters. Chrome ore imports into China increased by 42%.

Of these imports, 79% came from South Africa. Look at pricing, prices across the three commodities trended upwards.

Chrome ore prices remained resilient, staying above $250 per tonne through the reporting period. However, these have been under some pressure in recent weeks.

Ferrochrome prices increased steadily and are currently just above a dollar. PGM prices improved significantly with the venture achieving average prices of 2,295 US dollars per ounce.

Moving to health and safety, no fatalities were recorded in the six months to June. The total recordable injury frequency rate improved by 24% from 1.8 in December 2025 to 1.4 in June 2026.

We remain focused on achieving the goal of zero harm. An update on electricity or Eskom, there were no significant disruptions in power supply.

The approval of the lower tariffs is welcome news and have paved the way for the restart of the suspended smelters. All negotiated pricing agreements have been concluded with Eskom.

In terms of alternative energy, renewable energy projects are currently on hold. With the restart of the smelters, it is likely that these will be revisited.

As previously indicated, we are in the process of de-risking the Bellek green energy project. Looking at production, ferrochrome production reduced to only 28 kilotonnes.

This was mainly due to the suspension of Boshoek and Wonderkop smelters. Lion smelter was restarted in Q1 on a staggered basis.

All four furnaces from Lion smelter have been fully operational from May 2026. Look at chrome ore production, chrome ore production decreased by 4%, mainly due to lower UG2 production as a result of lower feed.

Moving on to production costs, total production costs per tonne of ferrochrome increased by 33% due to higher market cost of chrome ore and higher fixed cost absorption rate. The costs are distorted because the smelters were being idled and therefore there were higher standing charges.

Chrome ore costs also increased by 12% due to higher labor, engineering, and fuel costs. These were offset by lower raw material costs.

In terms of the PGMs, PGM production decreased mainly as a result of lower mine production and feed mix. Prices made up for lower volumes with platinum and rhodium prices being significantly higher than H1 2025.

I will now invite Ditabe to take you through our financial performance.

Thank you, Zanele, and good morning, everyone. The revenue slide on page 21 will be my first slide.

Here we provide an overview of the revenue makeup. The bulk of our revenue remains export-based and all our PGMs concentrate is sold locally.

Yet again, chrome ore revenue's proportion to total revenue exceeded 50%. Period-on-period, chrome ore volume sold increased by 75%.

Average prices achieved for all commodities were higher. Lastly, the average rand-dollar exchange rate strengthened.

All these factors contributed to the increase in total revenue by 36%. On slide 22, we provide the commodities revenue trends over five halves.

Starting with ferrochrome, the suspension of smelters meant that approximately 75% less ferrochrome was produced by the venture year-to-date. The business was, however, able to draw down on its inventory holdings to meet its sales requirements.

Although sales volumes trailed last year's by 4%, ferrochrome revenue of 1.4 billion was 2% higher due to an 11% increase in average ferrochrome prices. Once again, China produced the bulk of its ferrochrome requirements.

Over the first half of 2026, this worked out to approximately 93% of its demand. Chrome ore revenue increased by 78% to 1.8 billion rand in the reporting period.

This was due to a combination of about 11% higher average chrome ore prices as well as a 75% increase in volume sold, as indicated earlier. Most of the sales were to China.

Finally, PGMs revenue of 255 million rand represents a 63% increase. This improved performance was made possible by 96% increase in prices achieved, which more than offset 4% lower volume sold.

As indicated, the average rand-dollar exchange rate strengthened over the reporting period, negatively impacting all our revenues, which are US dollar denominated. As more of our smelters restart, we'll begin to see a change in the chrome ore/ferrochrome mix.

The next slide shows our earnings per share. As stated in the company's trading update, there is an improvement in our financial performance, as evidenced by an increase in earnings per share.

We achieved basic earnings per share of 20.5 cents and headline earnings per share of 20.7 cents over the reporting period. Headline earnings per share normalizes earnings and in this case excludes the after-tax financial impact of the impairment of smelting plants.

In the next few slides, we look at earnings in greater detail. The contribution of each of our operations to the venture's EBITDA is analyzed on the next slide.

Once again, the importance of ore to earnings is evidenced by this chart. In the reporting period, chrome ore contributed 75% of the reported EBITDA from the venture.

Although this decreases from a contribution of 85% in the prior year, the mining business continued to fund the smelting operations. The contribution of PGMs increased in the current period from 17% to 20% due to favorable prices.

Smelting losses moderated over this reporting period, resulting in a lower negative contribution from 43% in the prior period to 10% this period. The impact of adjustments for unrealized profit on sales from mining operations to smelting operations is reflected in head office adjustments, which reduced to 15% due to lower intercompany chrome ore sales.

On the next slide, the proportions of the 2026 EBITDA variances in percentage terms relative to the 2025 EBITDA as a base are presented. The net impact of significantly higher chrome ore volumes, partially offset by lower ferrochrome and PGMs volume sold, is a positive 40% contribution to EBITDA.

The commodity prices impact is a positive 87%. Operations efficiencies were impacted by the restart of suspended plants, resulting in a negative 12% contribution to EBITDA.

Inflation eroded 20% from EBITDA, illustrating continued cost pressures. Foreign exchange effects of a stronger closing rand exchange rate used up 50% of EBITDA.

Due to suspended operations, standing charges accounted for 12% of EBITDA. The reversal of the restructuring provision due to the withdrawal of the Section 189 consultation process led to a positive 32% contribution to EBITDA.

Overall, the 2026 EBITDA from the venture is 65% higher than the 20 2025 comparative figure. The next slide looks at Merafe's share of EBITDA from the venture, a figure of 807 million rand and reconciles that to Merafe's reported profit after tax of 512 million rand for the period.

We reach this profit after the following items have been accounted for, and these are in order of size: current and deferred tax of 189 million rand, depreciation and amortization expense of 91 million rand, corporate costs of 33 million rand, net financing income of 28 million rand—and net financing income includes interest income from financial assets held with central treasury—impairment of 16 million rand, already discussed, and income from equity-accounted investment of 6 million rand. The slide that follows explores some of these items further.

On this slide, we present a standard income statement format. I will only deal with items not previously discussed.

A foreign exchange loss of 10 million rand resulted from a stronger closing rand-dollar exchange rate. This is against a loss of 81 million rand in the prior period.

Operating expenses are 36% higher due to several reasons, including higher volumes of chrome ore sold, higher standing charges, and inflation. The increase in costs was partially offset by retrenchment provision reversal of 181 million rand that I referred to earlier.

Merafe corporate costs were lower than in the prior year, mainly due to cost containment measures. The depreciation, amortization, and impairment charges are lower due to impairment losses recognized in prior periods.

The investment in Unicorn Chrome continues to contribute positively to profits. Net interest income is lower due to lower average cash balances and interest rates.

The current tax expense is higher due to increased earnings. The resultant profit after tax for the period is 512 million rand.

Next, we look at the balance sheet. Non-current assets increased due to capital expenditure of 174 million rand.

There was a net increase in total current assets over the reporting period. Inventory balances decreased due to draw down of ferrochrome inventory over the period.

Ferrochrome finished goods decreased from last year's closing balance and now represent a 2 to 3 months sales. Trade and other receivables increased due to sales in quarter 2 of 2026.

In terms of our liquid reserves, the 120-day notice deposit, which has been set aside for rehabilitation obligations and guarantees and is classified as other short-term financial asset, increased because of interest earned and capitalized. Other balances held by central treasury increased to approximately 721 million rand, while cash held at Merafe also increased to approximately 821 million rand, driven by improved performance and working capital improvements.

Liabilities include provision for environmental obligations of 333 million rand and trade and other payables of 786 million rand. The pending transfer pricing matter with SARS remains ongoing.

For reporting purposes, it will continue to be treated as a contingent liability. We earlier reported on our inventory levels.

This slide provides a bit more detail of our inventory. Ferrochrome finished goods reduced from 71,000 tonnes to 27,000 tonnes at year-end.

This was due to draw down of inventory, as already discussed. Chrome ore inventories increased slightly from 290,000 tonnes to 296,000 tonnes as production exceeded sales.

The bulk of our chrome ore is met grade and the bulk of our ferrochrome inventory is at plant and ports. Moving to slide 30, capital expenditure of 174 million rand was lower than in the prior period.

The bulk of the spend was on mining operations, with only 69 million rand spend on smelting operations. The restart of our smelters will see an increase in smelting capex.

Looking at the venture's total capital expenditure, 72% was spent on replacement and sustaining capital to keep the lights on. 22% of the spend was on health, safety, environment, and community requirements to ensure compliance and the safety of our employees.

5% was on expansion projects in our mining operations, with the balance on various smaller projects. On slide 31, we provide a reconciliation of our cash and cash equivalents balance.

We started the year with a cash balance of 448 458 million rand. Operating activities generated net cash of 810 million rand.

We've already spoken about the capex of 174 million rand that was spent. Payment of the 2025 final dividend used up 200 million rand, resulting in the closing cash balance of 871 million rand after sundry cash outflows of 23 million rand.

Next, we look at our liquid reserves on slide 32. This slide simply consolidates all the liquid reserves.

Merafe's own cash at reporting period is 871 million rand. Merafe's share of the 120-day notice deposit is 410 million rand.

Its share of other balances held with central treasury is 721 million rand, resulting in total liquid reserves of 2 billion rand at period-end. The company was ungeared and had sufficient headroom at period-end.

My last slide covers our interim dividend. After careful consideration of the matter, the board has declared an interim cash dividend of 16 cents per share, representing 77% of headline earnings and a 12% yield based on the closing share price at period-end.

Thank you all for your attention. It's over to Zanele for closing remarks.

Thank you, Ditabe. With the lower tariff, ferrochrome production should increase, with Wonderkop and Boshoek smelters restarting fully towards the end of the financial year.

Ferrochrome margins are likely to come under pressure as more supply comes on stream. Stainless steel production is expected to grow, which will support ferrochrome demand.

However, the operating environment is still uncertain and volatile. Pressure on costs is likely to continue.

Thank you. We will now take questions.

We have Japie Fullard also on the call, and he'll be available for any operational questions.

Thanks. Good morning.

Can you hear me?

Yes,

we can hear you, Tim.

Thanks. Firstly just thank you for the disclosures.

There's quite a lot more disclosures to work through this time, a lot more detail and a lot more transparency. Thank you for that.

That's very helpful to the market and certainly I appreciate that. Let's start off with just the sort of ramp-up.

We've clearly gone through a period where Lion was partly off and then came on from May, and Wonderkop and Boshoek will ramp up through the second half. Perhaps you can just give us if possible a little bit more color on what you think or what your budget for production guidance for ferrochrome is for the year.

Then obviously there's an offset to that, the ancillary part of that question is what happens to chrome ore production? Is your met grade production still going to stay the same and then should we sort of reduce the UG2 production down to virtually zero or the UG2 sales to zero?

I suppose the question is, are you in a net long position on chrome ore, not just met grade, but UG2? Then my last question briefly just is on dividends.

You've declared a 400 million rand dividend. You're sitting with 870 at Merafe level, you're keeping 470.

Should we think of that as holding back cash for the SARS payment just in case that comes along? Obviously you're disputing that.

Just in case that comes along. Then just my general understanding is that the tax authorities, I'm not sure about SARS, but tax authorities require you to pay up front and then dispute.

I suppose I wonder why that amount has not been paid up front once they have claimed against it. I'll leave it for there for now.

Thanks.

Thank you, Tim. I think your questions, there's quite a few wrapped into that one.

I think the first one is with the lower tariffs, you just want some color around the ramp-up and what our expected production is. Then there's a question around the dividend.

Then there's the question around SARS. Maybe we'll break it down like that.

With the production, Wonderkop and Boshoek the process of restarting has started. The ramp-up probably will be fully done around towards the end of the year.

You won't have the impact of that much of the production because it's only coming in fully towards the end of the year. Maybe I'll leave Ditabe to just give you the estimated production levels for the year.

He'll give you that number. Then on the dividend, you will note that the dividend is double what it was at I think the half year last year.

When the board looks at the dividend, they consider a number of aspects, and liabilities contingent or not is one of them. The SARS issue would have been considered, but that's not necessarily the only factor in the decision reached to pay the 400 million.

There's also with the ramp-up there's capex and working capital that goes into it, so that would have come into it as well. Also it is an interim dividend, at the end of the year when maybe things are more certain of how the ramp-up has gone, there's always an opportunity to look at whether you increase or not the dividend.

Maybe the issue of SARS and whether we've paid or not, I'll also leave that one to Ditabe.

Thanks, Zanele. Just on the issue of production, Tim, in terms of guidance, ferrochrome production guidance is between 25% to 29% of installed capacity for the reasons that Zanele has explained.

From a chrome ore production point of view, I would say it's a figure that you are probably familiar with is a number that you can still work with of approximately 5 million tonnes for the year. From a SARS point of view, we do continue to negotiate with SARS around the portion that hasn't been suspended and therefore requires payment.

You are quite right, generally the approach with SARS is pay now, argue later, but there are provisions in the act that allow you for to request suspension of payment, which we have had done. Once that the outcome of those discussions is known, we will then know what amounts, if any, need to be paid to SARS.

As Zanele indicated, those were some of the considerations amongst others that the board made in coming to the proposed dividend. Hope that answers your question.

Thanks. That was very helpful.

I'll pass on to someone else.

Thank you for that. There are a few questions on the webcast.

We'll start with the first one from Philip. Question is, with lower electricity prices, should higher production be feasible?

I'll hand that over to Zanele to answer.

I think that question we've already answered. Maybe it's linked to Tim's question.

That, yes, the process of ramping up Wonderkop and Boshoek is underway, so that should result in higher production.

Next question is from Wallace. The question, for the smelting business, on a stand-alone basis, what level of margins or profitability are achievable given the new 62 cents tariff?

I'll pass that one on to Japie. Japie, are you online?

Good morning, Ditabe. Yes, I am.

Am I clear?

Yes, you are.

Thank you. Obviously you know that we have now entered into the 62 cents tariff.

Now, what that means, it makes us competitive towards the Chinese production cost. At 62 cents, I can tell you that we are only utilizing our infrastructure.

We are not really in a profit-making situation. During this time period, it allows us to still keep our people in jobs.

It still allows us to capitalize or to sweat the assets that we've got. Also we then will transfer our ore into our own furnaces that will help in terms of logistics as well.

The 62 doesn't really make us that competitive. It just allows us to be able to still compete.

I think that's the long and the short of it. There's also certain agreements that we've got with Eskom in terms of upside sharing.

If we do move into a position of profit, we will also give back so that Eskom also shares in the upside. Definitely not in a profitable position to such a point that we are out of the woods yet, if that makes sense.

Thanks, Ditabe.

Thanks for that, Japie. The next question is from Matthew.

What is the expectation of capex in H2 and for 2027? I'll take that one.

Perhaps the best guidance Matthew is for the whole of 2026 our guidance is that our capex should come in between the ranges of 500 million rand and 550 million rand. For 2027, possibly a slight increase in that, which will fall between the ranges of 550 million rand and 600 million rand.

The next question is similar to Matthew's question. It's from Wallace.

It's also around capex, and hopefully my response has dealt with that one as well. The last question on the webcast is from Patrick.

This I'll hand over to Japie as well. The question is, where do you think the business sits on the global cost curve for ferrochrome with the agreed electricity tariff?

How competitive a position do you think the JV is in longer term? Thanks, Japie.

Thanks, Ditabe. Thank you, Ditabe.

I think this question is very much linked to the previous question. Except for obviously with the 62 cents we've moved definitely to the left-hand side of the cost curve, more towards the Chinese price.

Obviously we can expect that the Chinese will force their cost of production down even further. It will definitely place continued pressure on us as the JV.

We need to be very clever in the way that we box. Important for us to really capitalize on the 62 cents and not just sit back now and think that that's a silver bullet.

I just want to make it very clear that the 62 cents is not a silver bullet. It will just means that we will be able to be competitive, but we need to work very hard to stay there.

Obviously we are looking at various aspects: efficiency improvements, a reduction of labor. I think you also spoke about it, Ditabe, that even at a head office level we are also driving down cost.

We will be doing the same in our ferrochrome business, in our chrome business, for us to be really competitive. That will definitely help.

In the longer term, you know that we've got the 62 cents for a 3-year period. Obviously we are working with Eskom to see if we can't find a better electricity solution.

I think it's very publicly out there that all the other energy-intensive users are also now looking for the same type of relief, which is no problems because that's what we want to do. We want to reindustrialize South Africa.

We need to be very clever in the way that we do it. I hope that answers it, Ditabe.

Thanks for that, Japie. That was the last question on the webcast.

Back to you, ma't.

Thank you to everyone for attending this presentation. I guess like I said in the beginning, it was a challenging half.

The decisions, I guess, that we made in the past to suspend the smelting kind of paid off, and hence the improved profitability. Thanks for your time.