Risk Management

Material issues to Tharisa are those that substantially affect the Group’s ability to create and sustain value in the short, medium and long term. The issues that are material to Tharisa and its stakeholders are determined by an analysis of our risks, the external environment and our engagement with stakeholders.

Material issues determine how we devise and implement our strategy since each issue has the potential to impact our ability to achieve our strategic objectives. Each issue also carries with it challenges and opportunities.

Our most material risks are considered and reported on an ongoing basis, by those members of the management team responsible for risk management. The Tharisa Risk Committee comprises all members of the Board.

Risks are identified in the Group Risk Register and are considered by management on a quarterly basis and reported to the Board at least twice a year. Here we present the material issues and risks that the executive team has identified in consultation with a wide range of stakeholders and with reference to our business model and strategy.

Risks	Impact	Mitigation
Safety Mining and processing safely is a key performance indicator for all executives and managers at Tharisa. Keeping our people safe is of paramount importance to our operations, stakeholders and to management.	Unsafe work environment leading to potential injury and/or fatality in the work environment Disruptions to operations pending root cause investigations Potential section 54 and section 55 instructions from the DMR	Strive for zero harm working environment Comprehensive training of standard operating procedures Implement culture of risk intolerance Transparent and open relationships with DMR inspectorate
Labour The consistent, assured availability of appropriately skilled human resources at economic rates is essential to the sustainability of our operations. Similarly important is the efficiency and discipline of our workforce.	Labour disruptions Potential damage to property Intimidation of employees potentially resulting in harm	Recognition agreement with NUM Concluded three-year wage agreement with NUM which provides certainty and stability Monthly liaison with shop stewards and regular contact with regional leadershi
Local stakeholders Our neighbours are impacted by our operations in terms of employment, dust, noise, water security and our ability to invest meaningfully in their communities. The perceptions of stakeholders, including different sections of the community and various levels of government, are varied and multi-layered.	Disruptions to operations through community unrest Safety and health of community	Ongoing environmental impact monitoring
Management of resources and reserves How we manage the extraction of the mineral resource, of multiple MG layers of reef, is critical to our business model. Our success depends on our extracting the maximum value per tonne of reef while avoiding in-pit dilution and undue sterilisation of the resource.	Sub optimal quantity and quality of reef resulting in poor processing plant recoveries impacting on financial performance Sterilisation of resources reduces life of mine and inhibits mining flexibility	In-house mining skills Accuracy and execution of mine plan Mining employees and contractors managed on KPIs Moved to single-contractor model (post financial year end)
Regulatory compliance Strict adherence to various legal and legislative requirements informs our licence to operate and our various compacts with investors. There is uncertainty around amendments to the MPRDA.	Cost of compliance to changes in MPRDA Non-compliance resulting in potential legal sanction Negative investor sentiment Capital raising hindered	Ensure compliance with current MPRDA and applicable legislation Engage with regulatory authorities and industry organisations Ongoing communication and awareness with investors
Environment We are obliged in terms of our undertaking to stakeholders, including government, providers of capital and the community, to monitor, minimise and mitigate our impact on the physical environment to the greatest extent possible.	Harm to the environment Cost of remediation and rehabilitation Potential legal sanctions	Conduct all operations in an environmentally responsible manner Compliance with all applicable national and local laws and regulations Monitor compliance against Equator Principles Mine closure rehabilitation guarantee and investment
Cash flow Investors expect appropriate returns relative to the perceived risks of their investments. In the context of subdued commodity prices the Company may have limited access to capital. The Company requires cash flow to meet debt repayments and ongoing growth of our asset through stay in business capital.	Inability to secure the capital necessary to fund the ongoing requirements of the Group Breach of debt facility terms Inadequate maintenance of plant and equipment	Comprehensive budgeting Stringent cost control Established working capital facilities Fully maintained debt service reserve account Preventative maintenance system implemented
Access to infrastructure Our mining, processing and marketing operations rely on sustainable access to water, electricity and rail and road infrastructure.	Production interruptions Delivery commitments not complied with	Two independent processing plants providing flexibility in times of electricity and water curtailments Run of mine stockpiles providing buffer feed for processing plants Multi modal transport optionality via bulk or containers, road and/or rail
Commodity prices The state of the world’s economies impacts on demand and market prices for PGMs and chrome concentrate. Volatility in the ZAR/US$ exchange rates affects our profitability.	Negative impact on the profitability and cashflows of the Group	Monitor costs closely to ensure that we remain in the lowest cost quartile Stringent cost control and focus on production

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