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1 5 December 2017 South32 Limited (Incorporated in Australia under the Corporations Act 2001 (Cth)) (ACN ) ASX / LSE / JSE Share Code: S32 ADR:SOUHY ISIN: AU000000S320 south32.net SOUTH32 STRATEGY AND BUSINESS UPDATE PRESENTATION South32 Limited (ASX, LSE, JSE: S32, ADR: SOUHY) (South32) management will meet with equity analysts and investors today in Perth, Australia to discuss its strategy and operational performance. Speaking at the event, Chief Executive Officer, Graham Kerr said, Our investor day provides another opportunity to reiterate the core elements of our strategy, following on from our Annual General meeting two weeks ago. I am pleased to reaffirm prior FY18 production guidance for our operations and provide production and unit cost guidance for Illawarra Metallurgical Coal for the first time, having restarted one longwall at the Appin colliery in October I can also confirm that Sustaining capital expenditure of US$470M 1 is now expected in FY18 (versus prior expectations of US$500M), with two thirds of the reduction associated with the deferral of underground development at Appin. Illawarra Metallurgical Coal guidance update Saleable production of 4.5Mt (3.35Mt metallurgical coal, 1.15Mt energy coal) is now projected for Illawarra Metallurgical Coal in FY18 at an operating unit cost of US$130/t 2. Production will be weighted to the second half of FY18 given the recent outage at the Appin colliery. We expect to return the Appin colliery to its prior two longwall configuration in the December 2018 quarter, after which we intend to ramp-up Illawarra Metallurgical Coal production safely and sustainably towards historical rates of more than 8Mtpa. Sustaining capital expenditure for Illawarra Metallurgical Coal is now expected to be US$120M in FY18 (previously US$150M) 1. About South32 South32 is a globally diversified mining and metals company with high quality operations in Australia, Southern Africa and South America. Our 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. We have a simple strategy to maximise the potential of our assets and shareholder returns by optimising our existing operations, unlocking their potential and identifying new opportunities to compete for capital. 1 FY18e Sustaining capital guidance includes the influence of exchange rates, and is predicated on various assumptions for FY18, including: an AUD:USD exchange rate of 0.74; a USD:ZAR exchange rate of 14.17; a USD:COP exchange rate of 2,961 and a USD:BRL exchange rate of 3.33; all of which reflected forward markets as at May 2017 or our internal expectations. Total Sustaining capital expenditure includes equity accounted investments. 2 FY18 operating unit cost guidance includes royalties and the influence of exchange rates, and is predicated on various assumptions, including an average blended coal price of US$119/t and an AUD:USD exchange rate of Registered Office: Level 35, 108 St Georges Terrace, Perth Western Australia 6000, Australia ABN Registered in Australia

2 FURTHER INFORMATION INVESTOR RELATIONS Alex Volante T M E Alex.Volante@south32.net MEDIA RELATIONS Hayley Cardy T M E Hayley.Cardy@south32.net Rob Ward T M E Robert.Ward@south32.net James Clothier T M E James.Clothier@south32.net Further information on South32 can be found at JSE Sponsor: UBS South Africa (Pty) Ltd 5 December 2017 Forward-looking statements This release contains forward-looking statements, including statements about currency exchange rates, commodity prices, production forecasts, plans, development decisions, exploration and capital expenditure. These forward-looking statements reflect expectations at the date of this release; however, they are not guarantees or predictions of future performance. They involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this release. Readers are cautioned not to put undue reliance on forward-looking statements. Except as required by applicable laws or regulations, South32 Limited does not undertake to publicly update or review any forward-looking statements, whether as a result of new information or future events. Past performance cannot be relied on as a guide to future performance. Registered Office: Level 35, 108 St Georges Terrace, Perth Western Australia 6000, Australia ABN Registered in Australia

3 STRATEGY AND BUSINESS UPDATE 5 DECEMBER 2017

4 THIS FINANCIAL To FORWARD-LOOKING This NON-IFRS This NO Nothing RELIANCE Any NO South32 MINERAL IMPORTANT NOTICES PRESENTATION SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL RESULTS AND OUTLOOK YEAR ENDED 30 JUNE 2017 ANNOUNCEMENT RELEASED ON 24 AUGUST 2017, WHICH IS AVAILABLE ON SOUTH32 S WEBSITE ( INFORMATION assist shareholders in their understanding of the south32 Group, pro forma information for FY15 has been prepared to reflect the business as it is now structured and as though it was in effect for the period 1 July 2014 to 30 June The Pro Forma financial information is not prepared in accordance with IFRS. STATEMENTS presentation contains forward-looking statements, including statements about trends in commodity prices and currency exchange rates; demand for commodities; production forecasts; plans, strategies and objectives of management; capital costs and scheduling; operating costs; anticipated productive lives of projects, mines and facilities; and provisions and contingent liabilities. These forward-looking statements reflect expectations at the date of this presentation, however they are not guarantees or predictions of future performance. They involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this presentation. Readers are cautioned not to put undue reliance on forward-looking statements. Except as required by applicable laws or regulations, the South32 Group does not undertake to publicly update or review any forward-looking statements, whether as a result of new information or future events. Past performance cannot be relied on as a guide to future performance. The denotation (e) refers to an estimate or forecast year. FINANCIAL INFORMATION presentation includes certain non-ifrs financial measures, including Underlying earnings, Underlying EBIT and Underlying EBITDA, Basic Underlying earnings per share, Underlying effective tax rate, Underlying EBIT margin, Underlying EBITDA margin, Underlying return on invested capital, Free cash flow, net cash, net operating assets and ROIC. These measures are used internally by management to assess the performance of our business, make decisions on the allocation of our resources and assess operational management. Non-IFRS measures have not been subject to audit or review and should not be considered as an indication of or alternative to an IFRS measure of profitability, financial performance or liquidity. FY18 year-to-date information is unaudited. OFFER OF SECURITIES in this presentation should be read or understood as an offer or recommendation to buy or sell South32 securities, or be treated or relied upon as a recommendation or advice by South32. ON THIRD PARTY INFORMATION information contained in this presentation that has been derived from publicly available sources (or views based on such information) has not been independently verified. The South32 Group does not make any representation or warranty about the accuracy, completeness or reliability of the information. This presentation should not be relied upon as a recommendation or forecast by South32. FINANCIAL OR INVESTMENT ADVICE SOUTH AFRICA does not provide any financial or investment 'advice' as that term is defined in the South African Financial Advisory and Intermediary Services Act, 37 of 2002, and we strongly recommend that you seek professional advice. RESOURCES AND ORE RESERVES The information that relates to the Mineral Resource and Ore Reserve estimates of Illawarra Metallurgical Coal, Cannington, South Africa Energy Coal, Australia Manganese, South Africa Manganese, Cerro Matoso and Brazil Alumina was declared as part of South32's Annual Resource and Reserve declaration in the FY17 Annual Report ( issued on 14 September South32 confirms that it is not aware of any new information or data that materially affects the information included in the original announcement. All material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. South32 confirms that the form and context in which the Competent Persons findings are presented have not been materially modified from the original market announcement. The information in this announcement that relates to Mineral Resource and Ore Reserves of Worsley Alumina reported as at 1st December 2017 is based on information compiled by competent persons, Ms J Binoir, Mr R Brown and Mr G Burnham who are members of the Australasian Institute of Mining and Metallurgy. Ms Binoir and Mr Burnham are full time employees of South32 and Mr Brown is employed by SRK Consulting. All Competent Persons have sufficient experience that is relevant to the style of mineralisation, the type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Ms Binoir, Mr Brown and Mr Burnham consent to the inclusion in the report of the matters based on their information in the form and context in which it appears. Rounding may result in small computational differences. Reserve life is the scheduled extraction period in years for the Total Ore Reserves in the approved Life of Operation Plan reported to the nearest year. Reserve life information is based on the previously disclosed FY17 annual Resource and Reserve statement (pg of the South32 Annual Report 2017). Resource life is calculated from the FY17 Classified Mineral or Coal Resources (as applicable), and as provided in the FY17 annual Resource and Reserve statement, converted to a run-of-mine basis using historical Mineral or Coal Resources (as applicable) to Ore Coal Reserves conversion factors, divided by the nominated runof-mine production rate on a 100 per cent basis. Resource life calculations are indicative only and do not necessarily reflect future uncertainties related to the modifying factors. Historical Mineral or Coal Resources to Ore or Coal Reserves conversion factors may not be indicative of future conversion factors. Resource Life is based on the company's current expectations of future results and should not be solely relied upon by investors when making investment decisions. There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources. The FY15 and FY16 Ore Reserves refer to the Ore Reserves disclosed as part of the Mineral Resource and Ore Reserve declarations in the South32 FY15 & FY16 Annual reports, published 25 September 2015 and 8 September 2016 respectively ( Weighted average individual operations Mineral or Coal Resources (as applicable) to Ore or Coal Reserves conversion factors and run-of-mine tonnages are as follows: Worsley Alumina: 0.85, 17.4Mt; Illawarra Metallurgical Coal: Bulli 0.38, 6.9Mt, Wongawilli 0.34, 4.8Mt; Cannington: 0.43, 2.6Mt; South Africa Energy Coal: Khutala 0.29, 5.3Mt, Klipspruit 0.89, 7.7Mt, Wolvekrans-Middelburg Complex (WMC) 0.86, 20Mt, Klipspruit Extension (Weltevreden) 0.93, 8.0Mt Australia Manganese: 0.70, 8.8Mt; South Africa Manganese: Mamatwan: 0.84, 3.5Mt, Wessels: 0.58, 1.3Mt; Cerro Matoso: 0.39, 3.2Mt and Brazil Alumina: 0.99, 17.75Mt. For Brazil Alumina, South32 is not aware of any new information or data that materially affects the information included in the announcements mentioned above and, in the case of estimates of Mineral Resources or Ore Reserves, all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. In addition, the form and context in which the Competent Persons findings are presented have not been materially modified. Competent Persons for Worsley Alumina (G. Burnham, AusIMM), Illawarra Metallurgical Coal (M. Rose, AusIMM), Cannington (T. Curypko, AusIMM), South Africa Energy Coal (P. Mulder, SAIMM), South Africa Manganese (J. Lamprecht SACNASP, employed by Advisian), Australia Manganese (U. Sandilands, AusIMM) and Cerro Matoso (I. Espitia, AusIMM) have reviewed and revised the historical conversion rates and production rates for the operations and revised the information inline with this new information and consent to their publication. SLIDE 2

5 WELCOME AND INTRODUCTION Session One Agenda Strategy update Graham Kerr Business update Brendan Harris Markets update Session Two Peter Finnimore David Clift Operations update Session Three Paul Harvey Mike Fraser Identifying new opportunities Graham Kerr Session Four Cash flow and balance sheet update Brendan Harris Summary of the day Graham Kerr From left to right, seated in front: Nicole Duncan (Chief People & Legal officer, Company Secretary) and Graham Kerr (Chief Executive Officer). Standing and seated behind: Paul Harvey (Chief Operating Officer, Australia), Brendan Harris (Chief Financial Officer), Peter Finnimore (Chief Marketing Officer), Rowena Smith (Chief Sustainability Officer), Johan Coetzee (Acting Chief Technology Officer) and Mike Fraser (Chief Operating Officer, Africa). SLIDE 3

6 STRATEGY UPDATE Graham Kerr (Chief Executive Officer) Need to scrub the earings JO image sent to Jimi to remove

7 OVERVIEW SUMMARY Consistent application of our strategy Sustainably improving performance Working opportunities across our portfolio to unlock value Further simplifying our business Embedding high quality options with a bias to base metals Substantially increasing returns to shareholders SLIDE 5

8 CONSISTENT APPLICATION OF OUR STRATEGY Optimise the performance of our existing operations Safety People ROIC Unlock their potential Convert high value resource to reserve Identify new opportunities Increase competition for capital Optimise portfolio with increased exposure to base metals SLIDE 6

9 DIVERSITY AND SUSTAINABILITY Measurable objectives Level Actual 1 FY20 Target Fatalities Women in workforce Women in leadership Corporate & Marketing 47% Total 16% Continuing improvement Board 33% 30% Lead Team 25% 30% Leadership 2 18% - 33% 30-40% TRIF TRILF FY15 FY16 FY17 FY18⁴ FY15 FY16 FY17 FY18⁴ Black People 3 in South African workforce Gender pay equity Management 42% 70% Total 79% 85% US$1.8M allocated to gender pay gap in FY17 GHG emissions (Mt CO 2 -e) FY15 FY16 FY17 FY18⁴ FY15 FY16 FY17 FY18⁵ 1. All as at 30 June 2017, except for Lead Team announced as at 24 August 2017 and Board as at 1 November Leadership measure reflects the range of outcomes for our various Regional, Marketing and Corporate teams. 3. Black People is a term meaning Africans, Coloureds and Indians who are citizens of the Republic of South Africa by birth or descent. 4. FY18 represents YTD figures as at 31 October FY18 GHG emissions are displayed as an annualised rate. Total Recordable Injury Frequency (TRIF) per million hours worked and Total Recordable Illness Frequency (TRILF) per million hours worked, are all calculated in accordance with the United States Government Occupational Safety and Health Assessment (OSHA) guidelines for the recording and reporting of occupational injuries and illnesses. Greenhouse gas total includes Scope 1 and Scope 2 emissions. Measured according to the World Resources Institute/World Business Council for Sustainable Development Greenhouse Gas Protocol (WRI/WBCSD). SLIDE 7

10 SUSTAINABLY IMPROVING PERFORMANCE TO DRIVE INCREASED RETURNS Achieved to date Optimise the performance of our existing operations Reduced controllable costs by ~US$700M and sustaining capital expenditure by ~US$200M over two years Completed South Africa Manganese restructure, creating flexibility Our next opportunities to drive an improvement in ROIC Establish South Africa Energy Coal independently to broaden ownership and unlock value Further simplify the Group to drive effectiveness and productivity Stretch performance of our operations in a sustainable way Transform culture and performance at Appin colliery (Illawarra Metallurgical Coal) Optimise Cannington for metal recovery over the life of the operation Continue to operate refineries and smelters at their maximum technical capability Deliver energy efficiency projects across the portfolio SLIDE 8

11 WORKING OPPORTUNITIES ACROSS THE PORTFOLIO TO UNLOCK VALUE Completed Testing La Esmeralda, lifting grade at Cerro Matoso for less than a third of original budget West Marradong agreement to access higher quality bauxite and defer capital at Worsley Alumina Wessels Central Block and GEMCO PC02 projects to improve our flexibility in manganese Unlock the potential of our existing operations Approved Brazil Alumina de-bottlenecking Klipspruit life extension Mozal Aluminium energy efficiency Study Agree Khutala life extension with Eskom (South Africa Energy Coal) Agree bauxite life extension with partners (Brazil Alumina) Dendrobium next domain (Illawarra Met Coal) Eastern leases (Australia Manganese) Open pit life extension (Cannington) Explore Southern lease (Australia Manganese) Regional nickel laterite and copper-gold targets (Cerro Matoso) SLIDE 9

12 EMBEDDING HIGH QUALITY OPTIONS WITH A BIAS TO BASE METALS Optimise portfolio and increase exposure to base metals Copper-gold exploration opportunity in Colombia (Cerro Matoso) AusQuest Strategic Alliance Three projects targeting base metals selected for drilling so far Identify new opportunities Invest to create value Balance Sheet provides flexibility to be opportunistic We will remain disciplined Cycle options to improve portfolio over time Northern Shield Resources Option Agreement Cu-Ni-PGE exploration at Huckleberry property, Quebec Trilogy Metals Option Agreement Copper exploration at Bornite and Arctic deposit, Alaska Arizona Mining investment Owners of significant Zn, Ag, Pb discovery in Arizona Current Mineral Resource of 72.5Mt (M&I) 10.5% ZnEq. 15% shareholding Prepayment designed to move to 19.9% 1. Measured and Indicated Mineral Resource as reported by Arizona Mining in Technical Report March 2017, in accordance with NI of Canadian Securities Administrators, stated at a cut-off grade 4% ZnEq, reported using units of short tons. ( SLIDE 10

13 A PORTFOLIO OF LONG LIFE OPERATIONS WITH OPTIONS TO UNLOCK VALUE Southern lease exploration potential Eastern leases Nickel laterite and copper-gold regional exploration potential Khutala life extension project 3 25 West Marradong resource to reserve conversion Cannington Klipspruit life open pit life Dendrobium extension project extension next domain (KPSX) approved project Bauxite extension project 3 29 FY17 Underlying EBITDA contribution⁵ Thermal Coal 10% Base Metals 16% Manganese 24% Australian Manganese Wessels Mamatwan South Africa Manganese Cerro Matoso Cannington² Appin Dendrobium Illawarra Metallurgical Coal 3 Khutala Klipspruit South Africa Energy Coal 4 Wolvekrans- Middelburg Worsley Alumina Brazil Alumina Metallurgical Coal 20% Aluminium & Alumina 30% Reserve Life (dark shade) 1 Resource Life (light shade) 1 1. Shown in years, resource and reserve life calculations are based on the previously disclosed FY17 Annual Resource and Reserve Statement (pg of the South32 Annual Report 2017). Resource conversion factors and run-of-mine production assumptions are shown on slide 2 Important Notices. 2. Cannington reserve and resource life excludes the current open pit resource of 29Mt. 3. Appin colliery reserve and resource refers to Bulli coal seam, Dendrobium colliery reserve and resource refers to Wongawilli coal seam. 4. Khutala Coal resource life is inclusive of undeveloped domains; Klipspruit Life Extension Project Coal resource life is derived from the Weltevreden Coal resources as previously disclosed in the market announcement South32 approves Klipspruit Life Extension Project dated 27 November Underlying EBITDA represents the Group s interest in the manganese operations and is presented on a proportional consolidation basis and excludes G&U costs of US$21M. Manganese EBITDA includes manganese ore and manganese alloy from Australia Manganese and South Africa Manganese. Metallurgical coal EBITDA includes metallurgical and energy coal from Illawarra Metallurgical Coal. Base metals EBITDA includes nickel from Cerro Matoso and silver, lead and zinc from Cannington. Thermal coal EBITDA includes energy coal from South Africa Energy Coal. Aluminium and alumina EBITDA includes Worsley Alumina, Brazil Alumina, South Africa Aluminium and Mozal Aluminium. SLIDE 11

14 OUR PORTFOLIO IS EVOLVING Trilogy Metals Bornite & Arctic % FY17 Operating margin 1 South32 operation Base metal exploration partnerships and investments Northern Shield Resources Huckleberry Arizona Mining Hermosa Project 32% Brazil Alumina AusQuest Bluebilly JV 66% Australia Manganese 2 AusQuest Jimberlana 47% Cannington 20% Cerro Matoso 29% Worsley Alumina AusQuest Chololo, Los Otros & Cerro de Fierro 25% South Africa Energy Coal 3 22% Mozal Aluminium AusQuest Balladonia 48% Illawarra Metallurgical Coal 42% South Africa Manganese 2 South Africa Aluminium 1. Operating Margin shows Underlying EBITDA margin by commodity group for FY17, excluding third party products. Colours represent commodity groups as shown on slide Australia Manganese comprises GEMCO ore and TEMCO alloy operations. South Africa Manganese includes Hotazel ore and Metalloys operations. Operating margins for ore businesses only. 3. Refer to market announcement dated 27 November 2017 South Africa Energy Coal to become a stand-alone business. 22% SLIDE 12

15 SOUTH AFRICA ENERGY COAL HAS UNIQUE ATTRIBUTES The status quo Uncertain medium and long term demand in the export thermal coal market Constrained by long term take-or-pay rail and domestic supply agreements Substantial investment being made to sustain production and mitigate embedded liabilities Needs to improve financial performance 35% of all employees and contractors 8,400 as at 30 October % of FY18e total capital expenditure FY18e of US$162M 1 ~1.4% of net assets FY17: US$141M ~50% of closure and rehabilitation provisions US$746M at 30 June Includes sustaining capital expenditure of US$112M and major projects capital expenditure of US$50M relating to the Klipspruit life extension project. SLIDE 13

16 SOUTH AFRICA ENERGY COAL HAS UNIQUE ATTRIBUTES Once transformed South Africa Energy Coal will be better positioned to unlock its full potential 4.9Bt Dedicated systems and processes designed to suit South Africa Energy Coal s unique characteristics 346Mt More readily able to access domestic opportunities with Eskom and obtain new licenses Better opportunity to negotiate long-term domestic contracts Total Marketable Coal Reserves¹ Total Coal Resources¹ 1. Based on the FY17 Mineral Resource and Ore Reserve disclosure in the FY17 Annual Report ( Mining Right Prospecting Right SLIDE 14

17 ESTABLISHING SOUTH AFRICA ENERGY COAL AS A STAND-ALONE BUSINESS TO UNLOCK VALUE How we will realise value South Africa Energy Coal Invest in the 4.3B Rand (US$301M) Klipspruit life extension project (>20% IRR) 1 Establish South Africa Energy Coal as a stand-alone business (April 2018) 2 Broaden ownership, further transforming the operation and presenting opportunities for employees, communities and B-BBEE entities South32 By establishing South Africa Energy Coal as a stand-alone business we will significantly simplify the Group Will allow us to create a simpler and more effective organisation, better positioned to support our operations and unlock opportunities, with a bias to base metals Potential listing on the Johannesburg Stock Exchange 1. Refer to market announcement dated 27 November 2017 South32 approves Klipspruit life extension project. 2. Refer to market announcement dated 27 November 2017 South Africa Energy Coal to become a stand-alone business. SLIDE 15

18 OVERVIEW SUMMARY Consistent application of our strategy Sustainably improving performance Working opportunities across our portfolio to unlock value Further simplifying our business Embedding high quality options with a bias to base metals Substantially increasing returns to shareholders SLIDE 16

19 BUSINESS UPDATE Brendan Harris (Chief Financial Officer)

20 UNCHANGED PRODUCTION GUIDANCE Operation Q1 FY18 production run-rate relative to guidance FY18e guidance 1 Commentary 0% 25% 50% 75% 100% 125% Worsley Alumina Worsley Alumina 3,975 kt Calciner maintenance and adverse weather (elevated bauxite moisture levels) impacted Q1 FY18 production Substantial hydrate stocks on hand (40kt alumina equivalent at 30 September) South Africa Aluminium South Africa Aluminium 720 kt Smelter operating at maximum technical capacity Mozal Aluminium Mozal Aluminium 269 kt Smelter operating at maximum technical capacity following quarterly production record in Q1 FY18 Brazil Alumina Brazil Alumina 1,345 kt Refinery on-track to achieve record production in FY18 Cerro Matoso 41.6 kt Improvement in plant utilisation and higher nickel grade (with La Esmeralda) impacting positively on production Planned maintenance outages scheduled in Q2 and Q3 FY18 Annualised Q1 FY18 production exceeds 95% of guidance Annualised Q1 FY18 production is below 95% of guidance 1. South32 share. SLIDE 18

21 UNCHANGED PRODUCTION GUIDANCE Operation Q1 FY18 production run-rate relative to guidance FY18e guidance 1 Commentary 0% 25% 50% 75% 100% 125% Australia Manganese ore 3,125 kwmt Strong performance from primary higher grade and PC02 circuits (with wet season to follow) South Africa Manganese ore 2 1,885 kwmt Continued utilisation of high cost trucking in response to strong market demand South Africa Energy Coal 3 27,500kt Development of new mining areas at WMC tracking to plan with an uplift in volumes expected in H2 FY18 Cannington ore processed 2,600 kt Successfully replaced shaft haulage with trucking capacity following decommissioning of underground crusher in September 2017 (achieving 87% of FY17 mining rates) silver 14,360 koz Production weighted towards Q4 FY18 with new crusher chamber to be commissioned towards end of Q lead zinc 115 kt 45 kt Production guidance also predicated on extraction of higher grade (silver and lead) stopes in Q4 FY18, consistent with the mine plan Annualised Q1 FY18 production exceeds 95% of guidance Annualised Q1 FY18 production is below 95% of guidance 1. South32 share. 2. Consistent with the presentation of South32 s segment information, South Africa Manganese ore production and sales have been reported at 60%. The Group s financial statement will continue to reflect a 54.6% interest in South Africa Manganese ore. 3. South32 s interest in South Africa Energy Coal is accounted at 100% until broad-based black economic empowerment (B-BBEE) vendor loans are repaid. SLIDE 19

22 OPERATING UNIT COSTS (YEAR TO DATE) Operation Unit FY17 FY18e 1 YTD relative to guidance 2-10% 0% 10% 20% Commentary South Africa Aluminium 3 US$/t 1,454 Higher alumina, price-linked power, pitch and coke input costs Mozal Aluminium 3 US$/t 1,495 Higher alumina, pitch and coke input costs Worsley Alumina US$/t Higher caustic soda consumption and lower calcined alumina production Australia Manganese (FOB) US$/dmtu South Africa Manganese (FOB) US$/dmtu Use of higher cost trucking to maximise value and price-linked royalties Cerro Matoso US$/lb Cannington 4 US$/t South Africa Energy Coal US$/t Controllable Foreign exchange Price linked Realised price Year to date unit costs +/- 5% of guidance +5 to +10% of guidance +10% of guidance Mining costs are tracking to plan, despite an adverse move in the US dollar 1. FY18e Operating unit cost guidance includes royalties (where appropriate) and the influence of exchange rates, and is predicated on various assumptions for FY18, including: an alumina price of US$299/t; a manganese ore price of US$4.50/dmtu for 44% manganese product; a nickel price of US$4.27/lb; a thermal coal price of US$72/t (API4) for South Africa Energy Coal; a silver price of US$16.82/troy oz; a lead price of US$2,135/t; a zinc price of US$2,555/t; an AUD:USD exchange rate of 0.74; a USD:ZAR exchange rate of and a USD:COP exchange rate of 2,961; all of which reflected forward markets as at May 2017 or our internal expectations. 2. Year to date performance is operating unit cost performance between 1 July 2017 and 31 October Operating costs movements for South Africa Aluminium and Mozal Aluminium expressed against FY US dollar per tonne of ore processed. Periodic movements in finished product inventory may impact operating unit costs as related marketing costs and treatment and refining charges may change. Stronger commodity prices are feeding through into higher input costs for our smelters and refineries (price-linked power, alumina, pitch, coke) SLIDE 20

23 OPERATING UNIT COSTS (FY18 SPOT SCENARIO) Operation Unit FY17 FY18e 1 Spot scenario relative to guidance 2-20% 0% 20% 40% Commentary South Africa Aluminium 3 US$/t 1,454 Mozal Aluminium 3 US$/t 1,495 Worsley Alumina US$/t Increasing price-linked cost pressure (power, coke, pitch and alumina of which we are a beneficiary) Increasing price-linked cost pressure (coke, pitch and alumina of which we are a beneficiary) Lagged impact of caustic soda prices offset by lower consumption rates and higher production in H2 FY18 (+US$100/t caustic = +US$5/t alumina cost) Australia Manganese (FOB) US$/dmtu South Africa Manganese (FOB) US$/dmtu Use of higher cost trucking to maximise value and pricelinked royalties Cerro Matoso US$/lb Cannington 4 US$/t South Africa Energy Coal US$/t Controllable Foreign exchange Price linked Realised price Year to date unit costs 1. FY18e Operating unit cost guidance includes royalties (where appropriate) and the influence of exchange rates, and is predicated on various assumptions for FY18, including: an alumina price of US$299/t; a manganese ore price of US$4.50/dmtu for 44% manganese product; a nickel price of US$4.27/lb; a thermal coal price of US$72/t (API4) for South Africa Energy Coal; a silver price of US$16.82/troy oz; a lead price of US$2,135/t; a zinc price of US$2,555/t; an AUD:USD exchange rate of 0.74; a USD:ZAR exchange rate of and a USD:COP exchange rate of 2,961; all of which reflected forward markets as at May 2017 or our internal expectations. 2. FY18 outlook includes royalties (where appropriate) and the influence of exchange rates, and is predicated on various updated assumptions, including: an alumina price of US$411/t; a manganese ore price of US$5.70/dmtu for 44% manganese product; a nickel price of US$5.53/lb; a thermal coal price of US$88/t (API4) for South Africa Energy Coal; a silver price of US$16.93/troy oz; a lead price of US$2,467/t; a zinc price of US$3,165/t; an AUD:USD exchange rate of 0.77; a USD:ZAR exchange rate of and a USD:COP exchange rate of 3,016; all of which reflect year-to-date actuals and forward markets as at October 2017 or our internal expectations. 3. Operating cost movements for South Africa Aluminium and Mozal Aluminium expressed against FY US dollar per tonne of ore processed. Periodic movements in finished product inventory may impact operating unit costs as related marketing costs and treatment and refining charges may change. +/- 5% of guidance +5 to +10% of guidance +10% of guidance SLIDE 21

24 REVISED CAPITAL EXPENDITURE GUIDANCE US$M FY18e prior 1 Run-rate YTD relative to guidance 2 0% 100% FY18e Revised 1 Commentary Worsley Alumina South Africa Aluminium Expenditure tracking to plan with an adverse movement in capital creditors (timing) Mozal Aluminium US$38M AP3XLE energy efficiency project to commence in H2 FY18 Brazil Alumina Potential for lower annual spend with likely deferral of residue lake disposal project South Africa Energy Coal WMC expenditure tracking to plan with an adverse movement in capital creditors (timing) Illawarra Metallurgical Coal ~US$30M reduction to guidance in FY18 with deferral of underground development Australia Manganese Investment in tailings capacity to accelerate in H2 FY18 South Africa Manganese Equipment purchases budgeted for H2 FY18 Cerro Matoso La Esmeralda completed in Q3 FY18 Cannington Sustaining capital expenditure Major Capital Expenditure broadly tracking to plan (with the exception of Illawarra Metallurgical Coal), despite an adverse move in the US dollar Section 102 licence extension and approval for Klipspruit life extension project delayed to late Q2 FY18 Total capital expenditure Sustaining capital expenditure at FY18 spot scenario US$485M 3 Year to date expenditure annualised within 5% of guidance Year to date expenditure annualised between 5% and 10% variation from guidance Year to date expenditure annualised greater than 10% variation from guidance 1. FY18e Sustaining capital guidance includes the influence of exchange rates, and is predicated on various assumptions for FY18, including: an AUD:USD exchange rate of 0.74; a USD:ZAR exchange rate of 14.17; a USD:COP exchange rate of 2,961 and a USD:BRL exchange rate of 3.33; all of which reflected forward markets as at May 2017 or our internal expectations. 2. Actual spend to 31 October Spot scenario is predicated on an AUD:USD exchange rate of 0.77; a USD:ZAR exchange rate of and a USD:COP exchange rate of 3,016; all of which reflect year-to-date currency rates and forward markets as at October SLIDE 22

25 ILLAWARRA METALLURGICAL COAL GUIDANCE Production (kt) Operating unit costs 1 (US$/t) Capital expenditure 2 (US$M) 1,471 1, , ,455 7,059 5,697 1,150 3, FY15 FY16 FY17 FY18e Metallurgical Coal Energy Coal FY15 FY16 FY17 FY18e FY15 FY16 FY17 FY18e Major capital expenditure Development Sustaining capital expenditure 1. FY18e Operating unit cost guidance includes royalties (where appropriate) and the influence of exchange rates, and is predicated on various assumptions for FY18, including an average blended coal price of US$119/t and an AUD:USD exchange rate of 0.74 both of which reflected forward markets as at May 2017 or our internal expectations. 2. FY18e Sustaining capital guidance includes the influence of exchange rates, and is predicated on various assumptions for FY18, including an AUD:USD exchange rate of 0.74 which reflected forward markets as at May 2017 or our internal expectations. SLIDE 23

26 MARKETS UPDATE Peter Finnimore (Chief Marketing Officer) David Clift (Head of Technical Marketing and Commodity Analysis)

27 KEY CHINA THEMES DRIVING COMMODITY PRICES Alignment between central and local governments Stronger alignment drives implementation of top-down policies and regulations State Owned Enterprises (SOEs) to retain their key role in the economy SOE Reforms Supply side reforms on removing capacity and deleveraging SOEs to improve financial discipline and margins Environmental reforms More focus on pollution control and environmental protection Curtailment of steel, aluminium and alumina output during winter Socialism with Chinese characteristics has entered a new era - President Xi, 19 th Party Congress SLIDE 25

28 OUR MAJOR COMMODITY EXPOSURES FY15 to FY17 Underlying Revenue contribution 1 Manganese 12% FY15 to FY17 Underlying EBITDA contribution 1 Manganese 17% Aluminium & Alumina 43% Aluminium & Alumina 35% 1. Underlying Revenue and EBITDA represents the Group s interest in the manganese operations and is presented on a proportional consolidation basis and excludes G&U costs. Manganese Revenue and EBITDA includes manganese ore and manganese alloy from Australia Manganese and South Africa Manganese. Aluminium and alumina revenue and EBITDA includes Worsley Alumina, Brazil Alumina, South Africa Aluminium and Mozal Aluminium. SLIDE 26

29 MANGANESE MARKET STATUS Manganese ore price and China port stocks 1 (US$/dmtu; Mt) Downward correction as higher prices induce a supply response Mn ore trade flows 2 (Mt, Mn content unadjusted) Increasing ore supply tightness due to rail disruptions in South Africa, environmental related stoppages in China, limited stocks and strong steel output Destocking amidst supply cuts Steel market recovery 10 and increased spread between high and 9 mid grade Exports Imports May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 May-17 Nov-17 Mn ore port stocks Mn ore 44% Mn, CIF China Mn ore 37% Mn, FOB PE 1. Closing chart data as at 30 November All other data at month end. Sources: SteelOrbis, Metal Bulletin. 2. Sources: GTIS, South32 analysis. 0 Australia South Africa Gabon Brazil Ghana Others China India 2015 CY annualised Rest of Asia Rest of World SLIDE 27

30 MANGANESE SUPPLY OUTLOOK Manganese ore cost curve 1 (US$/t, 44% Mn, CIF China, real January 2017) Economic supply 2016 to (Mt ore, 40% Mn) 2017 demand 39Mt 2024 demand 41Mt 50 South Africa, Australia and Gabon are expected to displace higher-cost, lower-quality domestic ore in China and elsewhere 6 Current spot price US$6.16/dmtu South32 manganese production from low cost Australian and South African operations cost curve 2024 cost curve 0 South African supply in Cumulative total, 40% Mn grade South Africa Australia & Gabon China and RoW South32 analysis. SLIDE 28

31 ALUMINA MARKET OVERVIEW Alumina monthly price 1 (US$/t) High Chinese prices driven by transportation regulation and increased raw material costs Sharp rise in prices as tight raw material supply and winter capacity cuts gained momentum China alumina production and imports 2 (Mt, alumina equivalent) Rising supply ex-china and falling Chinese import demand Start of Chinese illegal smelter capacity curtailments Nov 16 Feb 17 May 17 Aug 17 Nov 17 Platts FOB Australia Platts CFR China Platts China Ex-Works (Shanxi) 1. Sources: Platts, South32 analysis. 2. Sources: CRU, South32 analysis, Bx represents bauxite ore YTD annualised Alumina production from domestic Bx Alumina production from imported Bx Alumina imports Aluminium output SLIDE 29

32 ALUMINIUM AND ALUMINA DEMAND Aluminium demand by end-use sector 1 (Mt) Smelter grade alumina demand by region 1 (Mt) CAGR 3% CAGR 3% 60 CAGR 6% 120 CAGR 6% Construction Transportation Electrical Packaging Machinery Others China Middle East and Africa Europe Americas Other Asia India 1. Source: CRU, South32 analysis. SLIDE 30

33 ALUMINA SUPPLY Incremental alumina supply by region 2 (Mt) 12,000 9, ,000 3, Australia India United States Jamaica Brazil Others China India North America Norway&Iceland Russia South Africa For personal use only Alumina trade flows 1 (kt) Exports Imports Diversified traded market, although China sets the marginal spot price given arbitrage between domestic supply and imports Marginal alumina supply growth expected to come from China and Indonesia Middle East Rest of World China Indonesia India Others annualised 1. Source: GTIS, South32 analysis. 2. Source: CRU, South32 analysis. SLIDE 31

34 ALUMINA MARGINAL COST OF SUPPLY China bauxite mineralisation quality by region 1 (Mt) Alumina marginal producer cost breakdown 2 (US$/t, real January 2017) 1, Consensus long term price is below marginal cost and inducement of new supply 1,500 1,200 Central & North Bauxite quality deteriorated with higher discovery rate of lower quality bauxite 1% 46% Southwest 34% Current (2017) Forecast (2025) 4% % 44% 14% 44% 40% 42% 46% 7% 51% 15% Al/Si<4 4<Al/Si<6 6<Al/Si<8 8<Al/Si 1. Note: Central and North China comprise of Hubei and Shanxi; Southwest comprise of Guizhou, Guangxi and Yunnan. Sources: CM Group, South32 analysis. 2. Source: Aladdiny, South32 analysis. 3. Capital includes capital payback and return at 8% Chinese marginal refinery Chinese refinery using domestic bauxite Induced Indonesian refinery using captive bauxite Induced Chinese refinery using imported bauxite Bauxite Caustic Energy & Power Other (incl Carbon) Capital³ SLIDE 32

35 REFINERY AND SMELTER RAW MATERIAL INPUTS Caustic soda price (US$/t) Average price Predominantly priced on an M-1 basis Spot price Raw material input prices 3 and LME Aluminium (US$/t) Pitch and aluminium fluoride predominantly priced on an M-1 basis Petcoke priced on a quarterly or M-1 basis 2,800 2, , Jan 14 Jul 14 Jan 15 Jul 15 Jan 16 Jul 16 Jan 17 Jul Jul 14 Dec 14 Jun 15 Nov 15 May 16 Oct 16 Apr 17 Sep 17 Coke (LHS) Aluminium (RHS) Pitch (LHS) Aluminium Fluoride (RHS) Smelter raw material basket cost inflation (% of LME Aluminium) 3,4 Cost push is evident for raw materials across % 40% 20% Jul 14 Dec 14 Jul 15 Dec 15 Jul 16 Dec 16 Jul 17 the value chain: Prices coming off multi-year lows for many inputs Expected to remain elevated until at least end of year Likely to impact re-starts/shuts Increase in smelter basket driven mostly by the recent increase in alumina prices 1. Average price between 2 January 2014 and 30 November 2017 on an M-1 basis. Source IHS Markit. 2. Spot price as at 30 November Source IHS Markit. 3. Sources: LME, Baiinfo, Aladinny, AZ China, CRU, Platts, Jacobs. 4. Calculation assumes 1t of Aluminium, 1.9t Alumina, 0.35t Coke, 0.075t Pitch and 0.02t Aluminium Fluoride. SLIDE 33

36 REFINERY AND SMELTER RAW MATERIAL PROCUREMENT South32 smelter and refinery raw material input suppliers Our Marketing function procures strategically important inputs: Contracting strategy to lock in annual volumes, not price Security of supply and quality adherence is paramount Our well diversified supply base is vital to ensure uninterrupted supplies We have deliberately avoided geographical concentration, helping avoid some prevailing country-specific impacts Our smelters have their own carbon plants for anode baking Pitch suppliers Coke suppliers Caustic Soda suppliers Aluminium Fluoride suppliers Cathode suppliers SLIDE 34

37 OPERATIONS UPDATE Paul Harvey (Chief Operating Officer, Australia) Mike Fraser (Chief Operating Officer, Africa)

38 ILLAWARRA METALLURGICAL COAL Transforming culture and performance at Appin colliery Dendrobium next domain Recent production disruptions have contributed to temporary impact to price realisation Ownership 100% FY17 Illawarra Metallurgical Coal hard coking coal sales External Product Metallurgical and energy coal (FY17: 80% / 20%) Workforce FY17 average 1,800 full time equivalent (FTE) employees and contractors Logistics Road haulage to Port Kembla Coal Terminal (PKCT) 8km to 38km in distance from mining operations for export coal Rail to BlueScope Steel's blending yard Royalty rates 6.2% or 7.2% (determined on the depth of underground coal mining) levied on revenue Realised pricing Premium to average of Low-Vol Hard Coking Coal Index FOB Australia and Low-Vol Coking Coal FOB Australia index Key infrastructure & contracts 16.7% ownership interest in Port Kembla Coal Terminal Long term coal supply agreement with Bluescope Steel (expires 2032) Electricity from NSW grid Sales volumes by end market Sales volumes by contracting approach Sales volumes by pricing approach Average realised metallurgical coal sales price and weighted average index price (US$/t) Spot price Domestic Index Term Export Negotiated with index fall back Spot Quarterly Spot fixed 85 H2 FY16 H1 FY17 H2 FY17 FY18 YTD² Average realised sales price 1. Spot price as at 30 November Source Platts Low-Vol Hard Coking Coal Index FOB Australia. 2. FY18 YTD average realised sales price reflects YTD October 2017 (1 July to 31 October 2017). 3. Weighted average index price reflects South32 quarterly sales volume weighted average of Platts Low-Vol Hard Coking Coal Index FOB Australia on the basis of a one month lag (month minus one or M-1 ) for each six month period. Weighted average index price³ SLIDE 36

39 APPIN COLLIERY RESTART PLAN Phase I (~3 months) Review systems, processes and organisational structure Work with the regulator to address concerns Phase II (~12 months) Safe commencement of staged ramp-up Focus on gas drainage and ventilation Transform culture and performance Phase III Ability to safely return operation to historical levels of production Dedicated team of internal and external experts assigned to restart plan Complete root cause analysis, including an assessment of any shortcomings in the Appin Area 9 project design (approved June 2012) Ensure fit for purpose organisational structure and leadership capability Implement minimum restart requirements identified in our review Complete longwall 901 in late August 2017 Move Area 9 longwall to 902 panel Complete design of staged ramp-up and recommence activity at longwall 707 Achieve steady state production at longwall 707 Demonstrate reliability and capability of ventilation, gas drainage and strata management systems Ramp-up continuous miner fleet to achieve required development rates Refurbishment of SW1 coal clearance Ongoing engineering studies Capture and embed learnings from Phase I and Phase II On completion of Phase II, recommence twin longwall configuration Maintain safe and sustainable operating performance Maintain reliable and predictable gas drainage and ventilation systems SLIDE 37

40 ILLAWARRA LONGWALL CONFIGURATION Appin colliery restart plan Phase I Phase II Phase III Expected longwall configuration Single longwall restart activities complete Introduced additional gas drainage drilling capacity Refurbish ventilation fans at vent shaft 6 Single longwall configuration at Appin colliery Focus on transforming culture and performance Refurbishment of SW1 coal clearance Develop remote production and development capability Right size organisation to align with ramp-up configuration Twin longwall configuration at Appin colliery Maintain safe and sustainable performance Appin Area 7 LW707 LW708 Appin Area 9 LW901 LW902 Dendrobium LW12 LW13 LW14 FY17 FY18e FY19e Other activity Enterprise Bargaining Agreement for underground crews at Appin colliery and Dendrobium SLIDE 38

41 ILLAWARRA METALLURGICAL COAL GUIDANCE Saleable production guidance (kt) 1,471 1,307 7,455 7,059 1,376 5,697 1,150 3,350 FY15 FY16 FY17 FY18e 1,000 Single longwall at Appin colliery for remainder of FY18 Expect to return to a twin longwall configuration in December 2018 quarter Beyond FY19 continue to improve development and longwall productivity and ramp-up towards historical rates of production Cost guidance 1 (US$M) FY15 FY16 FY17 FY18e Cost base is mostly Australian dollar denominated with circa two-thirds fixed Unit cost performance will improve substantially with an increase in volumes No material change to cost base from additional gas management activities at Appin colliery Ongoing commitment to reset the culture at Appin colliery and improve productivity Metallurgical coal Energy coal Sustaining capital expenditure guidance, depreciation and amortisation (US$M) Coal Reserves (Mt) FY18 sustaining capital US$120M, with ~ US$20M less underground development following the delayed restart at Appin colliery New area for Dendrobium next domain is outside of current Reserves FY15 FY16 FY17 FY18e D&A Development Sustaining capital expenditure FY15 FY16 FY17 depletion Proved Coal Reserves Updated resource & mine plan FY17 Probable Coal Reserves 1. Refer to Appendix for cost base breakdown. SLIDE 39

42 DENDROBIUM NEXT DOMAIN Potential to unlock high-quality coal resources at Dendrobium Leverages existing infrastructure Area 6 Study and development time frame of 4-6 years Assessing Area 5 and Area 6 Area 5 Area 3 Dendrobium Shafts Prefeasibility on track for completion in March 2018 Environmental and community impact assessments have commenced Dendrobium Pit Top Wollongong Port Kembla Coal Terminal Dendrobium Coal Preparation Plant Port Kembla SLIDE 40

43 CANNINGTON Optimise stope sequence for recovery to maximise value Increased focus on scheduling to manage geotechnical complexity External Make decision on open pit post-2020 Long term lead concentrate treatment and refining charges negotiated to lowest level in a decade FY17 lead concentrate sales Ownership 100% Product Lead and zinc concentrates, both containing silver Sales volumes by end market Domestic Export Workforce FY17 average 780 FTE employees and contractors Logistics Majority of concentrate trucked to Cloncurry and then railed 800km to the port of Townsville Royalty rates Sliding scale of 2.5% to 5% levied on revenue Exploration spend Historical: FY15 US$5M, FY16 US$3M and FY17 US$2M Guidance: FY18e US$2M Payabilities Lead concentrate (95% Ag, 95% Pb), zinc concentrate (70% silver conditional on silver content exceeding 93g/t, 85% zinc) Key contracts Gas supplied by Santos (expires 2019) Contract for power and steam generation by EDL, including solar, commencing January 2018 Trucking and rail agreements with Linfox and Aurizon Sales volumes by contracting approach Term Spot M+1 Sales volumes by pricing approach M+2 M+3 FY17 zinc concentrate sales Sales volumes by end market Domestic Export Sales volumes by contracting approach Term Spot Sales volumes by pricing approach M+1 M+2 SLIDE 41

44 CANNINGTON MINE SCHEDULING AND STOPE DESIGN Sharpened focus on mine scheduling and stope design to maximise payable metal recovery over the life of mine Reduced stope size to improve geotechnical stability in the underground mine and maximise resource recovery Results in increasing underground activity required to deliver mine output Underground crushing ceased end of September 2017, subsequent ramp-up of trucking activity proceeding to plan FY19 throughput improves on availability of underground crushing Increasing complexity will drive greater variability of mine performance Underground activity Average stope size and number of stopes extracted Mine production Ore mined (Mwmt) FY12 FY13 FY14 FY15 FY16 FY17 FY18e FY19e Average stope size (kwmt) Number of stopes FY12 FY13 FY14 FY15 FY16 FY17 FY18e FY19e Ore mined Average Ore Reserve mined per annum 1 1. Converted from dry metric tonnes to wet metric tonnes. SLIDE 42

45 CANNINGTON GRADE PROFILE Grades currently at or below reserve grade High-grade stopes will be sequenced to maximise metal recovery over the life of the mine Geometallurgical studies will optimise process plant recovery through optimal grinding and flotation for specific ore types Silver grade and payable metal recovery 1 Lead grade and payable metal recovery 1 Zinc grade and payable metal recovery 1 100% % 8% 100% 7% 90% 80% 70% 60% 190 g/t % 80% 70% 60% 5.56% 7% 6% 5% 4% 3% 2% 1% 90% 80% 70% 60% 3.49% 6% 5% 4% 3% 2% 1% 50% 0 50% 0% 50% 0% Silver recovery (%) Silver grade (g/t) Lead recovery (%) Lead grade (%) Zinc recovery (%) Zinc grade (%) Reserve silver grade Reserve lead grade Reserve zinc grade 1. Stated recoveries are based on payable metal recovered from ore processed. SLIDE 43

46 CANNINGTON GUIDANCE Saleable production guidance FY15 FY16 FY17 FY18e FY19e Lower grades and declining throughput have reduced payable metal production 10.0 Geotechnical conditions and smaller - stopes will present operational challenges as remaining reserves are extracted - Cost guidance 1 (US$M) FY15 FY16 FY17 FY18e Cost base has been re-set lower to mitigate impact of lower throughput Structural reduction in treatment and refining charges also achieved Cost base is expected to remain largely unchanged as initiatives in support of third party product, gas and power contracts offset the cost of mining an increasing number of stopes Lead production (kt) Zinc production (kt) Silver production (Moz) Sustaining capital expenditure guidance, depreciation and amortisation (US$M) Ore Reserves (Mt) FY18 sustaining capital expenditure marginally above trend due to crusher replacement project, before reverting to historical levels Exploration activity of US$2M planned in FY18 as we continue to invest through the drill-bit to add value FY15 FY16 FY17 FY18e D&A Sustaining capital expenditure FY15 FY16 FY17 depletion Proved Ore Reserves Updated resource & mine plan FY17 Probable Ore Reserves 1. Refer to Appendix for cost base breakdown. SLIDE 44

47 SOUTH AFRICA ENERGY COAL Establish as a stand-alone business to realise full potential Klipspruit and Khutala life extension projects Discounts to benchmark price have narrowed Ownership 92% 4 FY17 South Africa Energy Coal export sales Product Export and domestic energy coal (FY17: 42% / 58%) Workforce FY17 average 7,560 FTE employees and contractors Sales volumes by end market Export Logistics WMC: Export coal railed 558km to Richards Bay Coal Terminal (RBCT), domestic production conveyed to Duvha power station Klipspruit: Export coal railed 611km to RBCT Khutala: Conveyor feeding domestic coal to Kendal power station (sold to Eskom on a cost-plus basis) Royalty rates Sliding scale based on a formula linked to adjusted underlying EBIT and revenue in line with South African royalty tax definitions Realised pricing Export coal receives a discount to API4 index for ash content Domestic coal sold on a cost-plus basis to Kendal from Khutala and at a fixed price from the WMC Key infrastructure & contracts 21.0% ownership interest in Richards Bay Coal Terminal Two coal supply agreements with Eskom (expire 2033 and 2034) Transnet rail agreement (expires 2024) Sales volumes by contracting approach Sales volumes by pricing approach Average realised energy coal sales price and weighted average index price (US$/t) Spot price Term Index Spot Fixed Average realised export sales price 1. Spot price as at 30 November Source Argus/McCloskey API4 index (RBCT FOB). Weighted average index export price³ 2. FY18 YTD average realised sales price reflects YTD October 2017 (1 July to 31 October 2017). 3. Weighted average index price reflects South32 quarterly sales volume weighted average of the RBCT FOB (API4) on the basis of a one month lag (month minus one or M-1 ) for each six month period. 4. South32 s interest in South Africa Energy Coal is accounted at 100% until broad-based black economic empowerment (B-BBEE) vendor loans are repaid. H2 FY16 H1 FY17 H2 FY17 FY18 YTD² Average realised domestic sales price SLIDE 45

48 KLIPSPRUIT LIFE EXTENSION PROJECT 4.3B Rand project secures the colliery s future for at least another 20 years 1 Internal rate of return >20% 1 Unlocks 616Mt 1 of resource Leverages existing infrastructure 8Mtpa of export coal, partially mitigating rail take-or-pay obligations expiring in 2024 Flexibility to pursue most attractive domestic and export markets beyond 2024 KPSX project map Klipspruit and life extension production (Mt) KPSX capital expenditure profile (Rand Billions) FY15 FY16 FY17 FY18e FY19e Life of project average FY18e FY19e FY20e 1. Refer to market announcement dated 27 November 2017 South32 approves Klipspruit life extension project. SLIDE 46

49 SOUTH AFRICA ENERGY COAL GUIDANCE Saleable energy coal production guidance 1 (kt) 18,123 16,150 16,825 14,856 16,717 16,000 15,850 12,196 11,500 13,500 FY15 FY16 FY17 FY18e FY19e Export sales volumes continue to be impacted by weather related congestion at RBCT Export volumes expected to improve in FY19 following investment in new areas at the WMC Klipspruit Life Extension to contribute export production from FY19 1, Cost guidance 1,2 (US$M) 1, FY15 FY16 FY17 FY18e Establish as a stand-alone company from April 2018 with tailored functional support, systems and governance processes to sustainably improve the financial performance Domestic production Export production Sustaining capital expenditure guidance, depreciation and amortisation 1 (US$M) Coal Reserves 1 (Mt) Sustaining capital required to open new pits at WMC FY15 FY16 FY17 FY18e D&A Sustaining capital expenditure FY15 FY16 FY17 depletion Proved Coal Reserves Updated resource & mine plan FY17 Probable Coal Reserves 1. South32 s interest in South Africa Energy Coal is accounted at 100% until broad-based black economic empowerment (B-BBEE) vendor loans are repaid. 2. Refer to Appendix for cost base breakdown. SLIDE 47

50 SOUTH AFRICA MANGANESE ORE Optimise product mix and route to market to maximise value Unlock value of fines stockpiles Continue to take advantage of market conditions by selling additional fine grained product Ownership South Africa Manganese includes a 60% interest in Samancor Manganese (Pty) Ltd and 44.4% in Hotazel Manganese Mines (Pty) Ltd 5 Product Mid-grade manganese ore In FY17 ~80% of manganese ore was exported and ~13% of manganese ore was sold domestically, remainder converted to ferromanganese alloy at Metalloys Workforce FY17 average 1,770 FTE employees and contractors Logistics Exports railed via Transnet or transported by road to three ports 900km to 1,200km away (Port Elizabeth, Durban and Saldanha) Domestic ore distributed by rail and road Royalty rates Sliding scale based on a formula linked to adjusted underlying EBIT and revenue in line with South African royalty tax definitions Realised pricing Dependant on product mix. Metal Bulletin 37% manganese lump ore index (FOB Port Elizabeth, South Africa) Key contracts MECA 2 rail allocation with Transnet (until 2023) expected to be concluded in H2 FY18. FY17 South Africa Manganese ore sales Sales volumes by end market Sales volumes by contracting approach¹ Sales volumes by pricing approach¹ Average realised external manganese ore sales price and weighted average index price (US$/dmtu, FOB) 4.53 Spot price Internal Fixed Month -1 External External Index Month H2 FY16 H1 FY17 H2 FY17 FY18 YTD³ 1. Reflects allocation of external Manganese ore sales. 2. Spot price as at 30 November Source Metal Bulletin. Average realised sales price Weighted average index price⁴ 3. FY18 YTD average realised sales price reflects YTD October 2017 (1 July to 31 October 2017). 4. Weighted average index price reflects South32 quarterly monthly sales volume weighted average of the Metal Bulletin 37% manganese lump ore index (FOB Port Elizabeth, South Africa) on the basis of a one month lag (month minus one or M-1 ) for each six month period % of Hotazel Manganese Mines (HMM) is owned by a Broad-Based Black Economic Empowerment (B-BBEE) consortium comprising Ntsimbintle Mining (9%), NCAB Resources (7%), Iziko Mining (5%) and HMM Education Trust (5%). The interests owned by NCAB Resources, Iziko Mining and HMM Education Trust were acquired using vendor finance with the loans repayable via distributions attributable to these parties, pro rata to their share in HMM. Until these loans are repaid, South32 s interest in HMM is accounted at 54.6%. SLIDE 48

51 SOUTH AFRICA MANGANESE ORE GUIDANCE Saleable Manganese ore production guidance 1 (kwmt) Manganese ore FOB cost guidance 1,2 (US$M) 2,274 1,711 2,038 1,885 Subject to demand FY15 FY16 FY17 FY18e FY19e Operated above 2.9Mwmt (100% share) optimised base rate in September 2017 quarter (3.5Mwmt) Will continue to monitor production rate to take advantage of market conditions FY15 FY16 FY17 FY18e Higher cost trucking and an increase in royalties has impacted year-todate costs Manganese ore sustaining capital expenditure guidance, depreciation and amortisation 1 (US$M) Ore Reserves (Mt) FY15 FY16 FY17 FY18e D&A Sustaining capital expenditure 1. South32 share. 2. Refer to Appendix for cost base breakdown Sustaining capital for fleet replacement at Mamatwan and Tshipi barrier pillar boxcut expected in FY19 at Mamatwan FY15 FY16 FY17 depletion Proved Ore Reserves Updated resource & mine plan FY17 Probable Ore Reserves SLIDE 49

52 AUSTRALIA MANGANESE ORE Optimise product blend and mix Transition to new mining areas Convert Eastern leases to reserves Test potential of Southern lease High grade ore continues to attract strong demand Ownership 60% Product High-grade manganese ore Workforce FY17 average 980 FTE employees and contractors Logistics 16km road train to port facilities at Milner Bay for export Royalty rates Traditional Land Owner royalties: Capped at 2.36% of adjusted FOB revenue (split between Groote Eylandt Aboriginal Trust and Anindilyakwa Land Council) Northern Territory Government: 20% levied on profit Exploration spend Historical: FY15 Nil, FY16 Nil and FY17 US$2M Guidance: FY18e US$4M Realised pricing Metal Bulletin 44% manganese lump ore index (CIF Tianjin, China) Key infrastructure Dedicated ship loader FY17 Australia Manganese ore sales Sales volumes by end market Sales volumes by contracting approach¹ Sales volumes by pricing approach¹ Average realised external manganese ore sales price and weighted average index price (US$/dmtu, CIF) 6.16 Spot price Internal Fixed Month -1 External Index Month H2 FY16 H1 FY17 H2 FY17 FY18 YTD³ 1. Reflects allocation of external Manganese ore sales. 2. Spot price as at 30 November Source Metal Bulletin. 3. FY18 YTD average realised sales price reflects YTD October 2017 (1 July to 31 October 2017). Average realised sales price (US$/dmtu, CIF)⁴ Weighted average index price (US$/dmtu, CIF)⁵ 4. Average realised ore sales prices are calculated as external sales revenue plus freight and marketing costs, divided by external sales volume. 5. Weighted average index price reflects South32 quarterly sales volume weighted average of the Metal Bulletin 44% manganese lump ore index (CIF Tianjin, China) on the basis of a one month lag (month minus one or M-1 ) for each six month period. SLIDE 50

53 AUSTRALIA MANGANESE ORE Optimise performance Improving mobile fleet utilisation and broader mine productivity to address increasing strip ratio and haulage distances over the life of mine port Alyangula Optimising concentrator throughput and yield with a focus on value over volume Unlock Careful monitoring of community impact as we access mining areas in proximity to Angurugu township Southern lease Eastern leases Other leases Mining activity concentrator Angurugu Converting Eastern leases resource to reserve to extend mine life and operational flexibility Identify opportunities Southern lease exploration ongoing, drilling paused to complete endangered species baseline assessment SLIDE 51

54 AUSTRALIA MANGANESE ORE GUIDANCE Saleable Manganese ore production guidance 1 (kwmt) Manganese ore FOB cost guidance 1,2 ($USM) 2,942 3,071 2,994 3,125 Subject to demand FY15 FY16 FY17 FY18e FY19e FY19 production will be optimised in response to market demand FY15 FY16 FY17 FY18e Focus on fleet utilisation, mine productivity and use of contractors to offset the impact of increasing strip ratio, longer haulage distances and lower yield 0 Manganese ore sustaining capital expenditure guidance, depreciation and amortisation 1 (US$M) Ore Reserves (Mt) Capital to open up Eastern leases expected between FY23 and FY Eastern leases provide potential to lift reserve with their inclusion in the mine plan FY15 FY16 FY17 FY18e D&A Sustaining capital expenditure FY15 FY16 FY17 depletion Proved Ore Reserves Updated resource & mine plan FY17 Probable Ore Reserves 1. South32 share. 2. Refer to appendix for cost base breakdown. SLIDE 52

55 CERRO MATOSO Optimise energy mix and cost Maximise furnace input Regional exploration for nickel and copper/gold Near mine, lower-grade resource opportunities FeNi realising improved premiums year to date FY17 Cerro Matoso Ferronickel sales Ownership 99.9% Product Ferronickel Workforce FY17 average 1,770 FTE employees and contractors Logistics Ferronickel transported approximately 260km by road to Port of Cartagena Sales volumes by type Sales volumes by contracting approach Spec Quarterly Off-spec Spot Royalty rates 13% levied on mine gate profit Exploration spend Historical: FY15 US$9M, FY16 US$5M and FY17 US$5M Guidance: FY18e US$7M Realised pricing London Metal Exchange Nickel plus/minus Ferronickel China premium 4 Key contracts Electricity supply agreement (expiration date 2018) Gas supply agreement (expiration date 2021) Sales volumes by pricing approach Average realised nickel sales price and weighted average index price (US$/lb) 5.12 Spot price M-1 M M H2 FY16 H1 FY17 H2 FY17 FY18 YTD² 1. Spot price as at 30 November Source LME. 2. FY18 YTD average realised sales price reflects YTD October 2017 (1 July to 31 October 2017). 3. Weighted average index price reflects South32 quarterly monthly sales volume weighted average of the Nickel (LME) cash index for each six month period. 4. Metal Bulletin 26-32% nickel contained (CIF China). Average realised sales price Weighted average index price³ SLIDE 53

56 CERRO MATOSO Optimising performance Improving furnace performance by de-bottlenecking plant Optimising energy procurement by establishing an independent energy company Planeta Rica Unlock Converting high-quality resource to reserve Successful ramp-up of La Esmeralda delivers temporary production uplift Potential of Planeta Rica illustrates further resource opportunity (under study) Expanding pyrometallurgical operating window (Fe/Mg ratio) to support blending for maximum nickel grade Ore upgrading to maximise nickel production with existing plant capacity Identify Identifying new exploration targets for higher-grade nickel laterite ore Copper-gold exploration Puerto Libertador La Esmeralda Montelibano Mine & processing plant Caceres Concession 51 Copper-gold exploration tenements SLIDE 54

57 CERRO MATOSO GUIDANCE Saleable nickel production guidance 1 (kt) Cost guidance 1,2 (US$M) FY15 FY16 FY17 FY18e FY19e Temporary lift in production across FY18 and FY19 from higher grade La Esmeralda deposit Assessing options to extend ore from La Esmeralda beyond FY19 Testing regional exploration potential for plant feed beyond La Esmeralda FY15 FY16 FY17 FY18e Substantial reduction to controllable cost base in recent years with the focus now on incorporating La Esmeralda into mine plan Energy optimisation presents next phase of opportunity - Sustaining capital expenditure guidance, depreciation and amortisation 1 (US$M) Ore Reserves (Mt) No major furnace re-build until early 2020 s FY15 FY16 FY17 FY18e D&A Sustaining capital expenditure FY15 FY16 FY17 depletion Proved Ore Reserves Updated resource & mine plan FY17 Probable Ore Reserves 1. South32 share. 2. Refer to Appendix for cost base breakdown. SLIDE 55

58 WORSLEY ALUMINA Further improve industry position by leveraging energy supply flexibility Unlock low impurity bauxite resource at West Marradong Steep increase in price over the December quarter expected to be realised on an M-1 basis Ownership 86% FY17 Worsley Alumina sales Product Alumina Workforce FY17 average 1,990 FTE employees and contractors Logistics Bauxite ore supplied by ~50km conveyor Refined alumina railed to Bunbury Port Royalty rates 1.65% levied on the Bunbury alumina price Realised pricing Majority of sales are linked to Alumina index other than legacy Mozal Aluminium contract at LME linked pricing Negotiated price for spot sales Key infrastructure & contracts Two multi-fuel co-generation units (32 year lease commenced 2014) Two gas supply agreements (expiration date 2018 and 2023) Coal supply agreements Griffin Coal (expiration date 2025) and Premier Coal (expiration date 2021) Sales volumes by end market Sales volumes by contracting approach¹ Sales volumes by pricing approach¹ Internal Term M-1 (linked to AA index) Average realised alumina sales price and weighted average index price (US$/t) Spot price External Spot Negotiated M-1 (linked to Al index 2 ) Reflects percentage allocation of internal and external sales. 2. Represents sales referenced to a legacy Mozal Aluminium contract. 3. Spot price reflects price on 30 November Source Platts Alumina Index (PAX) Free on Board (FOB) Australia. 4. FY18 YTD average realised sales price reflects YTD October 2017 (1 July to 30 October 2017). 5. Weighted average index price reflects South32 quarterly sales volume weighted average of Platts Alumina Index (PAX) FOB Australia on the basis of a one month lag (month minus one or M-1 ) for each six month period. H2 FY16 H1 FY17 H2 FY17 FY18 YTD⁴ Average realised sales price Weighted average index price⁵ SLIDE 56

59 WEST MARRADONG BAUXITE FEED WILL REDUCE CAUSTIC SODA CONSUMPTION AND DEFER CAPITAL West Marradong adds 74Mt of higher quality bauxite to the Worsley Mineral Resource 2. West Marradong will be accessed under an existing sublease agreement with Alcoa Access to bauxite Defers capital spend Blending optionality Caustic soda consumption to 30 June 2017 (kgnaoh/ta) Average consumption Higher available alumina and lower reactive silica content Contributes to lower average caustic consumption (~94kgNaOH/tA) across FY19 and FY20 Will push out capital intensive move to next mining hub, now expected in late 2020 s Last move completed in FY12 (Saddleback to Marradong) at a capital cost of US$552M 4 Extends period for current blending of Marradong and Saddleback ore Provides flexibility around mine and resource planning Converting high quality West Marradong resource to reserve will unlock significant value 0.0 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Worsley Mineral Resources 3 Total Mineral Resources Monthly consumption Average consumption¹ Deposit Ore type Mt %A. Al 2 O 3 % R. SiO 2 Worsley (including West Marradong) Laterite 1, Average consumption between 1 July 2013 and 30 June West Marradong Mineral Resources consist of 27Mt measured, 40Mt indicated and 7Mt inferred Mineral Resources. 3. Please refer to appendix for the updated Worsley Reserve and Resource statement % basis. SLIDE 57

60 WORSLEY ALUMINA GUIDANCE Saleable alumina production guidance 1 (kt) 1500 Cost guidance 1,2 (US$M) 3,819 3,961 3,892 3,975 3,965 FY15 FY16 FY17 FY18e FY19e 1000 Refinery operated at maximum technical capacity in FY17 40kt of hydrate stock currently on hand with calcined alumina production to increase in H2 FY FY15 FY16 FY17 FY18e Cost reduction driven by employee productivity and optimisation of the energy mix Lower caustic usage from West Marradong and flexible energy mix are expected to offset the impact of higher caustic soda prices Sustaining capital expenditure guidance, depreciation and amortisation 1 (US$M) Ore Reserves (Mt) Access to West Marradong resource pushes out capital intensive move to next mining hub, now expected in late 2020 s Reserve of 291Mt bauxite at 27.3% available alumina and 1.8% reactive silica Large, consistent and cheap source of bauxite that supports production of low-impurity alumina FY15 FY16 FY17 FY18e D&A Sustaining capital expenditure FY15 FY16 FY17 depletion Updated resource & mine plan FY17 Proved Ore Reserves Probable Ore Reserves 1. South32 share. 2. Refer to Appendix for cost base breakdown. SLIDE 58

61 SOUTH AFRICA ALUMINIUM Study energy efficiency initiatives given improved reliability in power supply Resolve long-term power supply agreement with Eskom Supporting local downstream beneficiation through hot liquid metal sales Ownership 100% Product Aluminium ingots and liquid hot metal Workforce FY17 average 2,420 FTE employees and contractors FY17 South Africa Aluminium sales Sales volumes by end market Domestic External Export Logistics Alumina supplied via conveying system following shipping from Worsley Alumina, Western Australia Ingots exported through Richards Bay and Durban Liquid hot metal supplied to domestic customers (FY17: 116kt) Realised pricing London Metal Exchange Aluminium plus physical premium Key infrastructure & contracts Electricity supplied by Eskom Port facility agreements (expiration date 2019) Anode baking plant Pot relining Historical: FY15 US$33M (136 pots, US$245k per pot), FY16 US$35M (183 pots, US$191k per pot) and FY17 US$18M (75 pots, US$234k per pot) Guidance: FY18e US$28M (139 pots, US$203k per pot) Sales volumes by contracting approach Sales volumes by pricing approach Average realised aluminium sales price and weighted average index price (US$/t) 2,033 Spot price 1 1,545 1,664 1,633 1,732 1,883 1,975 Term M-1 & M 2,042 2,094 Spot M+1 1. Spot price as at 30 November Source LME. 2. FY18 YTD average realised sales price reflects YTD October 2017 (1 July to 31 October 2017). 3. Weighted average index price reflects South32 quarterly monthly sales volume weighted average of the settled Aluminium (LME Cash) for each six month period. H2 FY16 H1 FY17 H2 FY17 FY18 YTD² Average realised sales price Weighted average index price³ SLIDE 59

62 SOUTH AFRICA ALUMINIUM GUIDANCE Saleable aluminium production guidance (kt) Cost base 1 (US$M) 1,500 1, FY15 FY16 FY17 FY18e FY19e Smelter operating at maximum technical capacity, benefitting from improved reliability of power supply 500-1,224 1,014 1,037 FY15 FY16 FY17 Expect to see raw material cost inflation, including for price linked power supply Sustaining capital expenditure guidance, depreciation and amortisation (US$M) FY15 FY16 FY17 FY18e D&A Sustaining capital expenditure 1. Refer to Appendix for cost base breakdown. SLIDE 60

63 SOUTH AFRICA ALUMINIUM ENERGY SUPPLY Power sourced from state utility, Eskom, under two long term contracts: Potlines one and two; LME aluminium and ZAR:USD linked Potline three; Rand based, linked to South African and United States producer price indices Electricity tariff sensitivity to aluminium prices 2 (Indexed) External Smelter is one of Eskom s largest customers 1,500 1,700 1,900 2,100 2,300 2,500 Eskom has continued to improve network performance and invested heavily in new generation capacity in recent years: 9,100MW expected to be commissioned between CY17 and CY22 1 Contract for potlines one and two: South Africa Aluminium Load shedding impacts (Total interrupted hours) Mozal Aluminium Dispute regarding termination date (2028 vs. 2020) Objective is to resolve with a tariff satisfactory to all parties FY15 FY16 FY17 FY18 YTD³ South Africa Aluminium Mozal Aluminium 1. Source: Eskom public disclosures. 2. Represents South Africa Aluminium and Mozal Aluminium FY18 electricity tariffs, indexed and shown as a sensitivity to the LME aluminium price. 3. FY18 YTD reflects the period between 1July and 31 October SLIDE 61

64 MOZAL ALUMINIUM Maintain supply base diversification for raw materials AP3XLE energy efficiency project will deliver 5% production increase (full benefit FY24) Realises premium pricing for product Ownership 47.1% FY17 Mozal Aluminium sales Domestic Product Aluminium ingots and liquid metal sales (to Midal) Workforce FY17 average 2,290 FTE employees and contractors Sales volumes by end market Export Logistics Alumina supplied from Worsley Alumina, Western Australia Aluminium ingots exported via the Matola Port, 15km from the smelter Hot liquid metal supplied to domestic customers by road (FY17: 47kt 4 ) Realised pricing London Metal Exchange Aluminium plus physical premium Sales volumes by contracting approach Sales volumes by pricing approach Term Term M-1 & M Spot M+1 Key infrastructure & contracts Hydro Power contract with Motraco (joint venture between Eskom and Mozambique and Swaziland electrical utilities) (expiration date 2026) Pot relining 4 Historical: FY15 US$21M (91 pots, US$231k per pot), FY16 US$23M (109 pots, US$207k per pot) and FY17 US$19M (94 pots, US$204k per pot) Guidance: FY18e US$17M (82 pots, US$202k per pot) Average realised aluminium sales price and weighted average index price (US$/t) Spot price 1 2,033 1,545 1,667 1,677 1,776 1,882 2,036 2,042 2, Spot price as at 30 November Source LME. 2. FY18 YTD average realised sales price reflects YTD October 2017 (1 July to 31 October 2017). 3. Weighted average index price reflects South32 quarterly sales volume weighted average of the settled Aluminium (LME Cash) index for each six month period. 4. Presented on a 100% basis. H2 FY16 H1 FY17 H2 FY17 FY18 YTD² Average realised sales price Weighted average index price³ SLIDE 62

65 MOZAL ALUMINIUM GUIDANCE Saleable aluminium production guidance 1 (kt) Cost base 1,2 ($USM) 500 1, FY15 FY16 FY17 FY18e FY19e Smelter set annual production record in FY17 and quarterly production record in September quarter FY15 FY16 FY17 1, Expect to see cost base inflation in FY18 with increased prices for raw material inputs, particularly alumina Sustaining capital expenditure guidance, depreciation and amortisation 1 (US$M) AP3XLE capital US$18M 1 over 7 years, from FY18 FY15 FY16 FY17 FY18e D&A Sustaining capital expenditure 1. South32 share. 2. Refer to Appendix for cost base breakdown. SLIDE 63

66 IDENTIFY NEW OPPORTUNITIES Graham Kerr (Chief Executive Officer)

67 ADDING TO PORTFOLIO WITH HIGH QUALITY OPTIONS For personal use only Capital requirements Prospective project Attractive commodity Quality partner Favourable jurisdiction AusQuest 1 Reserve potential Resource potential (with upside) Northern Shield Resources Huckleberry AusQuest 1 Blue Billy JV (Drilling) Chololo (Drill permitting) Cerro de Fierro (Drill permitting) Trilogy Metals Bornite & Arctic Arizona Mining Hermosa project Attractive development opportunity Project life cycle (Illustrative) Advance options to improve overall quality Spending ~US$20M 2 on greenfield exploration in FY18 Expected to increase to ~US$30M in FY19 as activity increases Cycle options to improve portfolio over time Project maturity Concept Exploration Discovery Development 1. Strategic alliance to identify early stage base metal projects. Of six projects selected to date, Blue Billy (being drilled), Chololo and Cerro de Fierro (drill permitting) have been advanced to drill testing. 2. Excludes prepayment designed to move shareholding in Arizona Mining to 19.9%. SLIDE 65

68 CURRENT OPPORTUNITIES Concept Discovery AusQuest Strategic Alliance 1 Trilogy Metals Option Agreement Zn (±Cu,Pb) Blue Billy JV (Australia) Cu, Pb, Zn Au, Ag Bornite & Arctic (Alaska) Ni, Cu Cu, Au Jimberlana (Australia) Balladonia (Australia) Chololo JV pending (Peru) Los Otros (Peru) Cerro de Fierro JV pending (Peru) 3.8Mt contained Cu in Mineral Resource 2 (Arctic 2.95% Cu, Bornite Open Pit 0.97% Cu, Bornite below pit 2.9% Cu) Testing high-grade extension at Bornite First season ended October 2017 Cerro Matoso Cu, Au Exploration Puerto Libertador (Colombia) Greenfield exploration within our own leases near Cerro Matoso in Colombia Trilogy Metals Option Agreement Option to form a joint venture with Trilogy Metals US$30M to be spent over three years to keep option in good standing Three annual tranches of US$10M, with option to proceed to a joint venture at any time Option exercised by contributing approximately US$150M to the joint venture Northern Shield Resources Option Agreement 1 Cu, Ni, PGE Huckleberry (Canada) 1. The opportunities are conceptual in nature, there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if exploration will result in the estimation of a Mineral Resource. 2. Trilogy Metals Mineral Resource estimate, published 22 April 2017 on their website ( prepared in accordance with NI and the CIM definition standard. SLIDE 66

69 INVESTMENT IN ARIZONA MINING Arizona Mining Zn, Pb, Ag Hermosa (Arizona) Initial investment of US$81M for 15% stake in TSX listed Arizona Mining (C$2.45 per share) Subsequently entered into prepayment designed to move investment to 19.9% Hermosa Project including underground Taylor sulphide deposit Current Mineral Resource of 72Mt (M&I) 10.5% ZnEq. Funds to advance feasibility study, advance permitting and further exploration Representation on the operating committee Recently nominated a director, who was subsequently appointed to the Board 1. Measured and Indicated Mineral Resource as reported by Arizona Mining in Technical Report March 2017, in accordance with NI of Canadian Securities Administrators, stated at a cut-off grade 4% ZnEq, reported using units of short tons. ( 2. Map sourced from Arizona Mining Corporate Presentation November AMI unpatented claims AMI_patented_claims SLIDE 67

70 CASH FLOW AND BALANCE SHEET UPDATE Brendan Harris (Chief Financial Officer)

71 CASH FLOW UPDATE Performance four months to end October 2017 US$386M of underlying free cash flow 1 US$85M received from EAI 2 US$333M Ordinary final dividend and US$71M returned via capital management program US$284M impact from working capital movements US$57M impact from Arizona Mining 3 prepayment and movements in debt instruments 4 Short-term drivers Increase in alumina and nickel prices (M-1 book structure) partially offset by raw material input costs Net cash balance and cash flows as at 31 October 2017 (US$M) , , ~US$140M distribution from EAI in December 2017 Partial release of working capital (force majeure at RBCT may delay this process) ~US$210M tax payment in December Underlying free cash flow before movements in working capital, distributions from EAI, dividends, capital management, Arizona Mining prepayment and movements from debt instruments. 2. South32 share of net distributions from EAI includes net debt movements and dividends. 3. On 14 September 2017, we entered into an over-the-counter equity forward contract to acquire up to an additional 15 million shares in Arizona Mining Incorporated (Arizona Mining), equivalent to 4.9% of the Common Shares on issue. South32 settled the contract in full before the program commenced. 4. Includes currency movements on finance leases and joint venture loans, and repayment of finance leases. FY17 Net cash For personal use only Underlying free cash flow EAI distribution Dividend Capital management Working capital Arizona prepayment & debt instruments Oct 2017 net cash EAI distribution Tax payment Capital management program outstanding SLIDE 69

72 CAPITAL MANAGEMENT FRAMEWORK Maximise cash flow Competition for excess capital - Investment in the business - Acquisitions - Greenfield exploration - Share buy-backs - Special dividends Distribute a minimum 40% of Underlying earnings as ordinary dividends in each six month period Maintain safe and reliable operations and an investment grade credit rating through the cycle Cash flow priorities For personal use only Framework remains unchanged since listing ROIC Return on invested capital (%) 6.2% ~US$700M reduction in controllable costs and lower sustaining capital expenditure increased ROIC by 5% (FY15 to FY17) 1.7% 11.4% 9.2% 13.5% FY15 FY16 FY17 H1 FY17 H2 FY17 SLIDE 70

73 OUR FRAMEWORK IN ACTION Maintain safe and reliable operations and a strong balance sheet Disciplined planning process Establishes sustaining capital requirements Optimises capital efficiency of our portfolio Probabilistic scenario analysis Establishes optimal net debt and excess capital position Informs valuation analysis and capital management approach Dividend policy reflects the cyclicality of our business Protects balance sheet and rewards shareholders as margins expand Can be supplemented by additional returns Dividends franked to maximum extent practicable US$184M franking balance as at 30 June (prior to payment of FY17 final dividend) Dependant on geographic distribution of profits H2 FY17 shareholder returns (US$M) Committed returns Share buy-back ~US$500M per annum of sustaining capital expenditure on average to FY20 Optimal net debt of US$500M and retention of a US$1B buffer to provide flexibility Net cash in excess of US$500M to be invested in high return options or returned efficiently Shareholder returns for H2 FY17 of US$544M (82% of Underlying earnings) 2 1. Franking balance as at 30 June 2017 which assumed ~US$111M of tax payment in December 2017 and US$73M franking credits distributed from GEMCO. 2. Based on H2 FY17 Underlying earnings of US$667M, with H2 FY17 shareholder returns including the final dividend relating to H2 FY17 (US$333M), paid in October 2017 and share buy-back completed in H2 FY17 (US$211M). H2 FY17 Underlying earnings 333 H2 FY17 shareholder returns Final dividend SLIDE 71

74 CAPITAL MANAGEMENT UPDATE Intention to complete US$750M capital management program by 10 October 2018 Flexible program designed to return capital efficiently - On-market share buy-back - Special dividends (franked or un-franked) 38% (or US$282M) of program completed to end October Average buy-back price of A$2.77 per share - 8.3% of average daily volume South32 capital management program (US$M) 100 Run-rate of ~US$240M currently implied per six month period 50 Program run-rate lagging plan in H1 FY18 H2 FY18 capital management options include: Results blackout Flexibility to top-up the on-market buy-back with special dividends Results blackout On-market buy-back Special dividends Results blackout Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Implied run rate of US$240M per six month period Shares purchased per month Results blackout SLIDE 72

75 SUMMARY Graham Kerr (Chief Executive Officer)

76 SUMMARY Consistent application of our strategy Sustainably improving performance Working opportunities across our portfolio to unlock value Further simplifying our structure Embedding high quality options with a bias to base metals Substantially increasing returns to shareholders SLIDE 74

77 APPENDIX

78 NON-OPERATED - BRAZIL ALUMINA Complete de-bottlenecking phase one project and commence phase two Agree bauxite life extension project Steep increase in price over the December 2017 quarter expected to be realised on an M-1 basis Ownership Bauxite Mine: 14.8%; Alumina Refinery: 36%; Aluminium Smelter: 40% Product Alumina Workforce FY17 average 1,245 FTE employees and contractors 5 Logistics Bauxite transported 28km by rail to Porto Trombetas Realised pricing Platts Alumina Index Key contracts Mineração Rio do Norte (MRN) Mine has long-term contracts selling bauxite to shareholders Alumar Refinery has six long-term bauxite offtake agreements with MRN Brazil Alumina has two electricity supply contracts with Eletronorte: Refinery contract (expiration date 2024); and Smelter contract (expiration date end of CY17), termination notice was served in CY15 and the power forward sold until expiry. FY17 Brazil Alumina sales Sales volumes by end market Sales volumes by contracting approach¹ Sales volumes by pricing approach¹ Average realised alumina sales price and weighted average index price (US$/t) 444 Spot price Internal External External Term M Spot Negotiated H2 FY16 H1 FY17 H2 FY17 FY18 YTD³ 1. Reflects percentage allocation of internal and external sales. Average realised sales price Weighted average index price⁴ 2. Spot price as at 30 November Source Platts Alumina Index (PAX) Free of Board (FOB) Australia. 3. FY18 YTD average realised sales price reflects YTD October 2017 (1 July to 31 October 2017). 4. Weighted average index price reflects South32 quarterly sales volume weighted average of the Platts Alumina Index (PAX) FOB Australia on the basis of a one month lag (month minus one or M-1 ) for each six month period. 5. Reflects refinery on a 100% basis. SLIDE 76

79 ALUMINIUM COST BASE FY17 South Africa Aluminium cost breakdown 10% 24% 14% 52% 25% 75% 29% 56% 15% Fixed Variable ZAR denominated USD denominated Royalties and aluminium price linked contracts Raw materials/consumables Energy (including fuel) Labour and contractor related costs Other FY17 Mozal Aluminium cost breakdown 14% 8% 32% 46% 23% 77% Fixed Variable 41% 36% 23% ZAR/MZN denominated USD denominated Royalties and aluminium price linked contracts Raw materials/consumables Energy (including fuel) Labour and contractor related costs Other SLIDE 77

80 ALUMINA COST BASE FY17 Worsley Alumina cost breakdown 19% 12% 2% 20% 56% 44% 75% 23% 22% Fixed Variable AUD denominated USD denominated 5% 22% Royalties and alumina price linked contracts Raw materials/consumables Labour and contractor related costs Energy (including fuel) Other Caustic soda Mining costs FY17 Brazil Alumina cost breakdown 13% 13% 20% 80% 43% 21% 36% 19% 55% Fixed Variable BRL denominated USD denominated Royalties and alumina price linked contracts Raw materials/consumables Energy (including fuel) Labour and contractor related costs Other SLIDE 78

81 MANGANESE ORE COST BASE FY17 Australia Manganese ore cost breakdown 22% 20% 8% 8% 60% 40% 83% 9% 50% Fixed Variable AUD denominated USD denominated Royalties and manganese price linked costs Raw materials/consumables Labour and contractor related costs Energy (including fuel) Other FY17 South Africa Manganese ore cost breakdown 3% 4% 9% 42% 80% 20% 87% 4% 9% 42% Fixed Variable ZAR denominated USD denominated Royalties and manganese price linked costs Raw materials/consumables Labour and contractor related costs Energy (including fuel) Logistics Other SLIDE 79

82 BASE METALS COST BASE FY17 Cerro Matoso cost breakdown 18% 17% 9% 49% 51% 75% 16% 24% 41% Fixed Variable COP denominated USD denominated Royalties and nickel price linked contracts Raw materials/consumables Energy (including fuel) Labour and contractor related costs Other FY17 Cannington cost breakdown 20% 14% 9% 82% 18% 70% 1% 29% 26% 31% Fixed Variable AUD denominated USD denominated Royalties, treatment and refining charges and base metal price linked contracts Raw materials/consumables Energy (including fuel) Treatment and refining charges Labour and contractor related costs Other SLIDE 80

83 METALLURGICAL AND THERMAL COAL COST BASE FY17 Illawarra Metallurgical Coal cost breakdown 13% 5% 39% 65% 35% 88% 12% Fixed Variable AUD denominated USD denominated 43% Royalties and metallurgical coal price linked costs Raw Materials/consumables Labour and contractor related costs Energy (including fuel) Other FY17 South Africa Energy Coal cost breakdown 20% 21% 3% 25% 75% 91% 9% Fixed Variable ZAR denominated 6% USD denominated 50% Royalties and thermal coal price linked costs Raw Materials/consumables Energy (including fuel) Labour and contractor related costs Other SLIDE 81

84 RESERVE AND RESOURCE STATEMENT (1) Mineral Resources information is inclusive of Mineral Resource that have been modified to produce Ore Reserves reported on 100% basis. (2) All tonnage is reported on dry metric tonne basis. (3) Commodity price and exchange rates used to estimate economic viability of Ore Reserves are based on long range forecasts. (4) Cut-off grade: Mineral Resource: Variable ranging from 20-25% A.Al 2 O 3, 3.5% R.SiO 2 and 1m thickness. Ore Reserve: Variable ranging from % A.Al 2 O 3, 3.5% R.SiO 2 and 1m thickness. (5) Increase in Mineral Resources is due to additional drilling and updated West Marradong area resource model. (6) Decrease in Ore Reserves is due to depletion. (7) Ore delivered to process plant. (8) Metallurgical recovery at Worsley refinery 94.1%. SLIDE 82

85