Independence Group Sustainability Report 2019

Liability Liability risks stemming from parties who suffer loss from the effects of climate change and who seek compensation from those they hold responsible. Unpredictable increases in operational costs associated with compensation payouts and defence. Active Mitigation. In the short term, IGO’s mitigation measure of choice is the maintenance of fit-for-purpose insurance. We will continue to work with insurers to ensure the alignment on risk understanding and the adequacy of our controls. Liability risks associated with increased pressure on shared resources attributable to climate change. Liability risks associated with impacts on resources used by third parties or natural systems, such as land clearing, groundwater, and the impacts on the grazing potential of pastoral properties. Active Mitigation. As per IGO Group Environment Standard 2 - Social and Environmental Impact Assessment, we maintain an ongoing program of work to monitor our impacts on both the environment in which we operate and our host communities. Transition Loss of fuel tax credits and or increases in fuel prices. The Australian Government imposes an excise tax on fuel for the purpose of, among other things, the maintenance of public roads. This tax cost is built into the price paid by all users. Where fuel is used for purposes other than the powering of vehicles on public roads, businesses such as mining companies can claim fuel tax credits. Political debate on the merits or otherwise of the fuel tax credit arrangement will likely be heightened given the demand for taxing negative externalities, such as taxes that discourage consumption of things that have negative impacts on the environment, for example CO 2 emissions. Active Mitigation. IGO continues to seek ways to reduce our reliance on diesel. A 5.7MW photovoltaic solar power generation system is currently being constructed at IGO’s Nova Operation. The use of renewables and associated battery technology will become standard practice at new IGO-managed mines in the future. We are taking steps to identify and assess options to decarbonise our business, including the opportunity to transition to electrified mining at IGO-managed new and long-life mines as the technology becomes available and cost effective. In the interim, the fuel tax credit remains an important financial consideration for IGO, and any move by the government to reduce or phase out such credits will require consultation with the industry. IGO will continue to engage with the government directly and through industry associations. Increased costs associated with meeting emission reduction targets associated with regulatory changes within Australia. This includes any capital works, or new operating costs required to reduce emissions or purchase offset credits in response to the introduction of carbon reduction measures, such as the Australian Government’s Safeguard Mechanism established to cap industrial pollution. Beyond the Safeguard Mechanism, there is ongoing uncertainty regarding the Australian Government’s policy to give effect to its stated Paris Agreement commitments on GHG reduction targets. Active Mitigation. IGO will continue to implement our business-as-usual cost control processes and continue to model the financial impacts of potential and or proposed abatement strategies. We will continue to maintain surveillance of the external environment, through participation in industry associations and business-as-usual stakeholder engagement. Sudden or rapid change in community sentiment. A sudden change in the community’s sentiment towards the management of Australia’s response to climate change could both: • drive a consequential sudden change in laws and hence operating costs, such as the sudden introduction of a carbon tax or prohibitions on land clearing; and • impact on IGO’s and or the broader mining industry’s social licence to operate. Active Mitigation. IGO will maintain surveillance of the external environment through business-as- usual community and stakeholder engagement, and participation in industry associations. IGO will conduct regular social impact assessments and community sentiment surveys, as per the IGO Group Environmental Standard 2 – Social and Environmental Impact Assessment. We will continue to engage regularly, openly and honestly with our host communities and take their views and concerns into account in our decision making, in line with the IGO Community Policy. IGO will continue to publicly disclose information about our activities and performance. IGO SUSTAINABILITY REPORT 2019 — 51