Identification and Management of Nature-Related Risks and Opportunities

We formulated the Sumitomo Metal Mining Group’s Nature Policy on April 1, 2025. The policy outlines governance and promotional framework, principles, and review and reporting. The policy sets out nature policy principles covering several key areas. These include assessing and identifying nature-related dependencies, impacts, risks, and opportunities; pursuing net-zero nature loss in priority locations; and collaborating with stakeholders across value chains and the associated regional ecosystems (landscapes). We also pledge to contribute to the sustainable development of society by avoiding and minimizing the negative impact of our Group’s business activities on nature and by undertaking restoration and conservation efforts.
Furthermore, under our Vision for 2030, we aspire to be “a company that contributes to a nature-positive future.” At the end of FY2026, we plan to disclose the identification of nature-related risks and opportunities in the Group’s priority locations, along with our response measures.
On January 17, 2024, the International Council on Mining and Metals (ICMM) released its Nature Position Statement. As part of its commitments as an ICMM member company, SMM will assess nature-related dependencies, impact, risks, and opportunities for operations in priority locations by the end of FY2026. Also, by FY2030, we will identify the most material value chain categories and issues and develop performance targets and objectives for material aspects.
In FY2023, we continued our ongoing revegetation and biodiversity-conservation efforts at our business sites, and we established a working group under the Environmental Preservation Subcommittee (now the Nature Conservation and Restoration Subcommittee) to examine our response to nature-related initiatives and related information disclosure.
In FY2024, we conducted analyses of our Group’s overall dependencies and impacts on nature using ENCORE, the Integrated Biodiversity Assessment Tool (IBAT), Global Forest Watch (GFW), and WRI Aqueduct-Water Risk Atlas— tools recommended by the Taskforce on Nature-related Financial Disclosures (TNFD).

Responses to Risks (Reducing the Environmental Impact of Constructing New Plants)

When constructing the Coral Bay Nickel Corporation (CBNC) and Taganito HPAL (THPAL) refineries in the Philippines, we sought adequate dialogue with the Philippine government, local authorities and local citizens right from the planning stage and made efforts to construct plants that would have a minimal impact on the environment. For example, the pier used to deliver sulfuric acid and methanol to the plant was made to circle around the coral reef, and wastewater outlets were also positioned to ensure the reef’s protection.
Both companies have established an Environmental Management Office (EMO) as a department responsible for environmental management activities.
Environmental surveys are conducted by the EMO, and regular sampling of water quality, air, and flora and fauna is carried out by a team consisting of the Department of Environment and Natural Resources, local authorities, and NGOs. The EMO is a department within companies or business establishments that is specialized in environmental management activities.
Its main roles are to monitor and assess the environmental impacts of business operations, and to plan, implement, and manage measures for environmental conservation and legal compliance. With this sort of environmental monitoring, we check that the construction and operation of plants do not have serious impacts on the ecosystem, while keeping environmental impacts from wastewater and other factors to a minimum.
Through our efforts in this area, CBNC and THPAL have been awarded the Philippines DENREMB’s Presidential Mineral Industry Environmental Award (PMIEA) 10 times and three times, respectively, between 2014 and 2024.

For the construction of the new Niihama CAM Plant, which began commercial production of battery materials (cathode materials) for automotive lithium-ion batteries in January 2025, we held repeated consultations and collaborated with Ehime Prefecture and Niihama City to ensure legal compliance and adopted construction methods to reduce environmental impact. Specifically, since the new Niihama CAM Plant is located on a coastal landfill area with abundant groundwater, the casing method was adopted for pile driving and excavation to reduce the impact on groundwater contamination. In addition, all construction wastewater and surplus soil were checked and disposed of appropriately.
As a concept for the plant itself, we prioritized low energy consumption and GHG reduction. More than 10,000 m² (1,000 kW) of solar panels were installed on the three main buildings, and LNG gas, which has relatively low CO₂ emissions, is used as an energy source. Furthermore, to reduce the energy used for transportation by forklifts and trucks within the plant, the layout was designed to minimize transportation distances, and all inter-plant transportation is carried out by pneumatic conveying.

Water Use Management (Risk Management)

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Water is a shared resource of local regions and is closely connected to the lives of local residents and communities, as well as to the surrounding ecosystem. In addition to identifying water risks using WWF Water Risk Filter and then reducing those risks, our Group gives consideration to local communities and the environment in areas where we use water and is working with a sense of responsibility to make good use of the limited water resources.
Coral Bay Nickel Corporation (CBNC) in Palawan Island, the Philippines, makes effective use of water resources because the area is prone to water shortages during the dry season. For example, they treat supernatant water that accumulates in tailings facilities at recycling facilities and then reuse the water in their smelting and refining processes. The Company also supplies this water as industrial water to lime slurry producers, who are suppliers for The Company. Furthermore, CBNC provides, maintains, and manages water supply equipment and delivers drinking water using tanker trucks as necessary as part of its water-related contributions to local communities. In addition, a team that consists of members from the Environmental Management Office (EMO), the department that conducts environmental management activities for the Company, local governments, NGOs, and other entities, strives to reduce the environmental effects of discharge by conducting regular water quality tests to determine if plant operation is having a major impact on water in the surrounding area.
The SMM Group also completes an annual CDP water security questionnaire regarding its water management. In FY2023, we established the Sumitomo Metal Mining Group Water Policy, announced it internally and externally, and informed employees about the policy.