11 Material Issues and our Vision | Sustainability | Sumitomo Metal Mining Co., Ltd.

1.Effective Use of Non-Ferrous Metal Resources

The SMM Group is engaged in the mining of natural resources, the production of highly advanced materials, and everything in between. We handle a wide range of non-ferrous metal materials in the process. We believe that it is the SMM Group’s responsibility to take on the challenge of making more effective use of limited non-ferrous metal resources without waste through the utilization of resources that could hitherto not be used due to technical obstacles and through the development of recycling technologies.

Vision, KPIs and goals

A company that generates resources through high technological capabilities

A company that stably provides non-ferrous metals to society
A company that contributes to society by effectively using impurities through collaborative, open technological development among industry, academia, and government
A company that contributes to the construction and maintenance of recycling systems for non-ferrous metals
A company that develops and supplies highly advanced materials that contribute to the resolution of social issues

KPI Indicators	Goals
Advance copper mine projects	Strengthen production structure at JV mines to achieve and maintain copper production levels of 300 kt/year from interests Achieve steady copper production level by reinforcing exploration of surrounding and deep areas in JV mines, expanding mineral processing technology, and improving operations leveraging IoT and AI Advance Phase 2 and later projects at the Quebrada Blanca Copper Mine
Acquire new superior copper and gold resources	Develop new mines for which we have operatorship
Improve productivity by introducing new technology	Promote remote operation and unmanned operation of heavy machinery and information infrastructure equipment inside and outside of the Hishikari Mine
Advance nickel ore projects and improve productivity	Nickel production: 150 kt/year Recovery rate compared to FY2018: +2% Recovery of scandium by-product Recovery of chromite by-product
Develop technology to separate, stabilize and bleed off impurities, and create value from impurities generated by smelting processes and mines	Develop technology to stabilize and bleed off impurities: Develop and demonstrate the process
Develop technology to create value from unused non-ferrous metal resources	Contribute to existing (e.g. marine resource development) and new development projects
Recover non-ferrous metals from hard-to-process resources	Participate in business and technology for recovery of lithium from salt-lake water in the presence of high levels of impurities
Demonstrate and commercialize automobile secondary battery recycling technology	Demonstrate, commercialize, and expand scale of recycling technology that recovers cobalt from automotive lithium-ion batteries Commence commissioning and commercial operation of pre-commercial plant: FY2026*
Leverage our strengths to create new products and new businesses that contribute to society	Research, develop, and commercialize new advanced materials in the fields of energy, automobiles, and information communications
Hold raw materials in-house for favorable and stable procurement	Commercialize NiO for fuel cells following demonstration project
Expand sales of low-cost battery cathode materials through favorable, stable procurement of our own nickel raw materials	Maintain top class global share in the expanding cathode materials market

2.Climate Change

Society’s demand for companies to reduce greenhouse gas (GHG) emissions has increased dramatically, and the business risks associated with climate change are also increasing. On the other hand, a stable supply of products contributing to a low-carbon society, such as the secondary battery materials for electric vehicles and the near-infrared absorbing materials CWO®, both produced by our Group, are expected to contribute to the reduction of GHG emissions.

Vision, KPIs and goals

A company that actively undertakes climate change countermeasures, by reducing emissions and stably supplying products contributing to a low-carbon society, a future with zero greenhouse gases (GHGs)

KPI Indicators	Goals
Reduce GHG emissions	Continuing to grow our business while maintaining GHG emissions reducing 38% or more compared to FY2015 (50% or more in Japan, 24% or more overseas) Cut GHG emissions intensity by at least 26% compared to FY2013^* Expand contribution of GHG reduction by products contributing to a low-carbon society: 600 kt-CO₂ or more^*

under review

3.Significant Environmental Accidents / 4.Biodiversity

The SMM Group recognizes that there are risks of adverse impacts on the natural environment when developing natural resources and using chemical substances. In addition to preventing significant environmental accidents, we recognize that minimizing our negative environmental impacts, including rationalization the use of water, and preserving biodiversity in our day-to-day management of operations are prerequisites for business continuity.

Vision, KPIs and goals

A company that values water resources and biodiversity, and protects the richness of the sea and land

KPI Indicators	Goals
Zero significant environmental accidents	Promote improvements through the use of risk management and environmental management systems Reinforce and improve equipment and infrastructure to address increases in sources of natural hazard
Reduce emissions of hazardous substances (year-on-year)	Optimize water use; reduce emissions of hazardous substances to the atmosphere and water Promote various environmental preservation and biodiversity preservation activities, such as regular reforestation

5.Employees’ Occupational Health and Safety

It is the responsibility of management to prevent work-related accidents and illnesses, provide a safe, healthy and comfortable work environment, and strive to improve employee comfort. All of these also lead to greater motivation and productivity among employees. The SMM Group bases management on job classification, striving to ensure the safety and health of our employees through intrinsic equipment safety improvements and safety education, etc.

Vision, KPIs and goals

A company where all employees work together with safety first the priority in a comfortable working environment as well as safe facilities and operations

KPI Indicators	Goals
Prevent occupational accidents	Serious accidents: zero (in Japan and overseas, including contractors) All accidents: reduce year-on-year, with aim of eventually zero
Prevent occurrence of occupational diseases	Number of workplaces that present higher health risks: reduce year-on-year Occurrence of occupational diseases: zero

6.Diverse Human Resources / 7.Development and Participation of Human Resources

The source of the SMM Group’s growth is its employees. We respect individuality and diversity, and aim to create an open and vibrant organizational climate in which everyone can demonstrate their strengths and thrive. With the globalization of business and the rapid development of DX, it is a management challenge to develop human resources who can think and act on their own initiative based on their expertise.

Vision, KPIs and goals

A company where all employees can take a vibrant and active part

A company that respects the humanity of each and every employee, and where employees feel pride, motivation, and joy in work
A company that provides each and every employee with opportunities to improve his/her capabilities, and grows together with employees

KPI Indicators	Goals
Promote working style reform and create workplaces that make use of digital technology, enabling diverse human resources to play vibrant and active roles	Improve scores for “Management by managers and superiors,” “Appeal of job,” and “Work environment” in employee awareness survey (1) Number of female managers: 50 (SMM) (2) Ratio of female employees: 20% or higher (SMM) Expand number of managerial track employees of foreign nationality Percentage of employees with disabilities: 3% or higher (SMM) Assign jobs and provide support matched to employees’ life stages
Support employees’ mental and physical health	Reduce the number of employees taking long-term leave Percentage of employees with abnormal findings indicated in health checkups: 50% or lower
Diversify opportunities to enhance the abilities of employees according to employee needs and work needs	Utilize one-on-one meetings that bring out the motivation and potential of every employee and boost the growth of subordinates through regular dialogues between superiors and subordinates Reconstruct the human resources development program (in-house education, external education, etc.) to provide opportunities to employees to enhance their abilities in line with their roles Provide opportunities for self-development matched to each employee’s life plans and needs (correspondence courses, online training, etc.)

8.Engagement with Stakeholders

The SMM Group’s main premise for business continuity is to earn a social license to operate. To this end, we recognize the importance of promoting information disclosure and transparency to the greatest extent possible, as well as deepening mutual understanding and building relationships of trust through ongoing dialogue with local communities and other stakeholders. In particular, when there is a risk that development may affect the livelihood of indigenous peoples, we gain a thorough understanding of their culture, traditions and history and engage in a continuing dialogue prior to development. It is then necessary to proceed carefully to prevent such impacts of development.

Vision, KPIs and goals

A company that is appreciated and understood to be the world leader in non-ferrous metals

KPI Indicators	Goals
Further penetrate our Group brand among employees	Improve results of employee awareness survey (increase ratio of employees who feel pride in working at the Company)
Ensure quality and quantity in communication of information and dialogue at the level of “world leader in the non-ferrous metals industry”	Expand opportunities for dialogues with media and investors Achieve positive evaluations of our Integrated Report from outside the Company
Increase in recognition and understanding of our goal of “world leader in the non-ferrous metals industry”	Improvement in findings of surveys by external bodies (degree of recognition and understanding, etc.)

9.Co-Existence and Mutual Prosperity with Local Communities

The SMM Group’s main premise for business continuity is to earn a social license to operate. To this end, we recognize the importance of promoting information disclosure and transparency to the greatest extent possible, as well as deepening mutual understanding and building relationships of trust through ongoing dialogue with local communities and other stakeholders. In particular, when there is a risk that development may affect the livelihood of indigenous peoples, we gain a thorough understanding of their culture, traditions and history and engage in a continuing dialogue prior to development. It is then necessary to proceed carefully to prevent such impacts of development.

Vision, KPIs and goals

A company that contributes to regional development and earns trust as a member of the local community

KPI Indicators: Participate in local communities through dialogue and collaboration	Goals: Accurately identify local issues through dialogues with local communities, and execute measures 1. to 5. as follows
Support the local community via employee participation	Implement employee participation programs (from 2023)
Hire and procure locally	Continually implement and assess of performance
Support for nurturing of the next generation	Implement programs to nurture the next generation in collaboration with government, local bodies, NPOs, etc. (one or more times/year) Establish and award scholarships in Japan and maintain existing overseas scholarships (from 2023)
Support for people with disabilities and the elderly	Implement programs to support people with disabilities and the elderly in collaboration with government, local bodies, NPOs, etc. (one or more times/year)
Support during and after disasters	Support regions affected by large-scale disasters

10.Rights of Indigenous Peoples

The SMM Group’s main premise for business continuity is to earn a social license to operate. To this end, we recognize the importance of promoting information disclosure and transparency to the greatest extent possible, as well as deepening mutual understanding and building relationships of trust through ongoing dialogue with local communities and other stakeholders. In particular, when there is a risk that development may affect the livelihood of indigenous peoples, we gain a thorough understanding of their culture, traditions and history and engage in a continuing dialogue prior to development. It is then necessary to proceed carefully to prevent such impacts of development.

Vision, KPIs and goals

A company that understands and respects the traditions and culture of indigenous peoples

KPI Indicators	Goals
Understand indigenous peoples and their traditions and culture	Percentage of SMM Group sites implementing in-house education: 100% by the end of FY2023
Support initiatives that lead to respect for the traditions and cultures of indigenous peoples	Provide scholarships for indigenous peoples (continue existing initiatives) Support indigenous people-related initiatives by NGOs, academic societies, etc.: one initiative or more each year

11.Human Rights in the Supply Chain

As for Business and Human Rights, the calls for companies to take strong measures to prevent human rights violations throughout their supply chains are increasing. It is necessary for the SMM Group to construct sustainable supply chains in collaboration with business partners to prevent our business activities from having negative impacts on human rights along our diverse supply chains.

Vision, KPIs and goals

A company that undertakes sustainable procurement across the supply chain

KPI Indicators	Goals
Promote sustainable procurement, particularly responsible mineral sourcing	Responsible mineral sourcing 1) Establish a responsible mineral sourcing management system in line with international standards by the end of FY2021 2) Maintain a record of zero mines, smelters, and refineries complicit in child labor or other infringements of human rights in the supply chain Sustainable procurement Business partners that have received and agreed with the Sumitomo Metal Mining Group Sustainable Procurement Policy: 100% by the end of FY2030 2) Establish a sustainable procurement management system in line with international standards by the end of FY2024 3) Continue implementing due diligence (DD)

KPI Indicators

Goals

Promote sustainable procurement, particularly responsible mineral sourcing

Responsible mineral sourcing
1) Establish a responsible mineral sourcing management system in line with international standards by the end of FY2021
2) Maintain a record of zero mines, smelters, and refineries complicit in child labor or other infringements of human rights in the supply chain
Sustainable procurement
Business partners that have received and agreed with the Sumitomo Metal Mining Group Sustainable Procurement Policy: 100% by the end of FY2030
2) Establish a sustainable procurement management system in line with international standards by the end of FY2024
3) Continue implementing due diligence (DD)