Governance

Introduction

Syrah Resources Ltd (Syrah) is committed to the implementation of the Global Industry Standard on Tailings Management (GISTM) at the Balama Graphite Operation (BGO), where currently the company’s only Tailings Storage Facility (TSF) is located. The GISTM was established as an international standard for safer tailings management through a process co-convened with the International Council on Mining and Metals (ICMM), United Nations Environmental Programme (UNEP), and the Principles of Responsible Investing (PRI).

In addition to the GISTM, our approach is consistent with the ICMM Tailings Governance Framework, Position Statement on Preventing Catastrophic failures of TSFs, the Australian National Committee on Large Dams (ANCOLD) guidelines and the Mozambican Tailings Dam Safety Regulations (Mozambican Decree # 50).

To support public accountability and improve the transparency of information about tailings’ storage facilities, in conformance with Principle 15 of the GISTM, this disclosure document has been developed regarding the adherence to safe tailings facility management and it has been reviewed by the Syrah Accountable Executive.

Overview

The BGO TSF is in a remote location approximately 260 km inland from the coastal provincial capital of Pemba in the southern Cabo Delgado Province. BGO is an integrated open cut mine and processing facility for graphitic ore producing a graphite concentrate which is then transported to the Ports of Nacala and Pemba to be shipped to customers globally. The TSF has been in operation since November 2017.

The ultimate TSF landform is to comprise a series of five (5) geosynthetic lined cells to protect the groundwater from potential contamination. To increase the storage capacity, the perimeter embankments of the cells are to be progressively raised upstream using compacted tailings as embankment fill. The starter embankment of Cell 1 has a design storage capacity of 3.3Mm3 of tailings. Cell 1 was constructed concurrently with the other mining and processing Infrastructure between August 2016 and May 2018. At the end of July 2024 Cell 1 was estimated to be 95% full.

The Cell 2 starter embankment has a design storage capacity of 5.3Mm3 . The design for Cell 2 has been structured such that the construction is in two phases to allow for spreading of the construction costs and adapt the construction schedule within the restraints posed by the wet seasons. Cell 2A which has a capacity of 1.4Mm3 is complete and deposition is forecasted to start in Q4 2024. Cell 2B construction remains ongoing and is expected to be completed by 2026.

Assurance and Independent Review

Syrah’s TSF Framework requires independent technical review of the design, construction, operation, closure, post closure and management of TSFs. The independent reviewers are required to be third parties who are not, and have not been, directly involved with the design or operation of the TSF.

Since operational start up, Syrah has been commissioning independent dam safety audits in alignment with the Syrah Tailings Management Framework. The results of these dam safety audits are reported to Syrah’s senior management, including the Accountable Executive and our Board Sustainability Committee, and findings are followed up at the Monthly Governance team meetings, which include review of progress on actions to close out findings.

A Dam Safety Review (DSR) of the BGO TSF was last conducted in February 2024 by TEC3, an independent engineering, geotechnics and water resources consulting firm from Brazil.

The Engineer of Record (EOR) conducts annual tailings facility performance reviews, with the most recent performance review occurring in 2024.

Material findings from annual performance reviews and DSRs are those that have, a high probability of being a significant dam safety concern where the integrity of the facility is compromised, within 12 months of the findings. Material findings from social and environmental monitoring programs are those that have a significant impact on the community and stakeholders near the facility.

There have been no material findings from the annual performance reviews, the DSR, or the social or environmental monitoring programs related to the BGO TSF.

The next Dam Safety Review (DSR) by an independent qualified engineering firm is scheduled to commence in 2029. As per the Syrah TSF Framework the same auditor cannot conduct consecutive DSRs so a different engineering firm will be selected.

The next annual performance review by the EOR is scheduled for Q1 2025.

Environmental and Social Monitoring

Aligned with the GISTM and to support safe tailings management, Syrah has developed and documented knowledge about the local social, environmental, and economic context in the form of a Social and Environmental Impact Assessment for Balama inclusive of human rights considerations which is updated every 5 years.

Syrah is a strong advocate of human rights and is committed to ensuring that the right Company policies, processes, procedures, and systems are in place to do everything reasonably possible to identify, mitigate and prevent potential adverse human rights impacts on its people and communities. We understand our role in respecting and promoting human rights and will, at a minimum, act in accordance with internationally recognised human rights standards, including the International Bill of Rights, the International Labour Organization’s Declaration on the Fundamental Principles and Rights at Work and the United Nations Guiding Principles on Business and Human Rights.

A Socio-Economic Impact Study for Balama is also in place and updated every 5 years inclusive of human rights considerations.

Dam Break Studies

Dam Break Studies (DBS), inclusive of Impact Studies, are made with consideration of the Credible Failure Modes for the facility and the environmental, social, and economic Knowledge Base.

The consideration of Credible Failure Modes, and the design measures/operational controls that should be in place in response, are key elements of TSF design. Credible Failure Modes can and do typically vary during the lifecycle of a TSF as the conditions change.

A "credible failure mode" refers to a potential way in which a system, component, or process could fail, based on realistic conditions or circumstances. It focuses on failure scenarios that are plausible given the design, environment, usage, and operational factors, without considering probabilities or likelihood. These failure modes are generally those that can be reasonably anticipated or expected based on engineering principles, known failure mechanisms, or historical data.A facility that is appropriately designed and operated considers all Credible Failure Modes and includes sufficient resilience against each. Different Credible Failure Modes will result in different failure scenarios. The term “Credible Failure Mode” is not associated with a probability of this event occurring and having Credible Failure Modes is not a reflection of poor facility safety.

Syrah have developed a Knowledge Base which captures environmental, social, and local economic baseline data within the BGO TSF’s area of influence. In assessing potential downstream impacts, Syrah has considered the Credible Failure Modes of the BGO TSF and the potential inundation area from a credible flow failure.

Four (4) mechanisms that may lead to failure were assessed as Credible Failure Modes (CFM) for the current stage of the Balama TSF:

• FM1 – Overtopping

• FM2 – Piping

• FM3 – Instability due elevated phreatic level

• FM4 – Instability due to liquefaction

The consequence classification is based on the credible flow failures and the information captured in the Knowledge Base. We have assessed the potential effects of a Syrah BGO TSF failure as an “Extreme” consequence for Design with the current classification as High against the GISTM and High B against the ANCOLD guideline. The consequence classification is reviewed on an annual basis or when a material change occurs.

Multidisciplinary Risk Assessment

The assessment and management of risk is essential to the effective management of TSFs across their entire lifecycle. The multidisciplinary risk assessment considers the Credible Failure Modes at the BGO TSF that could lead to the loss of containment, and the potential downstream impacts. Impacts to Community and human rights were also considered.

For each Credible Failure Mode, the adequacy of the preventative controls was assessed, along with the mitigating controls to reduce any potential consequences.

The last multidisciplinary risk assessment update conducted for BGO TSF was in April 2023 by subject matter experts with expertise in the areas of risk, social performance, and environment, as well as tailings and process engineers. The Risk Assessment is reviewed and updated each year, and the next review will be completed during Q4 2024.The credible failure modes are presented in the table below.

The following controls have been designed as critical controls under the Syrah TSF Framework;

- Dam design and construction (preventative)

- TSF operation, maintenance and surveillance (preventative)

- TSF Emergency Response (mitigative)

Impact Assessment

The most recent failure impact assessment for the BGO TSF indicated that a failure of the northern wall of Cell 1 could result in human exposure as well as potential economic and environmental impacts. The estimated population at risk (PAR) is in the high classification range of 10-100 people, comprising individuals in the nearby local Village of Maputo. A catastrophic tailings release could result in the following impacts;

- Extent of tailings flow

o Release outside of the Mine boundary between 5km2 to 20km2

- Environmental impact

o The consequence classification for an Environmental Spill was determined to be Significant. This classification was given considering a major spill (i.e. spillway activation) may contaminate water supplies used by stock and fauna, and potentially could impact human health by contamination of drinking water.

- Infrastructure impact

o Sunny Day Scenario flood there is no impact on Infrastructure

o Rainy Day Scenario flood potential impact up to 14 houses but no shared infrastructure impacted

Emergency Preparedness and Response Plan Summary

Significant events concerning the safety of the BGO TSF are managed by the Emergency Action Plan. The plan outlines the facility-specific trigger action response plans and procedures to be followed in the event of an emergency or an incident and was developed in consultation with relevant external emergency service providers and reviewed by the RTFE and EOR. It includes responses proportional to the risk that credible failure scenarios pose. At a site level, this is integrated into the Site Emergency Response Plan, ensuring consistency with the broader safety management plan. Key features of the plan include (but are not limited to):

- roles and responsibilities

- credible flow failure scenarios

- details on internal and external stakeholders, and where to find contact information

- applicable Trigger Action Response Plans

- muster points and evacuation routes

A tactical response plan developed for the BGO TSF provides operational level detail for the first responders to an incident, (Emergency Response Team), with a focus on the people, equipment and response required during an emergency. The guideline primarily involves Syrah resources due to proximity and site familiarity. Where applicable, the plan has been shared with the regulator and external emergency service providers to improve effective disaster management.

Financial Capacity

Regarding the provision of funds to support mine closure and rehabilitation of the TSF an independent Mine Closure Study is in place, which is updated every two years. Included in the Closure Study are estimates for the cost of closure both at the end of operations as well as for an unplanned closure. As per the Mozambican legal requirements the unplanned closure costs are provided by Syrah and held in a Government Bank account to cover this eventuality.