Boliden : Annual and Sustainability Report 2023

Annual and Sustainability Report 2023

Metals made in Europe

Contents
Introduction
President's statement	. 2
Boliden and beyond	4
A sustainable investment	6
Targets and outcomes	. 8
Business model	10
Income model	12
Environmental, Social and Governance overview. . . .	14
Strategic focus	16

On the cover: Olle and Emelie are two of the hundreds of contractors contributing to the successful delivery of Boliden's investment projects. In an interview on page 29, Emelie shares her thoughts on being a consultant at Boliden.

Operations

Our metal production	. 18
Mines and smelters with high productivity	. 20
Business area highlights	. . 23
Green Transition Metals	24
Employees	. 26
Climate	. 30
Energy	. 32
Procurement	. 33
Environment	34
Biodiversity	35
Tailings and dam safety management	36
Reclamation	. 37
Responsible business	. 38
Indigenous peoples	. 40	Pick of the year
Financial development	42
Mineral Resources and Mineral Reserves	. 48	− We invested a record SEK 15.5 billion, with key
Risk management	. 53
		projects on track including the expansion of our
Market		Odda smelter, reinforcing Aitik's dam structures
	and building the world's first fossil fuel-free mining
Developments on the metal markets	58
operation in the Boliden Area.
Market position	. 62
Competitiveness	. 63
The share	. 64

Corporate governance

Corporate Governance . . . . . . . . . . . . . . . . 66 Internal control . . . . . . . . . . . . . . . . . . . 72 Board of Directors . . . . . . . . . . . . . . . . . . 74 Group management . . . . . . . . . . . . . . . . . 76 Annual General Meeting 2023.. . . . . . . . . . . . 77

Financial reports
Consolidated reports	. 79
Parent company reports	83
Notes	. 84
Proposed allocation of profits	116
Auditor's report	117
Report on sustainable financing	122

Other

EU taxonomy . . . . . . . . . . . . . . . . . . . . 124 Ten-year overviews . . . . . . . . . . . . . . . . . 128 Definitions and terminology . . . . . . . . . . . . . 136 Annual General Meeting 2024 . . . . . . . . . . . . 140 Investor information . . . . . . . . . . . . . . . . 140

Addresses. . . . . . . . . . . . . . . . . . . . .141

About Boliden's Annual and Sustainability Report

The Annual and Sustainability Report describes Boliden's financial performance and sustainability work. The Directors' Report comprises pages 8-11,14-15,18-24,26-27,30-47,53-57, and

66-77. Boliden's Sustainability Report as required by Chapter 6, section 11 of the Swedish Annual Accounts Act, is presented on pages 8-11,14-15, 22, 26-27,30-41,53-57,71-72 and 122-127.

• Our climate targets were validated and approved by the Science Based Targets initiative, confirming that our ambition is aligned with the 1.5°C target of the Paris Agreement. Read more on pages 30-31.
• Low-Carbonand Recycled Lead, as well as Low-

Carbon Sulphuric Acid were added to our Green Transition Metals portfolio. Read more about these and how our Low-Carbon Zinc will end up in car manufacturing on pages 24-25.

• The tank house at Boliden Rönnskär was completely destroyed by fire, overnight transforming the site's business model from selling copper cathodes to copper anodes. Read more about events at our smelters on page 23.
• Due to a combination of a declining zinc price, high energy prices, operational challenges and general cost inflation, the Tara mine was placed under care and maintenance. Read more about events at our mines on page 23.

For generations to come

Boliden contributes to a sustainable future by extracting, producing and recycling metals that are essential for the development of society. By caring for people, the environment and society, and by using our extensive experience, high-level skills and leading technology, we can offer highly competitive metals with low climate impact.

Our expansion project at Odda - which will nearly double its production capacity - proceeded according to plan and reached peak intensity towards the end of the year.

Key figures

78,554

Revenues (SEK m)

-3,354

Free cash flow1) (SEK m)

4.4

Loss Time Injury ­frequency (LTIF)

8,287

Operating profit (SEK m)

15,515

Investments (SEK m)

842

Carbon dioxide emissions2) (Ktonnes)

Our core business: base metals Throughout history, metals have contributed to mankind's progress in matters large and small. Demand for the base metals we produce is expected to be higher than ever as the climate transition progresses. Boliden is ready to provide them in the most sustainable way possible.

COPPER

Thanks to its excellent ability to conduct electricity, more than 60 percent of the copper produced in the world is used to generate or conduct electricity, for example in electric vehicles.

NICKEL

More than two thirds of the world's nickel production is used in making stainless steel. Nickel is also an important component in modern battery technologies.

ZINC

Steel is galvanized with the help of zinc to protect the material, which increases­ resistance to harsh weather conditions. Therefore, zinc is used in for example wind turbines and vehicle chassis.

LEAD

The fully recyclable metal lead has long been essential for storing energy in everything from vehicle ­batteries to the backup batteries used in healthcare.

1. Financial metrics are defined on page 136.
2. Combined CO2e emissions from own operations (Scope 1) and purchased electricity, steam and heat (Scope 2).

Boliden Annual and Sustainability Report 2023

1

Introduction | President's statement

A year defined by macro economic developments

What is your experience of 2023?

"I do not think one should hide the fact that we have experienced a year that has been challenging in several ways. After a strong beginning, the prices of many base metals fell from February onwards, due to economic slowdown in large parts of the world, while Covid-19 recovery in China was weaker than expected. This has affected our revenues for the year, mainly within Business Area Mines. In addition, we faced operational challenges in our own businesses."

Which events are especially important to highlight?

"A very important parameter for heavy industries in general is that the major investments carried out follow the time schedule and budget. For us, 2023 was a year of historically large investments and we have of course dedicated a lot of energy to the investments at Aitik, the Boliden Area and Odda. These three projects are proceeding according to our plans and will be largely completed by 2024-2025. By then, zinc production in Odda - with world leading technology and sustainability performance - will have almost doubled. Aitik's tailings pond will have a reinforced dam structure, enabling future deposition, while production in the Boliden Area will be more climate-friendly. On top of this, it should be highlighted that we during the year inaugurated the new

port infrastructure for Harjavalta, enabling us to handle concentrate input much more efficiently.

Turning to the challenges we have faced, I would like to emphasize the fire at the Rönnskär smelter and the decision to place the operation at our Irish Tara mine under care and maintenance. For both of these very difficult incidents, we have effectively taken action to minimize the consequences and at Rönnskär, we are especially grateful to have avoided physical harm to our co-workers. In both cases, we work on restarting operations, at Rönnskär through a feasibility study for a new tank house and at Tara by identifying conditions for a restart in 2024 with long-term sustainable production."

What is your view on the development of operations during the year?

"Our strategy is to continuously develop productivity, while in parallel identifying investments that strengthen our competitiveness and take us towards our vision of being the most climate-friendly and respected metal provider in the world. At the start of the year, we were able to communicate good exploration results from the Garpenberg mine, which in turn made the foundation for conceptual studies on how to expand production. In Aitik, we have piloted

Mikael Staffas

President and CEO

Born: 1965

Background: President and CEO since 2018. Formerly VP of ­Business Area Mines and CFO Boliden, CFO Södra Skogsägarna, Partner McKinsey & Company.

202 Boliden Annual and Sustainability Report 2023

• We will shape the success of tomorrow and continue our evolution towards a global role model within our industry.

autonomous mine trucks and within Business Area Smelters we have increased our offering of metals with a low-carbon footprint.

Towards the end of the year, our climate targets were validated and approved by the Science Based Targets initiative, making Boliden one of very few companies globally within our sector to be given this recognition. I consider this an important proof of us being at the forefront of developing a long-term responsible mining and metals industry. These are just a few examples of how we continue to develop our competitiveness with the metal markets of tomorrow in mind. By clear delegation of responsibility within the organization, similar work is taking place at all our units and in the same way we are making significant efforts to strengthen our common safety culture. In this area too, the performance has been good, with the lowest Loss Time Injury frequency ever."

What focus areas lie ahead for Boliden?

"Our assessment is that the current content of our metal portfolio is beneficial in the long term. Many of the metals, such as copper and nickel, will be demanded in much larger quantities for the expansion of energy infrastructure and the implementation of fossil fuel-free technologies within

several areas. We will therefore continue to invest in explo- ration, both adjacent to our current mining units and in new geographies. One example of a project in a new geography is Laver, where our ambition is to submit a renewed application for mining concession during autumn 2024. In addition, we will continue to develop operations at our existing sites within both our business areas through projects that can contribute to higher productivity and strengthened com- petitiveness. One should keep in mind that also 2024 is a year of large investments, so naturally we will have a significant focus on, among other things, that the ramping up of production levels at Odda will proceed according to plan.

Boliden turns 100 years in 2024. This will of course be celebrated and serves as a reminder that long-term value is created from actual conditions and that execution of small, continuous improvements often are equally important

as large, one-of-a-kind projects. Last but maybe most important of all, I look forward to, just like this year, together with all my talented and ambitious colleagues, continuing to drive and develop our business and workplaces. It is through our decentralized corporate culture combined with skilled and responsible co-workers that we will shape the success of tomorrow and continue our evolution towards a global role model within our industry."

Boliden Annual and Sustainability Report 2023

3

Introduction | The world at large

Boliden and beyond

Societal development has long relied on metals due to their durability and ability to conduct electricity and heat. As an enabler of the climate transition, demand is increasing and securing future metal supply is becoming a topic of strategic importance for Europe.

Everyday life

Metals and minerals are important for almost every aspect of our daily lives. They play a vital role in everything from agriculture, healthcare, communications, water and energy supply, transport and space technology to the construction of our cities. Without metals, our modern lives would simply not be possible.

Climate transition

Boliden produces many of the metals that are critical for the climate transition. Copper is necessary for generation, transmission and storage of energy, and thus needed for electricity grids and electrical and electronic equipment. Zinc is used to galvanize steel, which protects against corrosion and thereby, for example, extends the lifespan of offshore windfarms that are exposed to harsh conditions. Up to 40 kilograms of nickel can be needed for the battery of a single electric car, while it also uses smaller lead-based batteries for auxiliary purposes.

Circular economy

Metal circularity is an increasingly important aspect for companies and consumers as they make decisions based on total life cycle costs. Boliden recycles large volumes of copper, zinc and lead from electronics, steel mill dust and batteries. Recycled metal is growing in importance to the overall supply, but is not sufficient to meet demand and metals in many applications will not become available for recycling for decades. For example, power lines may have a lifespan of more than 40 years.

Sustainable operations

Fossil fuels typically play a large direct role in metal production and are in many countries also used indirectly to generate electricity needed. Other challenges facing the industry include the management of waste, access to water, reclamation of old operational sites as well as human rights. Europe is often a forerunner in dealing with these issues through more stringent permit requirements for mining and metal industries.

Boliden strives to be the industry benchmark in all matters related to sustainability and acceptance from authorities, local communities and other stakeholders is vital to gain the required permits to continue operations. In global terms, we have among the lowest carbon footprints through innovative solutions and good access to fossil fuel-free energy. Read more about our sustainability management on pages 14-15.

Important part of the economy

Around the world, the mining industry is an important source of job opportunities both directly and indirectly through its investments and purchase of goods and ser- vices. In Sweden, an estimated 7,400 people are employed directly by metal mining companies and 750 people in industrial mineral companies. A job in the mining industry creates 1.8 indirect jobs at the subcontractor level. This in turn creates further job opportunities in supermarkets, restaurants, culture and public services - all in all contributing to vibrant communities.

Metal production is also a major source of tax revenue for both the state and the sparsely populated areas where such companies operate. In some countries, mining companies account for more than 20 percent of total tax revenue. In 2023, Boliden paid SEK 1,763 million (2,815) in corporate tax in its operating countries, excluding social security contribu- tions, excise duties and property taxes.

Metal availability

In light of the above, demand for metals is expected to increase with urbanization, prosperity and climate-friendly technologies. For the base metals that Boliden produces, Wood McKenzie estimates demand increases of 75 percent for copper, 48 percent for zinc, 74 percent for lead and 94 percent for nickel between 2023-2050.

Access to metal is thus essential to societal progress and over-reliance on individual countries for supply has become a strategic risk. Accordingly, the European Commission in 2023 defined updated lists of critical and strategic metals

• including for example copper and nickel - with specific requirements for both European production and reliance on individual countries for supply.

4 Boliden Annual and Sustainability Report 2023

Transportation

Our metals are crucial for the future of the transport sector. For example, a typical EV contains 30-40 kg nickel and 80 kg copper. Galvanized steel is used by the automotive industry to prevent vehicles from rusting.

Recycling

All of Boliden's base metals are recyclable. Our Rönnskär smelter is one of the world's largest recyclers of electronic scrap, while Bergsöe recycles lead from more than 4 million car batteries every year.

Infrastructure Galvanizing steel using zinc prevents corrosion and thereby extends the lifespan of anything exposed to weather from buildings and infrastructure, to offshore windfarms.

Agriculture and food production

Galvanized steel is suitable for many agricultural applications. Nickel is a key component in stainless steel which, thanks to its non-toxic proper-

ties, is widely used in food production, e.g. in tanks of milk trucks. Sulphuric acid,

• by-productfrom Boliden's smelters, is used in the pro- duction of fertilizers.

Energy production More than 60 percent of global copper production is used to generate or conduct electricity. Copper is found in major electrical renewable energy components, such as turbines, generators, transformers, inverters and electrical cables.

Healthcare

There are many applications in the healthcare sector for Boliden metals. Copper has outstanding antiviral and antibacterial properties, which makes it an ideal material for surfaces that are constantly touched. Zinc is used in healing ointments, nickel in surgical instruments and lead in x-ray protective equipment and hospital backup batteries.

Boliden Annual and Sustainability Report 2023

5

Introduction | Investment case

Boliden as a sustainable  investment

With the right expertise and financial position to develop mining and smelting operations, a sustainable value chain and a competitive product portfolio,

we provide Europe with the metals needed for the societal climate transition.

The right expertise and financial position

Boliden has both the expertise and financial position to develop mining and smelting operations.

Our employees carry a valuable cultural heritage of almost a century of experience from mining and smelting operations. The value chain from mines to smelters creates synergies between the business areas and increases stability in the Group's earnings potential. This stability is reinforced by the tendency of treatment charges to move in the opposite direction to variable base metal prices. Over time, precious metal prices also tend to have a negative correlation to those of base metals, and this increases the stability of the Group's earnings potential. Production takes place in northern Europe, where political risk is low. Project management is run in-house with a focus on safety, production stability and technological development.

Boliden strives to maintain a healthy balance sheet and has defined financial targets that are adapted to prepare for market fluctuations, value-creating investments

and competitive dividends to shareholders.

Boliden's most important mines have long lifespans and the focus lies on mine-site exploration where the economic potential is the greatest. Acquisitions are made selectively, if and when the right opportunity arises.

A stable and sustainable value chain

Our excellent technical know-how combined with good access to fossil fuel-free electricity together make for manufacturing processes with world-class productivity and environmental performance. Regardless, Boliden has set the target of reducing absolute carbon dioxide emissions by 42 percent by 2030, with 2021 as the base year. We extract metals from both ore concentrates and secondary materials and take responsibility for the entire supply chain. The sustainability-focused partnerships we build with customers form an important local value chain in northern Europe.

Boliden is a leader in the development of methods for the reclamation of closed mines and the disposal of hazardous waste. We are working with the development of proactive risk management and increased involvement in occupational health and safety issues to improve safety for employees and contractors alike. Boliden is an active member of the leading industry organizations whose aim is to improve occupational health and safety in the mining and smelting industries.

A competitive product portfolio

Boliden provides the metals needed to improve society for future generations. The main metals are copper, zinc, nickel and lead, which are all important for a sustainable society.

Copper and nickel are crucial for increased electrification. Lead is used in the storage of electricity, and zinc is necessary for improving corrosion protection, thereby reducing resource utilization. Boliden's by-products include gold, silver, platinum and palladium. Gold is of great importance for the stability of global financial markets, while platinum and palladium are important for emission control.

All in all, our multi-faceted product portfolio makes us well- equipped for the opportunities and challenges we face in the metal markets of today and tomorrow.

6 Boliden Annual and Sustainability Report 2023

Read more about our sustainability work

Detailed descriptions of our sustainability work can be found in this report on the following pages:

• Overall sustainability work, pages 14-15
• Sourcing of raw materials and recycling, page 22
• Employees, pages 26-27
• Climate, pages 30-31
• Energy, page 32
• Procurement, page 33
• Environment, page 34
• Biodiversity, page 35
• Tailings and dam safety management, page 36
• Reclamation, page 37
• Responsible business, pages 38-39
• Indigenous peoples, pages 40-41

Case

Sustainability Parks offer hands-on biodiversity experience

Near Aitik, we have inaugurated our first Sustainability Park - a place where locals and tourists can enjoy, and learn about, the beautiful nature and rich biodiversity around our mine. Anders Forsgren, Social Sustainability Manager at Boliden Mines, shares the details.

What are the specific features of the Sarkanenä Sustainability Park at Boliden Aitik?

"The ecological compensation in Sarkanenä park is the result of a collaboration between Boliden, the Swedish University of Agricultural Sciences and the land owner Sveaskog. The forest here is old but has thus far lacked the characteristics of ancient woodland. The re-creation of structures typical for ancient woodland has been prioritized in our reclamation work at the site."

What is the main purpose of our Sustainability Parks? "The Sustainability Parks form a part of our ambition to, in return for what we have borrowed, give something back to both society and nature. They highlight the sites' history and biodiversity, and our presence today, yesterday and tomorrow. We invite the public to experience how we work with ecological reclamation and compensation but also with other sustainability aspects like climate and traditional Sami land use."

Are there any other parks in the pipeline and what characteristics will they have?

"All of Boliden's Sustainability Parks will be unique as they are created in harmony with the natural characteristics of the site. However, there are some commonalities: all parks will have a shelter, information signs in multiple languages and signs specially designed to address the curiosity of children. There will always be a focus on biodiversity and on informing the public about this. The guiding words for the creation of the parks are responsible, playful, innovative and accessible and these should be reflected in the experience of park visitors. As for other parks in the pipeline, there are many sites we envision for future parks and our ambition is to open a new park annually in the years ahead."

Anders Forsgren

Social Sustainability Manager Boliden Mines

Boliden Annual and Sustainability Report 2023

7

Introduction | Targets and outcomes­

Targets and outcomes

Strong profitability, high environmental

­performance and safe, healthy workplaces create the conditions for stable, successful operations over the long term.

FINANCIAL TARGETS	PERFORMANCE	DEVELOPMENT

Return on Investments

The return on investments shall be at least 10 percent.

10%

The return on investments shall be at least 10 percent.1) Any projects must be in line with the strategy and available resources. The return on operating activities measured as a return on capital employed was 12 percent (27). During the period 2019-2023, the rate of return averaged 19 percent per year. The change in comparison to 2022 is due to lower earnings.

MSEK
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
19	20

		%
		30
		25
		20
		15
		10
		5
		0
21	22	23

Capital employed Return on capital employed Target

Net debt/ equity ratio

Boliden strives to achieve a net debt/ equity ratio in an economic upturn of approximately 20 percent.2)

20%

At the end of 2023, the net debt/equity ratio was 19 percent (0). Furthermore, the net reclamation liability corresponded to 6 percentage points. The change in comparison to 2022 is due to a lower free cash flow, primarily as a result of higher investments and lower earnings.

MSEK				%
12,000				50
10,000				40
8,000				30
6,000
			20
4,000
2,000				10
0				0
19	20	21	22	23

Net debt

Net debt/equity ratio Net debt/equity ratio incl. net reclamation liability

Target

Dividend

The dividend shall correspond to one third of net profit for the year.

1/3

The proposed ordinary dividend is SEK 7.50 (15.00) per share, equivalent to 33.8 percent (33.1) of profit for the year. Last year, an extra payment in the amount of SEK

11.50 per share, through an automatic share redemption procedure was made. During the period 2019-2023, the ordinary dividend per share was 33.2 percent of the period's total net profit.

SEK/share
15
12
9
6
3
0
19	20	21	22	23

• Dividend, SEK/share

50Dividend share

40

30

20

10

0

1. Project yield must exceed Boliden's weighted average cost of capital (WACC) adjusted for a risk premium (nominal
   WACC before tax is set at 12 percent, equivalent to 10 percent in real terms). Major, long-term projects are usually calculated in real terms. The calculations are based on forecasts of interest rates, metal prices, exchange rates, inflation and other relevant assumptions based on internal analysis and external evaluations.
2. The target also includes net reclamation liability; see page 136 for the definition.

8 Boliden Annual and Sustainability Report 2023