Highfield Resources : Sustainability Report 2021

Sustainability

Report 2021

highfieldresources.com.au

geoalcali.com

Contents	Page
CEO Letter	2
About this Report	4
Why at the Forefront of Sustainability?	6
Future-facing commodity for a decarbonised world in a scaling food security crisis 6
Environmental, social and governance leadership	7
Vision and values	8
Region enables a mutual benefit	10
What is material to our business?	14
Stakeholder inclusiveness	14
Material topics identified	15
Goals and Performance	16
What we have planned and achieved	18
Our Progress to Building a More Sustainable Business	20
Muga Mine, at the forefront of sustainability	20
Stakeholder dialogue	26
Community, building a future together	30
Our people, the Company's main ambassadors	34
The Group	36
Geoalcali SLU	36
Directors	38
Communication on Progress Report (CoP)	42
GRI Index	50

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CEO Letter

Dear Readers, 

We received the Mining Concession for the Muga Mine in July 2021. This has been the final stage of a long, comprehensive and rigorous permitting process.  At the same time, it is the starting point of an exciting period when we are going to build the Muga Mine, a world-class potash Project.  

This Sustainability Report highlights the most relevant activities that are keeping ESG at the core of our business. It also highlights the latest updates which are contributing to develop a more robust, innovative Project, at the forefront of sustainability.  

One of the most remarkable aspects of Muga is its positive contribution to the socioeconomic development of the community. This was reconfirmed by the "Observatorio de la Realidad Social", a social department of the Government of Navarra, when they released on 4 March 2021 the Social Baseline Study of the Muga Mine. The Study indicates that Muga has a significant positive socioeconomic potential for the local region, with the capacity to reverse local depopulation which is severely affecting the local communities whilst contributing to fight unemployment. Muga could significantly boost the economies of the rural communities with new business opportunities.  In this sense, we have started our engagement with potential local suppliers through several informative sessions in the area around the mine-site. These sessions have been a great success with more than 200 companies, and local providers participating in these sessions. The response to these sessions by the community underlines once again the high degree of acceptance and sentiment of urgency, that all stakeholders share with us, to start construction of Muga as soon as possible.  

Environmentally, Muga is a zero residue mine.  That is based on circular economy principles in all areas, most importantly waste and water management.  Muga is the only room and pillar potash mine in the world that has incorporated this strong commitment, leaving no mineral residues on surface at the end of the mine. 

We announced an up-to-date Feasibility Study for the Muga Project including all conditions incorporated in the mining concession. This Feasibility Study Update reconfirmed Muga's outstanding economics based on long-term price estimates.  The updated numbers have been prepared now with a significantly higher degree of confidence following the engineering and procurement work undertaken over the last few months.  

In this pandemic era, we have witnessed an increase in the risk associated with political and economy instability, which have raised awareness on the importance of raw materials as a matter of strategic security. The extractive industry plays a strategic role as a supplier to the rest of

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Highfield Resources CEO, Mr. Salazar, said: "An open communication with stakeholders, as well as developing goals and solutions to ESG challenges are a priority for our business to demonstrate sustainable value for shareholders and the Muga community." 

industries of many of the basic raw materials for modern society. In this context, the European Commission's European Raw Materials Initiative, sets as a priority for a well-functioning EU economy access to mineral raw materials and their procurement at affordable prices. The EU strategy is based on access to raw materials, sustainable supply chains from EU sources and reduced imports. Geopolitically, the strategic role of potash, especially in Europe, is only becoming more apparent with recent developments in Russia and Belorussia, world leaders in potash production.  In a current environment with increasing global prices, Muga is located in an strategic location to serve European markets.   

Potash is also a strategic commodity to support efforts to combat climate change. The higher crop yields generated by potash reduce the need of deforestation to provide additional arable land. Finally, potash, as a key fertilizer, contributes to food security. The UN has qualified at 'unprecedented catastrophic levels1' the trend of the imbalance between population growth and less arable land. Potash is a key enabler to reverse this trend. 

With Muga, we have a sustainable project, producing a sustainable commodity. A great future ahead for all of us. Let´s construct it together.

Ignacio Salazar

CEO and Managing Director

1https://news.un.org/en/story/2021/10/1102072

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