JX Metals Smelting LPPM Responsible Platinum and Palladium GuidanceCompliance Report
The LPPM Responsible Platinum and Palladium Guidance Version 4 has been
established for Good Delivery Refiners to adopt high standards of due diligence in order
to combat systematic or widespread abuses of human rights, to respect environmental,social and governance (ESG) factors, to avoid contributing to conflict, to comply with highstandards of anti-money laundering and combating terrorist financing practice.
This report summarizes how JX Metals Smelting Co., Ltd. (hereinafter referred to as “JX
Metals Smelting”) has complied with the requirements of the LPPM Responsible
Platinum and Palladium Guidance Version 4.

Table 1:Refiner’s details
Refiner’s name

JX Metals Smelting Co., Ltd.

Location

14F Okura Prestige Tower
10-4 Toranomon 2-chome
Minato-ku, Tokyo, Japan

Reporting year-end

March 31, 2024

Date of Report

July 31, 2024

Senior management responsible for this report

Yutaka Yasuda
President&

Representative

Director

JX Metals Smelting’s evaluation
Table 2:Summary of activities undertaken to demonstrate compliance
Step 1: Establish strong company management systems
Compliance Statement with Requirement:
We have fully complied with Step 1: Establish strong management systems.
JX Metals Smelting has adopted a supply chain policy regarding due diligence forsupply chains of platinum and palladium.
Comments and Demonstration of Compliance:
JX Metals Smelting has the Gold, Silver, Platinum and Palladium Supply Chain Policy(hereinafter referred to as “Policy”), which is consistent with the model set out in the
Annex II of the OECD Due Diligence Guidance. The Policy sets out our responsibility
to respect environmental, social and governance (ESG) factors, and not to contributeto conflict, and our commitment to refraining from any action which contributes to thefinancing of conflict. We at least annually review the Policy and revise it as necessary.
We last revised the Policy in December 2022 with an approval by the Board. The Policy
isdisclosedonourwebsite(https://www.jx-

nmm.com/english/sustainability/csr_procurement/conflict_minerals/),

and

is

communicated to all our relevant staff by posting on our intranet and circulating via
email.
JX Metals Smelting has set up an internal management structure to support supply
chain due diligence.
Comments and Demonstration of Compliance:
JX Metals Smelting operated an internal management system to support supply chain
due diligence, which includes the definition of the governance, roles andresponsibilities, internal audit, communication and management review by the Board
as per the Policy. Authority and accountability for supply chain due diligence areassigned to the Board. The Board members were provided training in May and June
2023 to update their knowledge. The Board has assigned the General Manager of
Administration Division as the Compliance Officer who has suitable experience to takeresponsibility for the implementation of the due diligence process, and the Compliance
Officer has a direct line of reporting to the Board. In addition, JX Advanced Metals
Corporation’s Metals & Recycling Division and Marketing Dept. perform supplier risk
assessment as part of due diligence process. If we identify high-risk supply chain
through our due diligence process, the Compliance Officer conducts enhanced due
diligence and reports the results to the Board. The Board then determines whether toenter the transaction and gives appropriate instructions to the Compliance Officer. JX
Metals Smelting provided training on due diligence to employees involved in
procurement of platinum and palladium in March 2024, focusing on an overview of theconflict minerals issue, the results of the third-party audit in the previous year, andany necessary actions to be taken by each department. The training was attended by
167 employees. In addition, The training materials and internal regulations are postedon the intranet to be made them known to our employees and are communicated to
employees of JX Advanced Metals Corporation by circulating via email.

We conducted internal audit in March 2024 and found that some UBOs' identity
documents had not been obtained. In response to this internal audit finding, we
subsequently obtained the UBOs' identity documents and the issue has now been
resolved.
JX Metals Smelting has established a traceability system over platinum andpalladium supply chains, including chain of custody mapping and identification of
supply chain actors.
Comments and Demonstration of Compliance:
JX Metals Smelting has a platinum and palladium -bearing materials receipt process.
Specific documents such as those showing the origin of raw materials, weight andassay, shipping/transportation documents, etc. must be received and transactional
details entered before we process the platinum and palladium -bearing material. The
received documents are stored in a prescribed database, and the information isaccurately registered in our transaction system on a lot-by-lot basis. We haveintroduced a checklist for registration of information on new suppliers of recycle
materials since fiscal 2021. Information on new suppliers now cannot be registered in
the transaction system without attaching a completed checklist, which we expect toensure that supplier risk assessments be implemented before commencing
transactions.
JX Metals Smelting identifies the origin of platinum and palladium -bearing materials
by obtaining KYC Questionnaires and Certificates of Origin from suppliers andpreparing due diligence screening tables. We also perform supply chain compliancechecks using the Dow Jones Risk Database.
As a result of the foregoing, we identify one high-risk supply chains for fiscal year
2023, although there was no transaction determined zero-tolerance. Against the highrisk supply chain that we identified, the Compliance Officer conducted enhanced due
diligence and reported the results to the Board. The Board then determined to proceedwith the transaction and directed the Compliance Officer to continue monitoring below
for the high-risk supply chain.
-

1. For each shipment, we shall confirm with our suppliers whether there are any
increases or decreases in the number of upstream suppliers of our supplier("Secondary Suppliers”).

-

2. If there is an increase, we shall obtain information on the locations andbusiness types of the Secondary Suppliers and conduct a risk assessment for the
supply chain.

-

3. We shall obtain approval from the Compliance Officer regarding whether tocontinue business relationship with the supplier based on the result of 1.and 2..

JX Metals Smelting has strengthened company engagement with platinum andpalladium supplying counterparties, and where possible, assisted platinum andpalladium supplying counterparties in building due diligence capabilities.
Comments and Demonstration of Compliance:
Before entering transactions, we send via e-mail the Policy and the KYCQuestionnaire to our suppliers of platinum and palladium-bearing materials andrequest them to commit to the Policy or submit their own policy, and to fill out theKYC Questionnaire. We have obtained the commitment from our all suppliers ofplatinum and palladium bearing materials to the Policy. In addition, when the Policy
is revised, we also send via e-mail the Policy to all of our suppliers of platinum andpalladium-bearing materials and request them to commit to the revised Policy.
There were no due diligence issues on which suppliers/counterparties were specificallyengaged during reporting period.
There were no purchases of platinum and palladium-bearing raw materials fromstate-owned companies operating in EITI countries for fiscal 2023.
JX Metals Smelting has established a company-wide confidential grievancemechanism.
Comments and Demonstration of Compliance:
JX Metals Smelting has a mechanism allowing employees and external stakeholders
to voice concerns anonymously over the platinum and palladium supply chain or a
newly identified risk via an e-mail contact form(https://www.jxnmm.com/english/sustainability/csr_procurement/conflict_minerals/ , email
address: conflict_minerals@jx-nmm.com). A functional hot-line is established, whichis reviewed by the Compliance Officer. There was no concern raised regarding theplatinum and palladium supply chain in fiscal 2023 and no remaining concerns to beclosed out.
Step 2: Identify and assess risks in the supply chain
Compliance Statement with Requirement:
We have fully complied with Step 2: Identify and assess risks in the supply chain.
JX Metals Smelting has a process to identify risks in the supply chain.
Comments and Demonstration of Compliance:
JX Metals Smelting identifies and assesses risks in the supply chain. JX Advanced
Metals Corporation’s Metals & Recycling Division and Marketing Dept. perform
supplier risk assessment as part of due diligence process by obtaining KYCQuestionnaires and Certificates of Origin from suppliers, preparing due diligencescreening table and checking compliance matters using the Dow Jones risk database.
The Compliance Officer is informed of the result of assessment as above. If a high-risk

or zero-tolerance supply chain is not identified, the Compliance Officer approves thetransaction. If a zero-tolerance is identified, the transaction must not commence or besuspended immediately. If a high-risk supply chain is identified, enhanced due
diligence must be conducted and the results must be reported to the Board. The Board
then determines whether to enter the transaction and gives appropriate instructions
to the Compliance Officer. In case the Board determines to enter the transaction withhigh-risk supply chain, we request the supplier to prepare and implement an
improvement plan to eliminate the high-risk, and if there is no progress in eliminating
the high-risk in accordance with the improvement plan within 6 months, we shallsuspend the transaction. The Board continues to monitor the progress of the
improvement plan.
JX Metals Smelting classifies identified risks in light of the standards of its due
diligence system.
Comments and Demonstration of Compliance:
Supply chain due diligence comprising all measures required by the LPPM
Responsible Platinum and Palladium Guidance Version 4 shall be performed before
entering a business relationship with any platinum and palladium supplying
counterparties. We use information provided by Teikoku Databank, Ltd. and Dow
Jones and Company, Inc. to assess the risks in our supply chain.
We conduct appropriate scrutiny and monitoring of transactions undertaken throughthe course of the relationship following a risk-based approach. JX Advanced Metals
Corporation’s Metals & Recycling Division and Marketing Dept. perform supplier risk
assessments as part of due diligence process.
JX Metals Smelting has established a process for the identification of Conflict Affected
and High-Risk Areas (hereinafter referred to as “CAHRAs”). We shall review the listat least once a year and make changes to it as necessary. The Compliance Officer is
responsible for keeping the CAHRAs list up-to-date and accessible to anyone involvedin our platinum and palladium raw material supply chain Due Diligence.
We include in the definition of CAHRAs the Democratic Republic of the Congo(hereinafter referred to as "DRC”), neighboring countries of DRC, and countries whereminerals from DRC or its neighboring countries are known or reasonably suspected totransit.
We shall define CAHRAs based on the following information sources..
-

Sanctions lists (US, UK, EU, UN, and relevant sanctions lists)-

Dodd Frank s. 1502-

EU CAHRA list-Heidelberg Barometer-

Fragile States Index or equivalent-

UN Human Rights Office of the High Commissioner or equivalent-

Reports (including relevant country reports) by the Financial Action Task Force(FATF)-

Credible market intelligence on high-risk platinum centres/transit hubs and on
countries where there is a high risk of money laundering-- The newsletter from a precious metals trade association

In April 2023, we revised the CAHRAs list according to the process stipulated in ourmanual. In addition, we revised the sources to be considered for identifying CAHRAs.
We revised the sources to be considered for identifying CAHRAs by revising ourmanual in May 2024.
We determine platinum or palladium supplied to us is zero tolerance when platinum
or palladium supplied to us i) originates from areas designated as World Heritage
Sites; ii) is provided by suppliers that are located in countries or regions designatedby us as zero tolerance target countries or regions; iii) is confirmed or reasonably
suspected to originate from, or pass through, countries or regions designated by us aszero tolerance target countries or regions; or (iv) is sourced in breach of internationalsanctions; or supplier, other known upstream companies or their Ultimate Beneficial
Owners (UBOs) are known money launderers, fraudsters or terrorists, or have been
implicated in serious human rights abuses, or in direct or indirect support toillegitimate non-state armed groups. We determine platinum or palladium supplied to
us is high-risk when platinum or palladium supplied to us meets any of the following
criteria.
(1) Mined platinum and palladium(i) for location-based high risks, the mined platinum or palladium;-

originates from, has transited or has been transported via CAHRAs;-

is claimed to originate from a country through which platinum and palladiumfrom CAHRAs in known, or reasonably suspected to transit;-

is claimed to originate from a country that has limited known reserves or stocks,
likely resources or expected production levels of platinum or palladium;-is claimed to originate from recyclable/scrap or mixed sources and has beenrefined in a country where platinum or palladium from CAHRAs is known orreasonably suspected to transit;.

(ii) for supplier-based high risks, the supplier;-or its UBOs are located in CAHRAs or are Politically Exposed Persons (PEPs);-

has activities in a higher-risk business activity such as arms, gaming and casinoindustry, antiques and art, and sects and their leaders;-has sourced platinum and palladium-bearing raw materials from CAHRAs in
the last 12 months; or-

has material discrepancies/inconsistencies in the documentation provided orhave refused to provide requested documentation.

(iii) for type of material based high risks, the mined platinum or palladium is;-sourced from Artisanal and Small-scale Mines (ASM);-

produced with the use of mercury; or-contributing to catastrophic harm or highly adverse ESG factors, to the extent
that we are able to identify this (e.g., through a record in the public domain or
in our due diligence file).

(2) Recycled platinum and palladium(i) for location-based high risks, the recycled platinum or palladium;-

originates from, has transited or has been transported via CAHRAs;-

is claimed to originate from a country through which platinum from CAHRAs is
known, or reasonably suspected, to transit, and/or is unjustifiably claimed tohave originated from a country that has limited exports of platinum.

(ii) for supplier-based high risks, the supplier;-

operates in a money laundering high-risk country;-

or its UBOs are located in CAHRAs or are Politically Exposed Persons (PEPs);-

engages in high-risk business activities, such as arms dealing, the gaming andcasino industry, trading of antiques and art, or religious sects and their leaders;-has sourced platinum and palladium-bearing raw materials from CAHRAs in
the last 12 months; or-has significant unexplained geographic routing from their supplier orcounterparty in the supply chain.

(iii) for type of material based high risks, recycled platinum or palladium is;-from an intermediate refinery or trader with a high-risk supply chain or a
trading counterparty sourcing from an intermediate refinery with a high-risk
supply chain; or-contributing to catastrophic harm or highly adverse ESG factors, to the extent
that we are able to identify this (e.g., through a record in the public domain or
in our due diligence file).

If our due diligence finds that a particular supply chain is high-risk because either
platinum/palladium supplied to us or a supplier meets any of the above high-risk
criteria, we conduct enhanced due diligence, namely, on-site surveys as well as checksand assessments using appropriate information sources, so that the Board candetermine whether or not to proceed with the transaction.
JX Metals Smelting has undertaken EDD measures for identified high-risk supply
chains.
Comments and Demonstration of Compliance:
If high-risk supply chains are identified, the Compliance Officer shall report to theBoard the process and results of enhanced due diligence conducted. We shall conductenhanced due diligence by conducting site visit using a precious metals tradeassociation's site visit report template to substantiate findings from document-based
supply chain due diligence. The Board must determine whether to approve ordisapprove all new suppliers classified as high risk. The Board retains the ultimate
control and responsibility for the platinum or palladium supply chain.
If we source recycled platinum or palladium from intermediate refiners directly, we
shall identify the intermediate refiners’ UBOs, and obtain independent assurance
reports on the intermediate refiners’ responsible sourcing practices to confirm whether
the independent assurance report i) includes conformance with an OECD aligned
responsible sourcing scheme; ii) is commissioned by the intermediate refiner; and iii)
is completed before the start of a new business relationship with us.
If we source recycled platinum or palladium from intermediate refiners indirectly, we
shall use best efforts to identify the intermediate refiners and their UBOs. We shallconduct due diligence to determine if the supply chain of the intermediate refiners is
high-risk. If the supply chain including the intermediate refiner is determined to bea high-risk supply chain, we shall determine whether the intermediate refiner’s
supply chain due diligence process is audited against an OECD aligned responsible
sourcing scheme, and the Board must determine whether to enter the transaction andgive appropriate instructions to the Compliance Officer. We did not source any
platinum or palladium from intermediate refiners for fiscal year 2023.
Since there was one transaction identified as a high-risk supply chain during thereporting year, the Compliance Officer conducted the enhanced due diligence to suchhigh-risk supply chain and reports the results to the Board. As a part of the enhanced
due diligence, a site visit was undertaken at the recycled materials supplier's site
located in a CAHRA by an employee, who was in charge of the transaction of the highrisk supply chain and periodically had taken training on due diligence provided by JX
Metals Smelting. During the site visit, we used a precious metals trade association'ssite visit report template to verify information on the supplier's business operations
and entire supply chain and assess risk in terms of money laundering, workers andsecurity. As a result of the risk assessment based on the site visit, we identified no
specific underlying issues. The Board determined to proceed with the transaction anddirected the Compliance Officer to continue proper monitoring for the high-risk supply
chain.
Step 3: Design and implement a management system to respond to identified risks
Compliance Statement with Requirement:
We have fully complied with Step 3: Design and implement a management system torespond to identified risks.
JX Metals Smelting has devised a strategy for risk management of an identified risk
by either (i) mitigation of the risk while continuing to trade, (ii) mitigation of the risk
while suspending trade or (iii) disengagement from the risk.
Comments and Demonstration of Compliance:
JX Metals Smelting has devised a strategy for risk management according to thenature of the identified risk whereby the Board decides on one of the following. (i) incase money laundering, terrorist financing, fomenting conflict, human rights abuses,
direct or indirect support for illegal non-state armed groups, or fraudulent
misrepresentation of the country of origin of platinum, palladium is being taking
place, or is highly likely to be, the transaction must not commence or be suspended
immediately; (ii) in case money laundering, terrorist financing, fomenting conflict,human rights abuses, direct or indirect support for illegal non-state armed groups, or
fraudulent misrepresentation of the country of origin of platinum, palladium may betaking place or significant impact on ESG factors has been recognized the transaction
must be suspended and investigated; or (iii) in case due diligence has concluded that
there has been (a)direct or indirect assistance, bribery, or bribes to public or private
security forces, (b)misrepresentation of country of origin of platinum or palladium
without fraud, (c)non-compliance with taxes, fees and mining fees payable to thegovernment, or (d)violations of environmental, occupational health and safety, local
community laws or (e) material regulatory violations of ESG factors, but the supplieris acting proportionately and in good faith, the transaction may be continued but risk
mitigation plan must be implemented.
In the case of implementation of risk mitigation plan, JX Metals Smelting requires
suppliers to implement an improvement plan with clear performance targets within areasonable period, continuously monitors the implementation status of the plan, andreports the findings to the Board. If the improvement plan fails to produce results
within a certain period, JX Metals Smelting shall consider suspending or dissolving
the relationship with the supplier.

No reasonable risk of our involvement in money laundering, terrorist financing,
conflict, human rights abuses or violations of ESG factors-related legal requirements
was identified in our due diligence, including enhanced due diligence, conducted infiscal 2023.
Therefore, there was no cases of cooperation with national or local government
authorities regarding high-risk supply chains.
Step 4: Independent third-party assurance
Compliance Statement with Requirement:
We have fully complied with Step 4: Obtain Independent Third-Party Assurance on
Supply Chain Due Diligence Practices.
Comments and Demonstration of Compliance:
JX Metals Smelting engaged the services of the assurance provider KPMG AZSA
Sustainability Co., Ltd. (hereinafter referred to as “KPMG AZSA”), and their
independent assurance report is attached. At the Board meeting held in April 2024,
the Board ensured that KPMG AZSA is independent of the organization and has thenecessary effectiveness to carry out the engagement, and approved to enter into
Assurance Service Agreement with KPMG AZSA.
Step 5: Report on supply chain due diligence
Compliance Statement with Requirement:
We have fully complied with Step 5: Report on supply chain due diligence.
The Policy is available on JX Advanced Metals Corporation’s website, and ourCompliance Report with the independent assurance report is available on JX
Advanced Metals Corporation’s website(https://www.nmm.jxgroup.co.jp/english/sustainability/csr_procurement/conflict_minerals/).
JX Metals Smelting’s overall conclusion

Table 3: Management conclusion
Is the Refiner in compliance with the requirements of the LPPM Responsible Platinum
and Palladium Guidance Version 4. for the reporting period?
Yes
In conclusion, JX Metals Smelting implemented effective management systems,
procedures, processes and practices to conform to the requirements of the LPPM

Responsible Platinum and Palladium Guidance Version 4, as explained above in Table
2, for the reporting year ended March 31, 2024.
JX Metals Smelting is committed to continuous improvement, and any corrective
actions identified will be monitored internally on a regular basis.

Table 4: Other report comments
If users of this report wish to provide any feedback to JX Metals Smelting with respect
to this report, they can send an e-mail to the functional mailbox: conflict_minerals@jxnmm.com.