Sustainability Report2023

Allkem Sustainability Report 2023

Contents2

04

About this Report

06

About Allkem

08

Our Purpose

12

Our Impact

12

Producing Lithium Sustainably

13

FY23 Value Creation

15

Our Operations

18

Our Growth Projects

20

Risk and Governance24

Climate Change Risk

26

Human Rights Risk

29

FY23 Focus Areas

31

Climate Change and Decarbonisation

37

Net Zero Action Plan

38

Human Capital

47

Health Safety and Wellbeing

47

Diversity and Inclusion

50

Future Ready Workforce

52

Natural Capital

55

Land Use and Biodiversity Management

57

Water Use

61

Waste and Tailings Management

64

Shared Value

67

First Nations and Pueblos Originarios Partnerships

67

Community Capacity Building Case Studies

70

Tax Transparency

75

Partnerships, Memberships and Affiliations

76

Independent Auditor’s Limited Assurance Statement

77

Allkem Sustainability Report 2023

Letter from the Managing Director and CEO

3

Letter from theManaging Director and CEO
Thank you for your interest in our seventh Sustainability Report, our second report since
the successful merger of Orocobre Limited and Galaxy Resources and the renaming of thecompany as Allkem Limited.
In a year when the World Economic Forum has defined
climate change as the most severe long-term risk we faceat the global scale, I am proud to be leading a company
with a purpose aligned with decarbonisation. We areseeing a shift away from fossil fuels and a move towards
the critical minerals needed for battery storage andtransport electrification. Support from Governments
and auto manufacturers around the globe is resulting in
unprecedented growth in lithium demand that continues
to exceed forecasts. It is our focus to continue bringing
quality lithium products into the market to enable thisimportant transition.
Following the sale of Borax during the year, 100% of
our assets and business activities are now focused on
our lithium growth strategy and aligned with a lower
carbon economy.
I am pleased to report that our Olaroz Lithium Facility
in the Jujuy Province of Argentina has again achieved
record production this year of 16,703 tonnes of lithium
carbonate. After experiencing some initial challenges, our
Mt Cattlin mine successfully implemented operational
improvements, and completed the year on a high by
producing 130,984 dry metric tonnes of spodumene
concentrate and achieving record revenue.

Allkem Sustainability Report 2023

Our James Bay project in Quebec finalised the Federal
Government approval process in January 2023 andour teams continue to work with the Cree Nation
Government and the Quebec Government to finalise
the remaining approvals.

4

At our Sal de Vida project this year, we established the firstever IFC financing for a lithium project. To achieve this,our sustainability approach was assessed against the IFC’s
globally recognised environmental and social performancestandards. We have also defined key sustainability
performance indicators for emissions intensity, renewableenergy and workforce diversity that are linked to theproject financing in another first for a greenfield mining
project. This financing facility aligns our sustainability
performance with access to lower cross-border risk capital.

Allkem’s sustainability strategy links our business modelwith our purpose and outlines how we generate long term
value for all our stakeholder groups. Our teams engage
with these groups during the year to understand what ismost important to them.
We are prepared for increased expectations aroundtransparency of sustainability performance frominvestors, regulators and from our customers in thebattery value chain. We maintain our commitment
to the United Nations Global Compact and for thethird consecutive year, we have had key sustainability
performance metrics externally assured against theStandards of the Global Reporting Initiative.
At Allkem, our people are central to our success, andwe value the diverse perspectives and experience thatexist across our global teams. The skills, knowledge andexpertise in our workforce across both hard rock andbrine operations sets us apart from our peers. Looking
after our people is our top priority. We achieved ourgroup level safety targets this year with TRIFR of 1.98
(per million hours) showing a 24% improvement from theprior year. The 12-month moving average Lost Time Injury
Frequency Rate was 0.62 going beyond the FY23 targetof <0.9. As we grow, the number of vehicles using remotetransportation routes around our sites is increasing. Ourroad safety department was established during the yearwith a focus on improving safety for all road users fromour operations, contractors and local communities. Initialprograms have focused on vehicle safety critical controls
and driver training.
Our teams have worked hard during the year identifying
and evaluating opportunities that we have incorporated
in Allkem’s first Net Zero Action Plan. We acknowledge
that there is a lot of work still to do, particularly for difficult
to abate process emissions throughout our value chain.
However, by initially focusing on opportunities using
proven technology within our direct control, we havemade significant progress addressing our scope 1 and 2
baseline emissions.

We continue to build and maintain respectful partnerships
with local and indigenous communities in the areas where
we operate. During the year, we updated our participationagreement with the Olaroz Chico community reflecting
their ongoing support of the Olaroz Lithium Facility.
Nearly 40% of our employees at Olaroz are from the 10
local communities surrounding the site and over 70% arefrom the province of Jujuy. During the year, this projectcontributed around US$400 million to the Argentine
economy through employee salaries, supplier spend,
corporate income tax, employer payroll tax, export duties,
royalties and dividend payments.
We have also maintained our regular program ofengagement with our Mt Cattlin Community Consultation
Group to increase collaboration and identify opportunities
to generate shared value with the Ravensthorpe
community. We will continue to work closely withthe community and government while we evaluate
underground mining options to further extend themine life.

I would like to thank our employees, management
team and Board colleagues for their hard work andcommitment contributing to Allkem’s success this year.
To the communities with whom we operate every day, ourjoint venture partners and the National, Provincial andLocal governments of Argentina, Canada and Australia
who continue to support our business, I would also like toextend our gratitude.
Together, we produce long term, shared value bysustainably developing critical lithium resources to enableglobal decarbonisation.

Martín Perez de Solay
Managing Director and CEO“I believe that to understandsomeone else, you must walkin their shoes. It is important toremember though, that to walk insomeone else’s shoes, we mustfirst take off our own.”

Allkem Sustainability Report 2023

We have proposed a merger with Livent to create aleading global integrated lithium chemicals producer.
Combining the many complementary assets of bothcompanies will enhance business critical scale, global
capabilities and rapidly deliver our long-term strategy ofvertical integration. The merged business model will allow
enhanced operational flexibility and potential for greater
value capture across the supply chain and ultimately for all
our stakeholders.

5About this Report
Our 2023 financial year (FY23) Sustainability Report describes the sustainability
performance of Allkem Limited. This is our seventh Sustainability Report and our second
as Allkem Limited following the completion of the merger of Orocobre Limited with Galaxy
Resources Limited in August 2021.
The scope of our sustainability reporting and data metrics
includes key performance data from the Mt Cattlin hardrock mining operation in Western Australia, the Olarozbrine-based lithium facility in Jujuy Province Argentina
operated by Sales de Jujuy S.A. (“Olaroz” or “SDJ”), andour growth projects at Sal de Vida (“SDV”) in Catamarca
Province, Argentina and the James Bay project in Quebec,
Canada. The data provided in this document covers theperiod between 1 July 2022 and 30 June 2023 unlessotherwise stated. The scope of performance data reporting
does not include the Naraha Lithium Hydroxide Plant
which is managed by our joint venture partner Toyota
Tsusho Corporation (“TTC”).
Allkem completed the sale of Borax Argentina S.A. on the
16th of December 2022 and as a result, this entity is also
outside the scope of this report unless otherwise stated.
On the 10th of May 2023, Allkem announced a proposed
merger of equals with Livent. At the time this report was
published, this merger was expected to complete aroundthe end of the 2023 calendar year.

Allkem Sustainability Report 2023

This report has been prepared with reference to the GRI
Standards, as well as the IFRS S1 and S2 standards where
relevant. The report documents the Company’s progressagainst the 10 Principles of the UN Global Compact
and contribution to the UN Sustainable Development
Goals (“SDG”).

6

Limited external assurance was conducted over key
GRI indicators referenced in this report and associatedperformance data. This included analysis of the applicationof GRI standards and the principles of content and quality.
The independent limited assurance report is included inthis report here. Further supporting information regarding
performance in FY23 is available on our website as follows:•

Performance Data: additional detailed sustainability
indicators related to the performance of each focus area•

Case Studies: additional information relating to our local
community initiatives and programs where we createshared value•

Management Approach Disclosures: Summary
documents outlining strategic importance andmanagement approach in place to address main topics
of relevance to our stakeholders•

GRI Standards/UNGC/SASB/SDG Contents Index:
outline of material topics and content defined by the
GRI Standards, SASB standards, the Principles of the
UN Global Compact and UN Sustainable Development
Goals, which enables the reader to navigate the reportand promptly locate information in the Sustainability
Report or other references.

We welcome any comment or suggestion you may
wish to share on this report through our email address:
sustainability@allkem.co.

GRI Standard

Performance Data Location

Metric203-1

Community

Community Investment (by activity): Grants and Donations,
Strategic Community Investment & Commercial Initiatives.

204-1

Value Chain

Proportion of spending on local suppliers

405-2

PeopleRatio of basic salary and remuneration of women to men

2-7. aPeopleTotal number of employees, breakdown by gender and region

2-30

PeopleEmployees covered by collective bargaining agreements

302-1

Environment

Energy consumption within the organisation

303-3

Environment

Water extraction

305-1

Environment

Direct (Scope 1) GHG emissions

305-2

Environment

Energy indirect (Scope 2) GHG emissions

305-3

Environment

Other indirect (Scope 3) GHG emissions (excluding Mt Cattlin)

306-3

Environment

Waste generated (Includes mineral waste: tailings, mine waste
rock, reused mine waste).

306-4

Environment

Waste diverted from disposal

306-5

Environment

Waste directed to disposal

304-1

Environment

Operational sites owned, leased, managed in, or adjacent to,protected areas and areas of high biodiversity value outside
protected areas

403-9

Health & Safety

Work-related injuries (LTIFR, TRIFR, Fatalities and Tier 1 process
safety events/million hours worked.)

Allkem Sustainability Report 2023

Scope of metrics included in FY23 limited assurance

7About Allkem
Allkem is a highly successful speciality
lithium company, formed from the mergerof Orocobre Limited (“Orocobre”) andGalaxy Resources Limited (“Galaxy”) in
August 2021.

James Bay (100%)
Stage

Engineering

Type

Hard rock

Product

Spodumene concentrate

TorontoMontreal

Allkem Sustainability Report 2023

Olaroz (66.5%)

8

Stage

Operating/development

Type

Brine

Product

Carbonate

Cauchari (100%)

Buenos Aires
Sal de Vida (100%)Stage

Early studies

Stage

Construction

Type

Brine

Type

Brine

Product

Carbonate

For information on Reserves and Resource estimates, see Allkem ASX Release Allkem
confirms material growth profile underpinned by 40 Mt Resource, 25th September 2023

Our company has a diverse
global portfolio of high-quality
lithium assets that produce
critical battery materials used indecarbonising our economies.

Naraha (75%)
Commissioning

Type

LiOH
conversion facility

Product

Hydroxide

BrisbaneSydneyMt Cattlin (100%)
Stage

OperatingType

Hard rock

Product

Spodumene concentrate

Key
Operating Asset
Development Asset
OfficeAllkem Sustainability Report 2023

Perth

Stage

9

Our unique portfolio includes
lithium brine operations inArgentina, a hard-rock lithium
operation in Australia and alithium hydroxide conversion
facility in Japan.
We are dual listed on the Australian Securities Exchange
and Toronto Stock Exchange and have establishedpartnerships with Toyota Tsusho Corporation and
the Jujuy Provincial Government for the Olaroz Lithium
Facility. Across our global operations we also have strong
working relationships with the Argentine, Australianand Canadian Governments, Catamarca Provincial
Government, the Government of Québec and theWestern Australian Government.

Allkem Sustainability Report 2023

Our unique portfolio includes lithium brine operations inArgentina, a hard-rock lithium operation in Australia and alithium hydroxide conversion facility in Japan. New project
developments are underway in Argentina and Canada thatenhance Allkem’s scale and product flexibility to meetsignificant growth in demand that is underpinned by the
global transition to a net zero carbon future.

10

Allkem Hard Rock Process

Allkem Brine-Based Process
Brine
Brine
Li+
Li+

Open
Open Pit
Pit Mining
MiningROM
ROM Stockpile
Stockpile++ LimeLime

Well
Well field
field

Pre-Pond
Pre-Pond

Lime
Lime Plant
Plant

Concentrated
Concentrated Brine
Brine
Li+
Li+

Crushing
Crushing andand Screening
Screening

Rejects
Rejects

Tailings
Tailings Storage
Storage

Carobonation
Carobonation Plant
Plant

Evaporation
Evaporation Ponds
Ponds++ SodaSoda Ash
Ash

Precipitated
Precipitated Salts
Salts

Product
Product

Product
Product

Spodumene
Spodumene Concentrate
Concentrate
Grade
Grade ofof ~6%~6% lithium
lithium oxide
oxide (Li2O)(Li2O)

Lithium
Lithium Carbonate
Carbonate (Li2CO3)(Li2CO3)

ExportExportExportExportCustomer Processes
and End Use

Customer and JV Processes
and End Use

RotaryRotary Kiln
Kiln (Calcination)(Calcination)
Acid
Acid Roasting
Roasting
Purification
Purification

Precipitation
Precipitation
Filtration
Filtration
Crystallisation
Crystallisation

Lithium
Lithium Hydroxide
Hydroxide

Used
Used inin Battery
Battery Storage
Storage Value
Value Chain
Chain

Allkem/JV
Allkem/JV processes
processes

External
External processes
processes

NarahaNaraha Hydroxide
Hydroxide
Conversion
Conversion Process
Process++ LimeLime
Filtration
Filtration

Crystallisation
Crystallisation
DryingDryingLithium
Lithium Hydroxide
Hydroxide

Used
Used inin Battery
Battery Storage
Storage
Value
Value Chain
Chain

Lithium
Lithium Carbonate
Carbonate

Used
Used inin Battery
Battery Storage
Storage
Value
Value Chain
Chain

Lithium
Lithium Carbonate
Carbonate
Used
Used inin Glass/Frit/
Glass/Frit/
Flux
Flux Production
Production

Allkem Sustainability Report 2023

Dense
Dense Medium
Medium Separation
Separation(DMS)(DMS) andand sorting
sorting11

Our Purpose

Our Impact

Allkem produces core materials that are
fundamental for decarbonisation.

Allkem’s strong lithium development pipeline andvertically integrated production base positions us well to
supply this growing market demand. During FY23, 99% of
Allkem’s revenue was from our lithium products. Currently,
on average, approximately 60% of global demand forlithium is from electric vehicle batteries and this increases
to 70% when stationary energy storage systems are also
included4. Based on our customer profile, we estimate that
95% of our products in FY23 contributed to the energy
storage value chain.

In 2023, the World Economic Forum1 ranked ‘Failure to
mitigate climate change’ as the most severe long-termrisk on a global scale as well as the global risk for which
we are the least prepared. To avoid the worst impacts ofclimate change, global warming must be limited to 1.5°C
by achieving net zero global emissions by 2050.
Decarbonisation of road transport is a critical elementof the global net zero transition, accounting for
approximately 16% of the total reductions required by2030 under the International Energy Agency (“IEA”)’s
Net Zero Emissions (“NZE”) Scenario2.
Batteries remain the most efficient, cost effective
and commercially available route to decarbonise roadtransport, as well as to smooth energy dispatch fromintermittent renewable energy sources. Leading auto
manufacturers have made significant investments inlithium-ion battery technology and are committed toelectrifying their fleets. Chinese EV sales and battery
production data continued to show strong growth
Lithium48%
during the financial year. In the 12 months
toCarbonate
June 2023,
Spodumeneand
Concentrate
Chinese EV sales increased 62% year-on-year;
battery43%
production increased 57% year-on-year.
Demand outside
Concentrate
Revenue to grow; EU and Spodumene
China also continued
US EV
sales
(low
grade)
8%for theby Product12 months to June 2023 rose 20% and
50% Carbonate
respectively.
Lithium

Lithium Carbonate 48%
Spodumene Concentrate
43%

Revenueby ProductSpodumene Concentrate(low grade) 8%
Lithium Carbonate(lower grade recovered
product) 1%
Tantalum <1%

Revenueby End Use

Energy Storage 95%
Industrial 5%(lower grade recovered
product) in
1% line withThe demand outlook for lithium is increasing

Tantalumprojections<1%
these global commitments. Lithium demand
from the IEA aligned with a 1.5-degree scenario (“NZE”)
and announced pledges (“APS”) outline the scale ofthe increase in lithium supply required to achieve thistransition3.

Projected
Lithium
Demandin 2030 Under IEA's
Projected
Lithium
Demandin 2030
Under
IEA's
ClimateDriven Scenarios
ClimateDrivenScenarios
4

Allkem Sustainability Report 2023

Million Tonnes (LCE)

x5.5

12

3

x3.5

2

1

0

2022

2030 (APS)

2030 (NZE)

On 16 December 2022, we refined our portfolio with thedivestment of Borax Argentina S.A. and the acquisition of
the Maria Victoria tenement in the Olaroz basin. Following
the sale of Borax, 100% of Allkem’s assets and businessactivities are now focused on our lithium growth strategy
and aligned with a lower carbon economy.
According to figures reported by the International Energy
Agency, it is estimated5 that for every one tonne of Lithium
Carbonate Equivalent (“LCE”) we produce and sell into
the electric vehicle (“EV”) value chain, we can contributeto a reduction of around 500 tonnes of greenhouse gas
emissions. This impact is expected to grow as EVs are
increasingly powered by electricity grids transitioning
away from fossil fuels towards renewable energy. With
future uptake in recycling of EV batteries that have reachedtheir end of life, our lithium products have the potential
to continue contributing to even further global emissions
reduction beyond their first use.

1 https://www3.weforum.org/docs/WEF_Global_Risks_Report_2023.pdf
2 https://iea.blob.core.windows.net/assets/6d4dda5b-be1b-4011-9dad-49c56cdf69d1/NetZeroRoadmap_AGlobalPathwaytoKeepthe1.5CGoalinReach-2023Update.pdf p.93
3 IEA 2023. https://www.iea.org/data-and-statistics/data-tools/critical-minerals-data-explorer Licence: CC BY 4.0 Market analysis included in our most recent technical reports
reference scenarios developed by Wood Mackenzie that use demand projections in line with the demand scenarios of IEA APS.
4 Wood Mackenzie 2023
5 https://iea.blob.core.windows.net/assets/ffd2a83b-8c30-4e9d-980a-52b6d9a86fdc/TheRoleofCriticalMineralsinCleanEnergyTransitions.pdf p.194 BEV fuel economy BEV battery
40 kWh NMC622. Industry estimate of 0.86kg LCE/kWh.

Producing Lithium Sustainably
Along with the transition towards electric vehicles
and battery storage, we are seeing increased focus onenvironmental, social and governance (“ESG”) impactsof the EV value chain, particularly in relation to criticalminerals such as lithium. Allkem is focussed on continuing
to supply lithium products to our customers withtransparent ESG performance information available
at the facility level.

Strategy Diagram
Allkem’s
Sustainability Strategy aligns our business`activities with our purpose and assists Allkem in creating
long term value. To do this sustainably, we must maintainhealthy ecosystems, look after our people, and listen, learn
and build trust between our company, communities andgovernments in the areas where we operate.

Through membership of local mining associations, ourfacilities in Argentina and Canada are also required toreport against the protocols of the Towards Sustainable
Mining Initiative (“TSM”). With the Argentine Chamberof Mining Entrepreneurs (CAEM), we look forward toparticipating in our first external verification under theTSM program for our Olaroz Lithium Facility in 2024.
When operational, our James Bay mine in Canada will
also report against the TSM protocols through Galaxy
Lithium (Canada) Inc.’s membership of the Québec Mining
Association (“QMA”). During the year we investigatedthe Standard developed by the Initiative for Responsible
Mining Assurance (“IRMA”) to understand the similarities,
differences and gaps against the TSM program
implemented at our Olaroz Lithium Facility.

Community
capacity building

an
m
Hu

Health, safety& wellbeing

Enablers

First Nations &Pueblos Originarios
partnerships

GovernanceRisk management

Diversity &inclusion

al
pit
Ca

Sha
red
Va
lue

We have defined what success looks like for each of theseareas of our strategy and put in place metrics to measure
our progress. Sustainability performance metrics for our
projects and operations in Australia, Argentina and Canada
are available on Allkem’s website and key metrics undergoexternal assurance each year.

Allkem has participated in the United Nations Global
Compact (“UNGC”) since 2018 and supports the UNGC’s
10 Principles and United Nations Sustainable Development
Goals. These Principles are derived from the Universal
Declaration of Human Rights, the International Labour
Organisation’s Declaration on Fundamental Principles
and Rights at Work, the Rio Declaration on Environmentand Development, and the United Nations Convention
Against Corruption.

PurposeRespecting
Human rights
Future readyworkforce

Payment/tax
transparency
Sustainable
Value Chain

Climate change
response
Innovation,
R&D

Tailings, waste& emissions

Land use &biodiversity
Water & resource
efficiency

Renewables &energy efficiency

N a t u r al C a p it a l

Allkem Sustainability Report 2023

Information
security

Allkem produces corematerials fundamental
for decarbonisation

13

14

Allkem Sustainability Report 2023

FY23 Value Creation
FY23 Highlights
This year, Allkem has been included in the S&P Global
Sustainability Yearbook. This means that our Corporate
Sustainability Assessment score is in the top 15% of
the industry.
Allkem Limited
Metals & Mining

Developing our Net Zero Plan
Allkem has a Board approved target of Net Zero for scope
1 and 2 GHG emissions by 2035 and during FY23 wedeveloped our first action plan towards achieving thisgoal. The plan identifies a series of high impact GHG
mitigation projects.

Strengthening transportation safety
At Olaroz and Sal de Vida, we created a new department
focused on managing road safety risks. This department
is implementing improvements in vehicle safety
critical controls, new road safety protocols and training
for road users from our operations, contractors, andlocal communities.

Addressing Human Rights and Modern Slavery risk

Signed just following the end of this reporting period in
July 2023. This is the first IFC financing in lithium mining
and the first time a greenfield mining project's financehas been structures as a sustainability linked and green
loan. This process required extensive external validation of
our high ESG standards against IFC’s globally recognised
environmental and social performance requirements.
We have also committed to sustainability performancemeasures for renewable energy, GHG emissions intensity
and workforce diversity during the operational phase of
the project.

Allkem’s Corporate
Sustainability Assessment scoreis in the top 15% of the industry.

Allkem’s Modern Slavery Working Group, including
representatives of sustainability, procurement andcompliance teams from Australia, Canada and Argentina,
developed Allkem’s group level Modern Slavery Standard.

Strengthening Communications
and Public Affairs
Established Allkem’s Public Affairs Department to support
the business establishing strong stakeholder relationships
to address regulatory measures relevant to the sector.

Allkem Sustainability Report 2023

IFC Sustainability Linked and Green Loan
for Sal de Vida

15

FY23 Value Creation
Our performance against key metrics of our sustainability strategy are highlighted below
demonstrating how we generate value for our stakeholders, which contributes to the longterm sustainability of our business.
Purpose: produce core materials that are fundamental for decarbonisation

Sectors

InputsBusiness Activities

Financial Capital

Financial

See Allkem FY23
Annual Report

US$568.4 m

Group level
functions

Capital expenditure

Human
Shared Value
Payment/tax
transparency
Community capacity
building
First nations & Pueblos
Originarios partnerships

1352

24%

Employees

FemaleLocal community
employees (Mt Cattlin)

71%

Human Capital

Allkem Sustainability Report 2023

16

Natural Capital
Water & resource
efficiency
Tailings, waste& emissions
Land use & biodiversity

Hard RockOperations
Brine
Operations

NaturalHealth, safety& wellbeing
Future ready workforce

Project
Development

48%

Local Province
employees (Olaroz)

Diversity & inclusion

Corporate
Development

494 km2

Land used for
operational activities

1.4 million m3
Total water withdrawal

0%of water fromareas of highwater stressDownstream
Operations andPartnerships
Procurement
Sales andMarketingof Products

Agreements with traditional owners
Olaroz: Olaroz Chico Participation Agreement updated & Easement Agreement signed with El Toro community in FY23
Mt Cattlin: Native Title Claim Wide Mining Agreement with the Wagyl Kaip and Southern Noongar People
James Bay: Preliminary Development Agreement signed with Cree Nation of Eastmain and Cree Nation Government in2019 to be replaced by an Impact Benefit Agreement (“IBA”) before construction initiatedSal de Vida: Informed Consultation and Participation engagement process. Have established relationships of trust andongoing dialogue along with agreements for social investment.

FY23 Outputs and Outcomes
Financial

130,982 dmt

Spodumene concentrate

16,703 t

Lithium carbonate

US$1,207.8 m
Revenue

US$6,773 m
Market capitalisation

Shared

US$186 m
Fees, taxes & royalties paid

US$40 mMt Cattlin water
operational intensity(spodumene concentrate)

42.9 m3/t

Olaroz water operational
intensity (lithium carbonate)

678 t 0
Waste
disposed

Investors

Stakeholders

Customers/
Suppliers

Surfacewaterdischarge

1476 t 0
Waste
recycled

Reportableenvironment
incidents

Communities/
Government/
Regulators

0.4 tCO2e/t

Mt Cattlin GHG operational
intensity (spodumene
concentrate)

US$14 mLocal community
employee salaries

2.8 tCO2e/t

Human

1.98 0.6 0

Fatalities

Employee training hours

Employees &Contractors

Olaroz GHG operational
intensity (lithium carbonate)

197 kt 2.53 Mt
Tailings

Precipitated &harvested salts

Nature/NGOs

Allkem Sustainability Report 2023

Local supplier contracts

50,0001.19 m3/t

Scope 1&2 GHG emissions

US$40 mLTIFR

Natural134,700 tCO2e

Withholding taxes

TRIFR

Stakeholders

17Our Operations
Mt Cattlin
Type

Hardrock

Location

Western Australia

Status

Production

Ownership

100% Allkem

Production of
spodumene concentrate

130,982 t

Record revenue

US$615.6 m

Shared Value
Native Title Claim Wide Mining Agreement in place with
the Wagyl Kaip and Southern Noongar People

US$28.9 m

US$71 m

US$196 K

US$8.7 m

Royalties paid

Community contributions
including ‘Pitch yourproject’ initiatives, local
grants and donations

Taxes and other payments

Paid to local employees
and suppliers

Human Capital

115

22%

48%

7.7

0

718,892

Employees

TRIFR

FemaleFatalities

From local communities

Contractor hours

Natural Capital

54,853 tCO2e
Total scope 1&2
GHG emissions

1.19 m3/dmt

Allkem Sustainability Report 2023

Water use intensity(No fresh water orsurface water used)

180.42 tCO2e/dmt
spodumene concentrate
Scope 1&2 GHG
emissions intensity

197,163 t

Tailings generated

Olaroz
Type

Brine

Location

Jujuy Province, Argentina

StatusStage 1 Production,
Stage 2 Expansion

Ownership

66.5% Allkem

Production oflithium concentrate

16,703 t

Record revenue

US$ 592.2 m

Human Capital

777

20%

71%

1.2 0

Employees

Shared Value
During the year, the Olaroz Chico Participation Agreement
was updated and an Easement Agreement signed with
El Toro community

Royalties paid

US$35.8 m
Export duties Paid

17 ktCO2elithium carbonate

Operational GHG
emissions intensity

Scope 1&2 GHG emissions
from expansion activities

Community contribution~43 m3/t

lithium carbonate
Operational water use
intensity (No fresh wateror surface water used)Toyota Tsusho (TTC)(Japan)6.2%

72.68%(SDJ S.A. 66.6%)

Contractor hours

2.76 tCO2e/t

Scope 1&2 Operational
GHG emissions

US$360 K

Allkem(Australia)

2,406,456

Fatalities

46 ktCO2e

Taxes and other payments (including US$9 million
Corporate Income Tax and US$ 1 million dividend
paid to JEMSE)

Paid to local employees
and suppliers

TRIFR

From local communities

Natural Capital

US$23.7 m

US$42.3 m

Female27.32%(SDJ S.A. 25%)

Sales de Jujuy Pte Ltd(Singapore)

JEMSE(Jujuy, Argentina)
91.5% (Common Share)

8.5% (Class B Share)

Project Company—Sales de Jujuy S.A. (SDJ)(Jujuy, Argentina)
Debt
Lender(Mizuho)

Guarantee
Guarantor(JOGMEC)

Allkem Sustainability Report 2023

US$16.2 m

From Jujuy
Province

39%

19

Our Growth Projects
Naraha | Non-Operated Joint VentureFirst production of lithiumhydroxide was successfully
achieved in late October 2022
utlising technical grade lithium
carbonate from Olaroz.

Type

Lithium Hydroxide
Convervation Facility

Location

Naraha, Japan

Ownership75%

The Naraha Lithium Hydroxide Plant(Naraha) is the first of its kind to be built inJapan and is designed to convert technicalgrade lithium carbonate feedstock from
Olaroz stage 2 into purified battery gradelithium hydroxide. There is strong demand
for this product in the Japanese domestic
market to produce high end batteries.

Allkem Sustainability Report 2023

The scope of sustainability performance data reporting
does not include this project which is managed by our joint
venture partner Toyota Tsusho Corporation (TTC).

20

Sal de Vida
Brine

Location

Catamarca Province,
Argentina—approximately
200km south of Olaroz

StatusConstruction

Ownership

100% Allkem

Product

Lithium carbonate

Shared Value

US$450 K

US$2.2 m

Community contribution Paid to local employees
and suppliers

We have worked with the National University of
Catamarca and the Municipality of Antofagasta de La
Sierra to develop a specific course focused on the skills
required to work in the lithium industry. During theyear, 14 participants from communities around Sal deVida completed the first of three years of study towards
achieving this qualification.

Human Capital

294

23%

12%

60%

1.3

0

Employees

From
Catamarca
Province

FemaleTRIFR

From local communities

Fatalities

1,517,919
Contractor
hours

Natural Capital0

No fresh water orsurface water used

IFC Green andSustainability
Linked Loan

Our sustainability-linked and green loan with the IFC for
Sal de Vida was proposed in October 2022 and signed
just following the end of this reporting period in July 2023.
This is the first IFC financing in lithium mining globally.
This process required extensive external validation of
our high ESG standards throughout the year against
IFC’s globally recognised environmental and social
performance requirements.

Allkem Sustainability Report 2023

Type

21

James Bay
Type

Hardrock

Location

130 east of the CreeNation of Eastmain, afirst nations communityof approximately
833 residents

StatusPermitting and detailed
engineering

Ownership

100% Allkem

Product

Spodumene concentrate

Shared Value

The project is located in category III lands as classified by
the James Bay and Northern Quebec Agreement (JBNQA).
These areas are subject to the laws and regulations ofQuebec regarding the use of public land.

A Preliminary Development Agreement was signed withCree Nation of Eastmain and Cree Nation Government
in 2019 to be replaced by an Impact Benefit Agreement(“IBA”) before construction is initiated.

Human Capital

28

43%

7%

0

0

142,148

Employees

TRIFR

FemaleFatalities

From local communities

Contractor hours (including
hours from Coniagas
rehabilitation project)

Natural Capital

Renewable
electricity

Utilised from Hydro-Quebec

On the 16th January 2023, the Joint Assessment
Committee (JAC) of the Federal Impact Assessment
Agency of Canada and the Cree Nation Government
determined that based on the Environmental Assessment
Report, the project’s environmental mitigation measuresprovide a sustainable path for the project to proceed.

Allkem Sustainability Report 2023

Government of Quebec

22

Cree Nation Government

Impact Assessment
Agency of Canada

Environmental and Social Impact Review Committee(COMEX)

Joint Assessment Committee (JAC)

Approval by Government of Quebec

Approval under JAC 2023

"This is what a good project is all about.
Critical minerals are one of the keys tobuilding Canada's low-carbon economy
and ensuring economic prosperity for
years to come. We can only develop thoseresources by designing from the outset withstrong mitigation measures to protect theenvironment and working in true partnershipwith Indigenous Peoples. Our future depends
on sustainable projects like this one."

Allkem Sustainability Report 2023

The Honourable Steven Guilbeault,
Canadian Minister of Environment and Climate Change

23

Allkem Sustainability Report 2023

Risk and Governance24

Allkem promotes a culture that values trust, cooperation, and mutual respect. Our Board
is a strong advocate of good corporate governance. During the year, we refreshed ourCode of Conduct. This Code brings together key elements of corporate policies, procedures
and standards which collectively clarify Allkem’s vision and the behaviours that areconsistent with our values.

Respect
We foster trusted relationships with ourcollaborators, the different communities,
and our business partners.

Inclusion
We promote a working environment where
everyone is treated with respect anddifferences are celebrated and considered.

Empowerment
We encourage all our collaborators tolive to their fullest potential and to be
proud of the role they play.

Commitment
We keep our promises, reinforcing
our reputation as trustworthy andqualified partners.

Integrity
We are consistent with our corevalues in all our tasks and in ourinteractions with others.

The Code applies to all people working for and with
Allkem, including our contractors and suppliers. Failure
to comply can result in disciplinary action or dismissal.
We have established an Internal Audit function anda Whistleblower Policy and process which requires
notifications to be investigated and reported to the
Audit and Risk Committee.
Through Principle 10 of the United Nations Global
Compact, we have committed to working against
corruption in all its forms. We do not operate in countries
that have the 20 lowest rankings in Transparency
International’s Corruption Index. Our Board approved
Anti-Bribery and Corruption Policy outlines ourcommitment to:•

conducting business activities in accordance with theAllkem Values•

a zero-tolerance approach to bribery and corruption.
Bribery and corruption are never acceptable by or on
behalf of Allkem and we will not tolerate them in ourbusiness or by those we do business with•acting fairly, honestly, openly and in an ethical mannerin all our business dealings and relationships wherever
we operate•

upholding applicable national and international laws
relevant to countering bribery and corruption wherever
we operate•

maintaining accurate and complete books and records
for all financial transactions and to accurate andtransparent financial reporting•

implementing and enforcing effective systems within
Allkem, including mandatory training, to counter the riskof bribery and corruption and to comply with our othercommitments set out above.

Allkem Sustainability Report 2023

Our values

25

Board of Directors

Key Management Personnel

Sustainability
Committee

People andRemuneration
Committee

Nomination and
Government
Committee

Audit and Risk
Management
Committee

Independent
Assurance
External Audit
Internal Audit

Executive Leadership TeamThe ASX Listing Rules require the Company to preparea Corporate Governance Statement each year which
discloses the extent to which the Company has followed
the recommendations contained in the 4th edition of
the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations. Our
FY23 Corporate Governance Statement is available on
our website.

Allkem Sustainability Report 2023

Reflecting the importance of sustainability to the company,
Allkem’s Chief Sustainability and External Affairs Officer
reports directly to the CEO and also engages regularly with
Allkem’s Board Sustainability Committee. This Committee
met three times during FY23 and assists the Board in theeffective discharge of its responsibilities in the areas ofsustainability and in particular: safety, health, environment,
community, climate change and human rights. The Charterof Allkem’s Sustainability Committee, and our other Board
Committees are available on the Company website.

26

Risks, including threats and opportunities identified at thesite level are incorporated in operational risk registers.
Material risks, including those associated with safety,
climate change and human rights are incorporated within
Allkem’s Risk Framework. Allkem’s Board is responsible
for overseeing risk and has assigned accountabilities andresponsibilities for risk management to the Audit and Risk
Management Committee, the Managing Director andexecutive management. Allkem’s Chief Financial Officer isthe custodian of the Risk Management process within theorganisation. The Group risk framework is reviewed at least
annually by the Board Audit and Risk Committee. Key risks
captured in this process are summarised and disclosed inAllkem’s Annual Report.

Links with remuneration
During FY23, 25% of Allkem’s CEO’s allocated short term
incentive (“STI”) performance rights were linked withsustainability focused objectives. These included:•

10%—Improving safety performance. This was linked
to a 6% reduction in total recordable injury frequency
rate (“TRIFR”)•

5%—Finalise Allkem’s Net Zero Action Plan•

10%—maintaining expected carbon emissions intensity
across the group (set at 3.3 tonnes CO2e/tonne oflithium carbonate equivalent (“LCE”)) and successfully
negotiating required agreements with indigenous
communities, including the Impact and Benefits
Agreement with the Cree at the James Bay project andthe revised Olaroz community agreement.

Climate Change Risk
Lithium supply and demand forecasts that Allkem
incorporates in strategic business planning draw on
a range of climate change transition scenarios. These
scenarios are informed by global commitments and actions
including those designed to limit the rise in global warming
temperatures to 1.5°C and avoid the worst effects of climatechange. The clear message from these transition scenarios
is that the world requires substantially more lithium fromboth hard rock and brine sources, as well as recycling, tosupply the increasing demand from electric vehicles.
We assess our assets for physical climate related risks
during planning and approvals processes and continue tomanage risks associated with acute and chronic variationsin climate through operational phases. Within the last
three years, Allkem has completed climate change risk
assessments at the facility level for projects in Argentina
and Canada. These assessments incorporate scenarios forphysical risk based on the Representative Concentration
Pathways (“RCP”) 8.5 and 4.5 as described below. The
Transition scenarios are the International Energy Agency(“IEA”) scenarios reflecting ‘Announced Pledges’ and‘Net Zero by 2050’. These scenarios reflect those that
inform our ongoing market analysis and internal carbon
price values.

Physical Risk Scenarios

Transition Risk Scenarios

RCP 8.5, high-impact scenario

IEA Announced Pledges Scenario (“APS”)—(~2°C aligned scenario)

RCP 4.5, lower impact, intermediate stabilisation scenario
This represents a moderate mitigation scenario aimed atminimising the costs of achieving significant emission reductions.
RCP 4.5 is likely to result in global temperature increases limited
to around 3°C.

This scenario considers climate commitments made bygovernments around the world. The IEA Announced Pledges
Scenario includes projected carbon pricing of USD $135/tonne
CO2 in advanced economies by 2030 and USD $40 tonne CO2
in emerging markets and developing economies7. By 2040 carbon
prices are estimated to reach USD $175. Demand for lithiumincreases by around 5 times compared to 2021 levels by 2030
in this scenario8.
IEA Net Zero Emissions by 2050 Scenario (“NZE”)—(~1.5°C aligned scenario)“Risks associated with large-scale singular events or tipping
points, such as ice sheet instability or ecosystem loss from tropicalforests, transition to high risk between 1.5°C—2.5°C (medium
confidence) and to very high risk between 2.5°C—4°C (lowconfidence)”.6

This scenario presents a pathway to effective climate mitigation
which sees global CO2 emissions reach net zero by 2050. The NZE
scenario includes projected carbon pricing of USD $140/tonne
CO2 in advanced economies by 2030 and USD $90 tonne CO2 inemerging markets and developing economies. By 2040, advanced
economy carbon prices reach USD $2059. This scenario results
in an increase in global temperatures limited to 1.5°C above preindustrial levels by 2100. Demand for lithium increases by around8 times compared to 2021 levels by 2030 in the NZE scenario10.

The focus is now on consolidating our approach to climate
risk assessment consistently for project planning andoperations, supply chain, communities, adaptation andmitigation activities, and investment in R&D, across eachsite, and with Allkem’s Group level Risk Framework.

Allkem’s Group level Risk Framework takes material
risks from site level and corporate risk registers into
consideration and is reviewed at least annually by the
Board Audit and Risk Committee. For risks contained in
the FY23 Group level Risk Framework, we have carried out
further assessment to incorporate potential impacts inthe medium to longer term under various climate change
scenarios. The high-level outcomes of this exercise,bringing together the findings of previous standalone
climate change risk assessments, are summarised in thetable overleaf. This process will form the foundation forfurther integrated consideration of temporal changes inlikelihood and consequence levels as a result of climatechange across our growing business.

Allkem uses an internal carbon price for evaluating risk
and opportunities of long-term investment decisions,
including the development of our Net Zero Action Plan.
We continue to review the most appropriate carbon prices
to implement in planning decisions across different
geographies and timeframes. We consider that (in theabsence of an actual carbon price and guidance in thegeography where we are operating), the projected values
in the IEA APS and NZE Scenarios are appropriate guides.
Based on these considerations, internal carbon prices
implemented for long term planning decisions during
FY23 were based on the following values:•

US$50/ tCO2-e (short term)•

US$100/ tCO2-e (up to 2030)•

US$140/ tCO2-e (2030-2040)•

US$175/ tCO2-e (2040-2050)

6 IPCC 6th Assessment Synthesis Report (March 2023) https://www.ipcc.ch/report/ar6/syr/downloads/report/IPCC_AR6_SYR_LongerReport.pdf p. 77.
7 IEA 2022a Global Energy and Climate Model Documentation, https://iea.blob.core.windows.net/assets/2db1f4ab-85c0-4dd0-9a57-32e542556a49/
GlobalEnergyandClimateModelDocumentation2022.pdf p.20, License: CC BY 4.0
8 IEA 2022b; Critical Minerals Policy Tracker, https://www.iea.org/data-and-statistics/charts/lithium-production-2021-and-projected-demand-in-climate-driven-scenarios-2030,
License: CC BY 4.0 Market analysis included in our most recent technical reports reference scenarios developed by Wood Mackenzie that use demand projections in line with thedemand scenarios of the IEA APS up to 2030.
9 IEA n2
10 IEA n3

Allkem Sustainability Report 2023

This pathway results in global average temperatures likely
to increase beyond 4°C by 2100 relative to pre-industrial
temperatures. Under this scenario, significant changes in thefrequency and intensity of acute and chronic physical risks
occur by mid-century.

27

Description

Impact on surface
and subsurface
water bodies andbrine reserves•

Risk that climate change, combined with inappropriate resource use impacts water sourcesthat supply our sites.

•

This could also present an opportunity when compared with other lithium producers as
Allkem sites are located in areas of lower water risk (including under the RCP8.5 scenario
up to 2030—based on WRI Water Risk Atlas11).

•

Risk that climate change impacts brine reserves and/or evaporation ponds.

•

Risk for brine reserves could also increase due to more companies operating in the samebasins with a low level of coordination in terms of potential environmental impact.

•

Increased temperatures and/or wind could also increase efficiency of brine evaporation ponds.

•

Climate change can lead to more frequent and severe extreme natural disaster weather events,
such as storms, floods and wildfires.

•

These events can disrupt mining operations and projects, damage infrastructure, and disrupt
the transportation of key raw materials, finished products, and project inputs.

•

Can also impact the safety of our communities and workforce.

(Chronic
physical risk)

NaturalDisaster—Major
Environmental
events(Acutephysical risk)

Risk

Risk

Risk/Opportunity

Physical Climate Risks

Description

Lithium productprice risk andmarket changes
in the lithium
industry•

The demand outlook for lithium is increasing in line with global commitments to migrate tolower emissions transport and energy solutions in response to climate change. (Increases byaround 5 times compared to 2021 levels by 2030 in Announced Pledges Scenarios. IEA’s NZE
Scenario projects demand increasing by around 8 times in 2030 compared to 2021 levels.)•

Allkem’s strong lithium development pipeline and vertically integrated production basepositions us well to supply this growing market.

•

Reaching our Net Zero Emissions goal in operational scope 1 and 2 emissions by 2035 will
demand increasing efforts and technology innovation but will also reduce exposure to carbon
prices implemented in different regions.

•

Maintaining/increasing recognition as a low emissions lithium supplier will also present an
opportunity with customers in the EV value chain.

Allkem Sustainability Report 2023

Net Zero Transition(including ESG
regulations
such as carbon
price/tax)

28

11 https://www.wri.org/applications/aqueduct/water-risk-atlas/

Risk/Opportunity

Risk

Opportunity

Transition Climate Change Risk

Human Rights Risk

During the year, we finalised Allkem’s Group level Modern
Slavery Standard. This Standard was developed with input
from Allkem’s Modern Slavery Working Group comprising
representatives from sustainability, procurement, legal
and compliance teams from across the business. Working
group sessions were held with teams from Australia,
Canada, and Argentina to develop and finalise theStandard. The Standard outlines the actions required
across our business to identify risks of modern slavery in
our operations and supply chains and also sets out actions
required to address any risk factors identified throughthis process.

Each operation and project of Allkem and its subsidiaries,
where Allkem has operational control, have responsibility
for implementing this Standard within procurement,
human resources, sustainability, and shared value/community teams. The Standard has four sections:•

Supply chain mapping—Understanding who Allkem’s
key suppliers are, where they are based, what goods orservices they are supplying and from where.

•

Preliminary risk assessment—Assigning each suppliera preliminary risk level based on geographic, sector andentity risk factors. These risk levels are designed withreference to the latest version of the Global Slavery
Index (“GSI”)12.

•

Risk mitigation—Assigning appropriate andproportionate actions based on the outcome of eachrisk assessment.

•

Monitoring and reporting—Monitoring the outcomesof this process, communicating to internal and external
stakeholders, and adapting in order to increase
effectiveness.

The outcomes of the FY23 assessment are included inAllkem’s FY23 Modern Slavery Statement, which will be
published on our website and the Australian Government’s
Modern Slavery Register.
On May 11, 2023, Canada passed An Act to enact Fighting
Against Forced Labour and Child Labour in Supply Chains
Act and to amend the Customs Tariff. This Act which comes
into force in January 2024, will also create Modern Slavery
reporting obligations for Canadian entities. In Argentina,
there is no specific regulation for Modern Slavery
reporting. However, Federal laws regulate the prevention
and punishment of people trafficking and assistance ofvictims and Human rights related to employment arealso strongly regulated, through Federal law andprovincial regulation.

12 The GSI is available online at https://www.walkfree.org/global-slavery-index/. The GSI uses a number of methods to rank each country’s modern slavery risk. Allkem uses thePrevalence Index Rank, which ranks each country by reference to the relative prevalence of modern slavery.

Allkem Sustainability Report 2023

Through adhering to Principles 1 and 2 of the UN Global
Compact, we have committed to supporting andrespecting the protection of internationally proclaimed
human rights and making sure that our company is notcomplicit in human right abuses. Human rights risks within
our operations and supply chain have been assessed inprevious years through a stand-alone human rights risk
assessment. Human Rights risk factors are reassessedannually as part of our Modern Slavery reporting
requirements under the Australian Government Modern
Slavery Act. Our Annual Modern Slavery Statement
is reviewed by the Allkem Board and lodged with theAustralian Government Register.

29

30

Allkem Sustainability Report 2023

FY23
Focus Areas
We regularly engage with our stakeholders to better understand what topics are importantto them and why. We make sure that we understand what the potential is for our businessactivities to impact these topics and if these represent risks that need to be mitigated oropportunities that can be incorporated in our business strategy.

Employees

Communities
andGovernments

Suppliers
Allkem Sustainability Report 2023

Shareholders

Customers

31How we engaged during the year:
Employees—We conducted a group wide survey of our employees during FY23 to better understandviews on sustainability across the business. We also conducted an employee experience survey andculture review.

Customers—During the year we maintained regular engagement with our customers and potential
future customers through meetings, conferences and by responding to specific requests for
information. We have also engaged directly with customer sustainable procurement teams to better
understand expectations relating to transparency of potential environment and social impacts of
our operations.

Suppliers—During the year we communicated Allkem’s updated code of conduct to key suppliers
and incorporated contract clauses outlining our expectations for mitigating risks of modern slavery.
We have also worked with our local suppliers in Argentina carrying out training to enhance involvementin our supply chain.

Allkem Sustainability Report 2023

Shareholders—We maintain ongoing, regular engagement with our shareholders and investor analysts
to increase understanding of our company and provide access to our executive team to respondto any questions. Specific ESG engagement during the year included responding to ESG focusedinvestor surveys such as the CDP (water, climate change and forest), the S&P Global Corporate
Sustainability Assessment (“CSA”), specific ESG investor meetings and responding to direct investor
ESG engagement covering topics including water stewardship, workplace culture, biodiversity, genderequality and diversity.

32

Communities, and Governments—We carry out ongoing engagement with Federal, Provincial, andLocal Governments in Australia, Argentina and Canada to achieve and maintain our project approvals.
We undertook specific engagement in Argentina regarding key regulatory issues such as imports/
exports and transfer pricing to increase mutual understanding of the lithium industry across all levelsof government. We also have regular meetings with local communities to understand and respondto any concerns regarding our projects or operations. The Mt Cattlin Community Consultation Group
meets with senior mine management four times a year. The James Bay project team has undertaken
regular engagement with local community. Topics addressed include the mitigation measure identified
in the conditions of our Federal Government approval of the James Bay project. Multiple interviews
and meetings have been carried out to complete the supplemental social baseline for the Sal de Vida
project for the IFC assessment process. Our Sales de Jujuy Shared Value and Management teams
have also maintained regular engagement activities with local communities surrounding the Olaroz
Lithium Facility.

NGOs—Specific NGO engagement during the year included responding to information requests from
Oxfam’s research for their Recharging Community Consent Report.

Based on what we heard from our stakeholders during theyear, we reviewed our most material topics in our annualmateriality assessment. We validated these topics with the
Executive team and the Board and the outcomes for FY23
are summarised in the following matrix.
What is important to one group of stakeholders may
be different to what is important to others. This matrix
demonstrates that the issues we see as important tomanage for the long-term financial performance of ourcompany are also aligned with those that our external
stakeholders identify as important.

This year we updated some topics to align descriptions
with those identified in our sustainability strategy.
Business continuity, health, safety and wellbeing, climatechange response, first nations partnerships, community
capacity building and product quality remain primary areasof importance for Allkem and our stakeholders.
Changes in priorities include an increased importanceplaced on information security following multiple data
breaches reported by other ASX companies during theyear. We have also increased our focus on sustainablevalue chain as we look to mitigate risk and identify further
opportunities beyond our direct operations.

FY23Materiality
Materiality Matrix
MatrixFY23

Business Continuity, Growth,and Profitability
Water & Resource efficiency
First Nations & Pueblos
Originarios partnerships

Health, Safety &Wellbeing

Human Rights
Climate Change Response

Importance toExternal Stakeholders

Diversity & Inclusion
Land use & Biodiversity
Community Capacity Building
Waste, Emissions &Tailings management

Assurance of Quality& Product Safety
Research, Innovation,
and Development

Business Ethics
Critical Incident
Risk Management

Future Ready Workforce
Contribution to
Public policy
Information Security

Importance to Allkem
Natural Capital

Shared Value

Human Capital

Decarbonisation

Strategic Enablers

Allkem Sustainability Report 2023

Sustainable Value
Chain Management

Payment/Tax
Transparency

33

Our response to each of these material topics can be found in our disclosures as indicated below:
Topic

Description

Business continuity,
growth, and profitability

Our stakeholders, particularly our investors require ourbusiness to be profitable now, and in the long term. The
success of proposed merger and ongoing expansion of ouroperations and projects in critical. This topic is linked tothe effective management of each topic identified below.

Allkem FY23 Annual Report

How we put in place effective standards and systems tomaintain a culture that keeps our workforce safe.

Health Safety and Wellbeing

Health, safety & wellbeing

ChangeResponse

Our Purpose
Our Impact

Health & Safety Policy
Sustainability Performance Data

Climate change response

How we are responding to the recommendations of the
TCFD (now incorporated within the IFRS S2 Standard),
preparing our business for the physical and transitionalrisks and opportunities associated with climate change.

Climate Change andDecarbonisation
Climate Change Risk
Sustainability Performance Data

Assurance of Quality &Product Safety

Our customers have specific requirements to which our
products must adhere. This includes safe packaging,handling, and use of our products.

Sustainability Performance DataFirst nations & Pueblos
Originarios partnerships

Maintaining strong trusted partnerships with local First
nations & Pueblos Originarios communities where ouroperations and projects are located is crucial.

First Nations and Pueblos
Originarios Partnerships

Community capacity
building

Building capacity of local communities helps us to meet
regulatory requirements and maintain our social licence.
Enhancing local workforce and supplier availability is also
important to the success of our business due to the remotenature of our operations.

Local Procurement
Local Employment
Community Contributions
Community Capacity Building
Case Studies
Community and Social
Performance Policy
Sustainability Performance Data

Allkem Sustainability Report 2023

Human rights

34

How we integrate respect for Human Rights across ourbusiness and value chain. As an ASX listed company, theAustralian Government also requires Allkem to submit
an annual Modern Slavery Statement outlining how we
identify and address risk factors for modern slavery.

Human Rights Risk

Water & resource
efficiency

Water management is a key area of interest for the Lithium
industry, and it is important to clarify our risk exposure,while promoting water-use efficiency and protecting
water-related ecosystems.

Water Use

Diversity & inclusion

Diversity is increasingly seen as an asset to listed
entities and a contributor to better overall performance,
particularly in a competitive labour market. Our
stakeholders are interested in how we set targets andimplement actions towards achieving diversity.

Diversity and Inclusion

Human Rights Policy
Modern Slavery Statement

Sustainability Performance Data

Diversity and Inclusion Policy
Sustainability Performance Data

TopicDescription

ChangeResponse

Research, Innovation,
and Development

Investors are increasingly interested in how we will
implement innovative technologies (including direct
lithium extraction (“DLE”) to sustainably grow our lithiumproduction capacity. Further innovation is also required toachieve global net zero targets.

Net Zero Action Plan

Sustainable value chain
management

Working with our suppliers and customers to minimise ESG
risk and identify opportunities in our value chain.

Human Rights Risk

Future Ready Workforce

Local Procurement
Sustainability Performance Data

Future ready workforce

Land use & biodiversity

Waste, emissions &tailings management

We must attract and maintain a growing workforce ofskilled employees to build a strong and successful businessin the long term.

Future Ready Workforce

Our stakeholders are interested in how we identify,
evaluate, and manage the potential environmental impactsof our operations. This is particularly important to securing
approvals and ongoing acceptance of our operations ineach of the regions where we operate. This also includes
closure planning and addressing evolving reporting
approached such as the TNFD and expectations of the IFC
sustainability performance standards.

Land Use and Biodiversity
Management

Reducing waste, implementing a circular economy andmanagement of airborne pollutants (e.g. NOx & Sox) is ofinterest to our stakeholders. Management of tailings is alsomaterial for hard rock mining operations.

Waste and Tailings Management

Sustainability Performance Data

Environmental Policy
Sustainability Performance Data

Climate Change andDecarbonisation
NPI database
Sustainability Performance Data

Business Ethics

Our stakeholders require us to have effective governanceprinciples in place and to act ethically and withtransparency.

Company Policies including
Code of Conduct, Anti-Bribery &Corruption Policy, Information
Security Policy and Whistleblower Policy.

Critical Incident Risk
Management

Our stakeholders are interested in how we effectively
identify and manage potential critical incidents. For
example, COVID-19 pandemic, natural disasters or apotential failure of a tailings storage facility.

Health Safety and Wellbeing
Waste and Tailings Management
Approach
Sustainability Performance Data

Payment/Tax
Transparency

Transparency of shared value generated through tax,
royalty & fee payments in all regions where we operateor pay taxes. Specifically with reference to participation
in EITI in Argentina, ESTMA in Canada and in preparation
for Australian Government public country by country tax
transparency measures.

Tax transparency

Information Security

Increased focus on corporate information security tosafeguard data.

Information Security Policy

Contribution to public
policyThere is an increasing expectation that our company
contributes to public policy in a way that aligns with
our long-term business strategy, particularly in relation
to climate change. Investors also expect transparency
that any industry association memberships or lobbying
activities are aligned with our public policy statements.

Partnerships, Memberships
and Affiliations

Allkem Sustainability Report 2023

Sustainability Performance Data

35

36

Allkem Sustainability Report 2023

Climate Change
and Decarbonisation

Climate Change and Decarbonisation

Governance

Strategy

Risk Management

Metrics and Targets

What are the governanceprocesses, controls andprocedures Allkem uses tomonitor, manage and oversee
climate-related risks andopportunities?

How does Allkem’s businessstrategy respond to climate
related risks and opportunities?

How does Allkem identify,
assess and monitor climate
related risks?

The metrics and targets
developed and implemented
to understand Allkem’s
performance in relation
to climate related risks
and opportunities.

•

Corporate
Governance Statement•

Board Sustainability
Committee Charter•

Climate Change Risk

How are these processes
integrated into and inform
Allkem’s overall risk
management process.
•

FY23 Annual Report p.29•

Investor Presentations•

Our Purpose•

Our Impact•

FY23 Annual Report
p.14,36-38.

•

Climate Change Risk•

Net Zero Action Plan•

Sustainability
Performance Data

Allkem Sustainability Report 2023

Allkem supports the recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”) which havebeen incorporated in the IFRS S2 Climate Related Disclosures Standard. Elements of this Standard are addressed inAllkem’s annual disclosures as identified below:

37

Climate Change and Decarbonisation Strategic Focus

Net Zero Action Plan
Allkem has a Board approved target of Net Zero for
operational scope 1 and 2 GHG emissions by 2035. Ouroriginal Net Zero commitment was made in 2021 withrespect to the Olaroz Stage 1 and Stage 2 developments for
Orocobre. Following completion of the merger with Galaxy
Resources Ltd in August 2021 we expanded the scope ofthe commitment to include all of Allkem’s assets.

Due to Allkem’s planned growth in lithium production,baseline absolute emissions estimates continue toincrease in the short to medium term as new andexpansion projects come online. With no GHG mitigation
measures in place, baseline emissions were estimatedto reach a steady state of approximately 500kt/year(”total annual baseline GHG emissions”).

Based on this expanded commitment, during FY23 wedeveloped our first action plan towards achieving thisgoal. Projected GHG baseline emissions (scope 1 and 2)
were estimated for the period from 2022-204513. Thisbaseline included projected emissions from existing
operations and projects as of the beginning of FY23.

Main operational emissions sources include fossil fueluse for onsite machinery, electricity, and process heatgeneration. Emissions are also associated with reagent use
at our lithium carbonate plants. To provide further context,
the main sources of Allkem’s scope 1 and 2 operationalemissions during FY23 are summarised below:

AllkemFY23
FY23Lithium
LithiumProduction
ProductionOperational
OperationalGHG
GHGEmissions
EmissionsSources
Sources
AllkemDieselTransportation

Reagent Use
CO2 at Olaroz

2%4%DieselElectricity
Generation

Natural Gas
Process Heat
Generation

13%
14%
23%

Natural Gas
Electricity
Generation

44%

DieselOn-siteConsumption*

OlarozMt Cattlin Operations*e.g. haul trucks and mine equipment

Olaroz (Stage 1)
34%/46,100

Allkem Sustainability Report 2023

Allkem FY23
Total Scope 1 & 2
GHG Emissions~135 ktCO2e

38

Olaroz (Stage 2 Expansion)
13%/17,100
Mt Cattlin
41%/54,900
Sal de Vida
12%/16,000

13 Note that these estimates include Olaroz Stage 1, 2 and 3, Sal de Vida 1 and 2,
and James Bay mine. Estimates were made prior to the updated technicalstudies and do not include the Mt Cattlin mine life extension announcement.

Diesel 57%

Allkem FY23
Total Energy Use~2,000 TJ

Natural Gas 43%

A significant outcome of our net zero action plan projectis the development of a Net Zero Analytical Planning Tool.
As we increase our lithium production, we will continue to
use this tool to evaluate the viability of proposed emissions
reduction projects.

Opportunity 2

We have identified a series of preliminary GHG mitigation
opportunities designed to reduce initial projectedbaseline emissions. These opportunities have a total directemissions mitigation potential of approximately 60% when
fully implemented. These projects have focused on proventechnology and are primarily based on transitioning awayfrom fossil fuels for electricity generation on site, as well as
increasing the efficiency of process heat generation.

•

Incorporates increased electricity generation fromsolar PV.

•

Combined heat and power diesel plant to increase
efficiency of required heat generation and further reduce
process emissions.

•

During FY23, this project was in the detailed engineering
stage. Further investigations are being conducted todetermine the feasibility of battery storage systems at
this elevation.14•

Initial estimates are that when fully implemented,
this opportunity could reduce total group level annual
baseline GHG emissions by around 17%. Lower energy
costs associated with PV generation are also estimatedto contribute to annual savings of approximately
US$12 million.

Each of the mitigation and offset opportunities currently
included in our Net Zero Plan, and the estimatedcontribution towards reducing projected annual baseline
emission are outlined below.

Sal de Vida Power Purchase Agreement (“PPA”)
Hybrid Generation Plant—Solar Photovoltaic (“PV”)
and Combined Heat and Power (“CHP”)

Net Zero
Zero Summary
Net
Summary

Opportunity 3
Sal de Vida Natural Gas Supply-46%
Baseline
Emissions

Mitigation
Opportunities

Involves building a 39 km Natural Gas Pipeline to
replace diesel used at the Sal de Vida CHP plant. Natural
gas is a more efficient, cheaper and lower emission fuelthan diesel.

•

This opportunity is in the engineering stage. Further
studies are underway to confirm value, price andschedule.

•

Early estimates are that this opportunity could reduce
annual total baseline emissions by a further 4%. Subject
to detailed engineering, the capital expenditure for theconstruction of the Gas Pipeline is estimated to bearound US$ 31 million. Annual savings in fuel costs are
estimated to be approximately US$10 million.

OffsetOpportunities

Mitigation Opportunities
Opportunity 1

Additional Electrification Opportunities

Olaroz Lithium Facility (Sales de Jujuy) Combined Heatand Power (“CHP”)

Olaroz Lithium Facility (Sales de Jujuy)•

Full commissioning of the heat recovery system at
Olaroz, utilising heat produced by the generation ofelectricity for process heat requirements. This will
reduce the amount of natural gas used per tonne oflithium carbonate produced.

•

This project is now in the commissioning stage.

•

The CHP project is estimated to contribute to potential
annual savings of around US$2.5 million (pre-tax), withcapital expenditure estimated at around US$13 million.
This opportunity has the potential to reduce total annual
baseline GHG emissions by 7-10%, from FY24.

•

Further opportunities to increase renewable electricity
use at the Olaroz Lithium Facility have also been
identified including:–

Options for connecting the Olaroz Lithium Facility to
the electricity grid. This would enable the purchase ofrenewable electricity from existing suppliers–

Installation of electric boilers

These opportunities are in the desktop study phase.
Early estimates for these projects show potential forfurther GHG emissions reductions of around 31% of
the total annual baseline GHG emissions.

14 The initial contract for this power purchase agreement was signed in October 2023, prior to the publication of this report.

Allkem Sustainability Report 2023

-62%

•

39

Offset Opportunities

Ongoing projected emissions estimates will continue to berefined throughout project planning and approvals phases,
and as new technology becomes available. Allkem’s new
projects and expansion projects are being designed
considering the group level net zero target.

We have also identified potential for generating offsetsthat exceed the remaining GHG emissions throughdeveloping an onsite photovoltaic plant. This would
remove the need to purchase electricity from the gridand also create a potential surplus to sell to other usersof the electricity grid.

Scope 3 emissions

Next steps
To reach ambitious global net zero goals, new technology
will be required to address difficult to abate emissions.
We continue to research and monitor the development of
evolving solutions. These include opportunities for further
electrification of mine site machinery to utilise lower
emissions electricity generation. Opportunities to increase
the efficiency of the capture and reuse of process reagentsand associated emissions are also being investigated.

To align our net zero target with the Science Based
Target Initiative, we also need to address our material
scope 3 emissions. We report our scope 3 emissions
for each operation and continue to expand the sources
included in our calculations. Through this investigation
we have identified areas where we can focus efforts toencourage further emissions reduction within our value
chain. The graphs below compare the operational scope
1, 2 and 3 emissions from our hard rock and brine-based
lithium operations. This year, each operation produced
approximately 16kt of LCE.

Spodumene to Lithium Hydroxide—Mt Cattlin Value Chain GHG Emissions (tCO2e)

Spodumene to Lithium Hydroxide—Mt Cattlin Value Chain GHG Emissions (tCO2e)020,000 Cattlin
40,00080,000100,000
Spodumene to Lithium Hydroxide—Mt
Value 60,000
Chain GHG
Emissions(tCO2e)120,000

Purchased Goods
and Services
Purchased Goods
and Services
Upstream ProcessingofFuel and Energy
Upstream Processing of
FuelTransportand Energy
UpstreamofGoods and Services
Upstream Transport ofGoods andServices
Operational
Emissions(Mt Cattlin Scope 1 & 2)
Operational Emissions(Mt Cattlin Scope
1 & 2)
Downstream
Transportof
Spodumene Concentrate
Downstream Transport ofDownstreamof
SpodumeneProcessing
Concentrate
Spodumene Concentrate into
Lithium
Hydroxide
Downstream
Processingof
Spodumene Concentrate into
Lithium Hydroxide

020,0004%
1%40,00060,00080,000100,000

120,000

140,000

160,000

180,000

140,000

160,000

180,000

4%

1%
<1%
<1%

20%
20%

12%
12%

63%
63%

Mt Cattlin Scope 1&2 GHG Emissions

Mt Cattlin Scope 3 GHG Emissions

Mt Cattlin Scope 1&2 GHG Emissions

Mt Cattlin Scope 3 GHG Emissions

Brine
Value
Chain
GHG
Emissions(tCO2e)BrinetotoLithium
LithiumCarbonate—Olaroz
Carbonate—Olaroz
Value
Chain
GHG
Emissions(tCO2e)Allkem Sustainability Report 2023

0
20,00060,00080,000Brine to Lithium Carbonate—Olaroz
Value 40,000
Chain GHG
Emissions(tCO2e)100,000

40

Purchased Goods
and Services
Purchased Goods
and Services
Upstream Processing ofFuel and Energy
Upstream Processing ofFuel and Energy
Upstream Transport ofGoods and Services
Upstream Transport ofGoods and Services
Operational Emissions(Olaroz Scope 1 & 2)
Operational Emissions(Olaroz Scope 1 & 2)
Downstream Transport of
Lithum Carbonate
Downstream Transport of
Lithum Carbonate

020,00040,00060,00080,000

52%
52%

7%
7%
7%
7%
32%
32%
1%
1%

Olaroz Scope 1&2 GHG Emissions

Olaroz Scope 3 Ghg Emissions

Olaroz Scope 1&2 GHG Emissions

Olaroz Scope 3 Ghg Emissions

100,000

120,000

140,000

160,000

180,000

120,000

140,000

160,000

180,000

For our hard rock operations in Australia, the mostsignificant source of scope 3 emissions is from thedownstream processing of spodumene concentrate
products into lithium chemicals. This is an importantconsideration when investigating options for North
American downstream processing in regions withincreased access to renewable energy sources.
For our brine-based operations in Argentina, the mostsignificant sources of scope 3 emissions are from theproduction of reagents used in our evaporation ponds
and plants, particularly lime and soda ash. There areopportunities to work with our suppliers to reduce
emissions associated with the production and deliveryof these reagents. For example, studies have commenced
on the local supply and manufacture of soda ash to meetthe increasing requirements from higher production at
Olaroz and Sal de Vida. Development options are also
being considered for Allkem owned lime properties
in NW Argentina which may lead to further efficiency
improvements.

Climate Change and Decarbonisation
GovernanceAllkem have established a robust governance structure
for the management of climate change-related issues at
the Board level, with the Sustainability Committee having
oversight. Identification and management of climatechange related risks and opportunities is a regular agenda
item at committee meetings.
At the management level, risks and opportunities
associatedwithclimatechange are
the responsibility
Allkem FY23
Lithium
Production
Operational
GHG Emissions Sourcesof the Head of Operations in each of the regions where
we operate,
Diesel along with Allkem’s Chief Sustainability and2%
Transportation
External
Affairs Officer, reporting
directly to the CEO on
these matters.
Reagent Use
CO2 at Olaroz

4%

FY23 Performance—Energy Use andDieselGHG Emissions
13%
Electricity

Generation
Our total
fuel use and scope 1 and 2 greenhouse gas
emissionsfor GasFY23 are summarised below. Over 99% of
Natural14%
Process Heat
these emissions
Generation are classified as direct, Scope 1 emissions.
During FY23, following the completion of feasibility
Scope 2 emissions are currently only associated with
Allkem FY23 Lithium Production Operational GHG Emissions Sources
Natural Gas
studies, we successfully transitioned from sole relianceelectricity
use in our offices. Due to the remote natureof
23%Electricity
on road transport of soda ash to a more sustainable road
Generation
ouroperations,electricity
iscurrently
generatedonsite
and railDiesel
hybrid approach.2%
Some deliveries of the Soda Ash
Transportation
using natural
Diesel gas at the Olaroz Lithium Facility and diesel
are now transported from the Port of Buenos Aires to theOn-sitefuel at the
Mt Cattlin mine. Onsite trucks and machinery atConsumption
Olaroz lithium
facility
usingacombination
of
road
and
rail,
Reagent Use
each
site
also
use diesel fuel.
4% kilometres by trucks andCO2 at Olaroz
significantly
reducing transport
Olaroz*e.g. haul trucks and mine equipment
Mt Cattlin Operations
minimising exposure to transportation risks. This has led
Dieselto operationalreliability of travel
13%
Electricity enhancements relating toGeneration
time, improving our ability to respond to soda ash demand
NaturalThe
Gas new transport approach also resulted
fluctuations.
14%
Process Heatin a 37%Generation
reduction in average GHG emissions associatedOlaroz (Stage 1)
34%/46,100
with the transportation of this raw material to our facility.
Natural Gas
Olaroz (Stage 2 Expansion)
We will Electricity
continue to evaluate new routes and further 23%
13%/17,100
Generation
Allkem FY23
optimisations to achieve the best sustainable transport
Total Scope 1 & 2
Mt Cattlin
practices
throughout our value chain.
Diesel
41%/54,900
GHG Emissions*

OlarozMt Cattlin Operations

To

44%

On-siteConsumption*~135 ktCO2e

Sal de Vida
12%/16,000*e.g. haul trucks and mine equipment

Olaroz (Stage 1)
34%/46,100
Olaroz (Stage 2 Expansion)
13%/17,100
Mt Cattlin
41%/54,900
Sal de Vida
12%/16,000

Diesel 57%

Allkem FY23
Total Energy Use~2,000 TJ

Natural Gas 43%

Allkem Sustainability Report 2023

Allkem FY23
Total Scope 1 & 2
GHG Emissions~135 ktCO2e

41

Operational Emissions
Mt Cattlin Mine
During FY23, we reported total Scope 1 and 2 emissions
for Mt Cattlin of 54,853 tCO2e. Over 99% of these were
Purchased
Goods
and Services
Scope 1 emissions from the diesel fuelused inmining
5%
Mt Cattlin
Scope3
equipment
and forelectricity
generationonsite.
Emissions
Energy Extraction, Production
Emissionsandof
Transportation1%
intensityGHG
in FY23
was 0.42 tCO2e/dmt
spodumene
Downstream
Transportation
concentrate,Sources
up from 0.20 in FY22. This
increase
was dueand Distribution 15%~215kt CO2e
to transitional activities during the year associated with
Processing of Sold Products 79%
the development of the 2NW pit where pre-stripping
mining activities were undertaken. We overcame some
initial challenges during this transition that delayed accessto the main ore body and the production of spodumene
concentrate. However, grade control drilling, increased
equipment size and an additional mining contractor
resulted in significant improvement by the second half ofthe financial year, allowing operations to achieve a steadystate of production.

To calculate a group level, overall emissions intensity
figure, we converted spodumene concentrate to a Lithium
Carbonate Equivalent (“LCE”) using an industry standard
conversion factor of 8. This results in an intensity estimate
3.35 tCO2e/t LCE from Mt Cattlin. This year we have also
recalculated this figure as ‘contained LCE’, incorporating
the average grade and the conversion factor of Li2O to
LCE of 2.473. Using this method, we have incorporated
the ‘contained LCE’ in the low-grade product sold during
the year. This results in an overall emissions intensity
for Mt Cattlin of 2.39 tCO2e/t LCE contained in productsold in FY23.

Renewable electricity generation
Approximately 470 GJ of electricity was generated at
Mt Cattlin’s solar photovoltaic plant during the year. An
independent study is underway to evaluate the businesscase of upgrading the Mt Cattlin power station to include
significant renewable energy and switching the thermal
fuel source to natural gas.

MtCattlin
CattlinGHG
GHGemissions
Emissions(tCO2e)(tCO2e)Mt

54,8533.35
3.18
39,001
2.39

Allkem Sustainability Report 2023

1.61
1.45

42

0.42
0.20
2022
Scope 1 GHG Emissions

2023

Operations Emissions Intensity (tCO2e/tLCE) using '8' Conversion Factor for Spodumene to LCE

Operations Emissions Intensity (tCO2e/tLCE)*

Operations Emissions Intensity (tCO2e/tLCE)**

Operations Emissions Intensity (tCO2e/t Spodumene Concentrate)*Contained Li2O (using % Grade) Converted to LCE using a Factor of 2.473**Contained Li2O (using % Grade) Converted to LCE using a Factor of 2.473—Including Low Grade ProductOlaroz Lithium Facility
This year at the Olaroz Lithium Facility, Stage 1 operation
emissions (Scope 1 and 2) totalled approximately 46,100
tonnes CO2e. Emissions intensity decreased from 3.37 to
2.76 tonnes CO2e/tonne of lithium carbonate produced.
This was due to increased production, improved efficiency
and a lower amount of battery grade product (39%, downfrom 47% in FY22). Reduced rainfall at site during the year
compared with FY22 also contributed by improving brine
concentration.

70,000As
a founding member of the International Lithium
3.37 to define
Association (“ILiA”), Allkem is also working
60,0003.32
3.34
better guidance around LCAs for lithium products withan
initial focus on carbon footprint. With this guidance
50,0002.76
in place, comparisons between LCA’s conducted for
40,000different lithium products will be more meaningful as key
assumptions
around scope, allocation, energy mix and
30,000
data sources will be standardised. We will continue to
20,000
improve LCA estimates in the future, incorporating thisguidance
and further evaluating assumptions made in our
10,000initial LCA.
0

2020

Scope 1 (Stage 1)

2021

2022

Scope 1 (Expansion & Stage 2)

2023
Scope 2

Scope 1+2 Operations (Stage 1) Emissions Intensity (tCO2e/t)

Energy Extraction, Production
and Transportation 10%

Olaroz Scope 3
GHG Emissions

Purchased Goods and Services(soda ash) 7%
Purchased Goods and Services(lime) 70%

Olaroz GHG emissions (tCO2e)
Olaroz GHG Emissions (tCO2e)70,00060,000

3.32

3.34

3.37

50,0002.76

40,000OG30,00020,00010,0000

2020

Scope 1 (Stage 1)

2021

2022

Scope 1 (Expansion & Stage 2)

2023
Scope 2

Scope 1+2 Operations (Stage 1) Emissions Intensity (tCO2e/t)

Olaroz Stage 1
GHG Emissions
Sources~46kt CO2e
Olaroz Scope 3
GHG Emissions
Sources~82kt CO2eNatural Gas (for electricity
generation) 54%
Natural Gas (for processes) 23%
Energy Extraction, Production
and Transportation
10%
Stationary
Diesel 13%
Purchased Goods and Services
Transport(soda ash)Diesel
7% 3%
CO
Purchased
Goods and Services
2 6%(lime) 70%
Upstream Transportation 10%
Downstream Transportation 2%
Disposal and Treatment of Waste
Generated in Operations 1%

Allkem Sustainability Report 2023

During the year, we also completed our first life cycle
assessment (“LCA”) associated with lithium carbonate
produced at the Olaroz Lithium Facility. The objectiveof the study was to estimate the environmental
performance of the life cycle of the production, use andfinal disposal of lithium used in batteries in EVs. Direct
and reliably validated information was used to create an
LCA for the production process. These results were thencomplemented with a theoretical model of the use andpost-consumption stages. The resulting LCA spanned fromraw material acquisition to final battery product disposal(from cradle to grave), capturing key stages in our value
chain. The LCA results provided valuable insights on theenvironmental profile of our lithium carbonate production
process, highlighting the contribution of raw materials andthe importance of sustainable sourcing. The model showed
the contribution of lithium carbonate production in theoverall EV lifecycle was less than 1% of the total global
warming
potential(“GWP”).
Olaroz GHG
Emissions(tCO2e)43

Scope 3 Emissions
During FY23, estimated scope 3 emissions from Mt Cattlin
totalled approximately 215,000 tonnes. The majorityof these emissions are from the downstream processingof spodumene concentrate into lithium hydroxide by
our customers.15
At Olaroz, FY23 scope 3 emissions were estimated to beapproximately 100,000 tonnes with the most significant
sources being the production and transportation ofreagents used in our operations.

Emissions Reduction EnabledWe
estimatethat for every
one tonne of LCE we produce
OlarozGHG16Emissions(tCO2e)
and
sell
into
the
electric
vehicle(“EV”) value chain, we
70,000can contribute to a reduction of around400—600 tonnes
3.37
60,0003.32gas emissions.
3.34 Using these estimates, andofgreenhousethe assumption that 60% of lithium demand in 2023 was
50,0002.76
from the EV value chain, our lithium production in FY23
40,000potentiallyenabled, on average, around 9.9 million tonnesof CO2e reduction on a total lifecycle basis.

30,00020,00010,00002020

Mt Cattlin Scope 3

2021

Purchased Goods and Services
2023
5% 2022

EnergyExtraction,
Production
Scope
1 (Stage
1)
Scope 2
Scope 1 (Expansion& Stage
2)
GHG
Emissionsand Transportation 1%
Scope 1+2Sources
Operations (Stage 1) Emissions
Intensity (tCO2e/t)
Downstream
Transportation
and Distribution 15%~215kt CO2e
Processing of Sold Products 79%

Energy Extraction, Production
and Transportation 10%
Purchased Goods and Services(soda ash) 7%

Olaroz Scope 3
GHG Emissions
Sources~82kt CO2e

Purchased Goods and Services(lime) 70%
Upstream Transportation 10%
Downstream Transportation 2%
Disposal and Treatment of Waste
Generated in Operations 1%

Allkem Sustainability Report 2023

Mt Cattlin GHG Emissions (tCO2e)

39,00115 Scope 3 emissions from downstream processing of our spodumene concentrate intolithium hydroxide by our customers have been estimated using published data from
Argonne National Laboratory in Kellyet.al. (2021).
1.61
16 https://iea.blob.core.windows.net/assets/ffd2a83b-8c30-4e9d-980a1.45
52b6d9a86fdc/TheRoleofCriticalMineralsinCleanEnergyTransitions.pdf p.194 BEV
fuel economy BEV battery 40 kWh NMC622. Industry estimate of 0.86kg LCE/kWh.

44
0.20

O
G

Decarbonisation—Future Focus Metrics and Targets

KPIs

FY23

FY23

FY24

FY28

FY35

Olaroz Lithium Facility

Value

TargetTargetTargetTargetOperational Emissions Intensity
Scope 1+2 (tCO2-e/t)

2.8

3.25

3.25

<3.0

017

Renewable energy (% of processelectricity and heat)

0

0

0

50

100

Mt Cattlin

Value

TargetTargetTargetTargetEmissions Intensity Scope 1+2(tCO2-e/t LCE)

3.35

2.36

3.6

3.6

NA

Sal de Vida

Value

TargetTargetTargetTargetEmissions intensity Scope 1+2(tCO2-e/t)

NA

NA

NA

1.918

019

Renewable energy (% of processelectricity and heat)

0

0

0

4020

70

Value

TargetTargetTargetTarget

NA

NA

NA

0.875

021

James Bay

Emissions intensity (tCO2-e/tLCE)

17 Includes offsets
18 Target linked to IFC funding
19 Includes offsets
20 Target linked to IFC funding
21 Includes offsets

Allkem Sustainability Report 2023

The following short term, intermediate and long-term emissions targets have been designed, considering Allkem’s
projected growth and net zero by 2035 target:

45

46

Allkem Sustainability Report 2023

Human Capital
Although we divested Borax Argentina during the year, overall employee numbers continued
to grow due to our ambitious lithium growth strategy. At the end of FY23, Allkem and ourcontrolled subsidiary companies employed 1352 people based across Australia, Argentina,
Canada and Japan.
Number of employees by location FY23

33

Canada

2

Japan

173

Australia

1144 Argentina

Each of the regions where Allkem operates have regulatory
requirements in place addressing these topics as outlinedin the International Labour Organisation’s (“ILO”)
Fundamental Conventions. 38% of our workforce at
Olaroz and 27% at Sal de Vida are covered by collective
bargaining agreements.

Health Safety and Wellbeing
Strategic Focus
Ensuring that our workforce is supported, safe and healthy
is consistently identified as one of our most material topics
and we are committed to achieving a “zero incident—zeroharm” workplace across the Company. Our Health, Safety
and Wellbeing Strategy has been developed around the
key pillars of Standards, Systems and Culture with anunderlying focus on continuous improvement.

Allkem Policies

HSEMS ManualGroup HSE Standards

Site HSEM Plan

Site Procedures

Allkem Sustainability Report 2023

Through adhering to Principles 3—6 of the UN Global
Compact, we have committed to upholding thefreedom of association and recognising the right tocollective bargaining, and to eliminating forced andcompulsory labour, child labour and discrimination
regarding employment.

47

Governance

Emergency Preparedness and Response

Our Health and Safety Policy and Code of Conduct embed
our commitment to Health and Safety from the Board to
the workforce and illustrate the broad principles governing
our ‘zero harm’ approach.

Allkem has an overarching Emergency Preparedness
and Response Plan (“EPRP”) for our sites which includes
potential emergency scenarios. These scenarios reference
both internal and external risk factors, such as spills,
fires, road accidents, and natural disasters. The EPRP
includes internal and external emergency contacts andcommunication flows and protocols. Each operationand project also have site specific Emergency Response
Management Plans that provide a consistent framework
and authority levels for key decisions. At the group level,
we have also developed a Global Crisis Management Plan.
This plan outlines roles and responsibilities for responseto emergencies that meet a range of defined criteria. The
emergency response in relation to tailings facilities isoutlined in Allkem’s Tailings Management Standard.

Allkem has in place an integrated Health Safety andEnvironment (“HSE”) Management System aligned
to ISO45001 Health and Safety Management System
Standard and ISO14001 Environmental Management
System Standard. The system is captured in our Health,
Safety and Environment Management System Manualand defines the framework within which we manage
our operations and set the minimum standards ofperformance across the group. Our HSE Management
System applies equally to employees and contractors
across all operations, project sites and offices. Local
communities and other relevant stakeholders are also
consulted with regard to any plans and activities that
may affect them.
We set lead and lag performance metrics for Healthand Safety, including the reporting and investigation of
Significant Potential Incidents (“SPI”). SPIs are incidents
which have the potential to seriously injure or kill a person.
Root-cause investigations for each SPI are approved bysenior management and the action status tracked toensure every ‘near-miss’ remains only that.
Health and Safety Key Performance Indicators areembedded into objectives from the CEO down andreported on at a weekly (operational) and monthly(executive) level. Extracts of performance are reported on
at every Board Meeting and in a detailed agenda item in
Sustainability Committee meetings. Objectives and targets
are reviewed annually. The appointed Executive Lead foreach Operation or Project is accountable for Health and
Safety performance within their jurisdiction. Governanceis provided by the Corporate Director for Health, Safety
and Security who reports directly to Allkem’s Chief
Sustainability and External Affairs Officer.

FY23 Performance
At the group level, Allkem achieved an improved safety
performance during FY23 reflecting a reduced numberof safety incidents across both Mt Cattlin and Olaroz.
We also maintained zero fatalities across all operations
and projects.
As our group level hours (including employees andcontractors) have increased significantly in the past two
years, our overall total recorded injury frequency rate(“TRIFR”) has continued to reduce.22
We maintained our focus on reporting SPIs which areincidents with the potential to seriously injure or killa person. During the year we completed root-cause
investigations for each of these SPIs as shown below.23
Strategic improvement programs during the year focusedon Crisis and Emergency Management and Critical Control
Management. A Behavioural Based Safety program wasinitiated at Olaroz and Sal de Vida to increase active
participation in the detection and correction of potential
safety incidents.

Combined Historic TRIFR
Combined Historic TRIFR
9

5.50

5.44

5.30

8
7

48

Million Hours

Allkem Sustainability Report 2023

6
5

2.86

4

2.61
1.98

3
2
1
0
FY18
Hours

FY19

FY20

FY21

FY22

FY23

TRIFR

22 Historic calculations include Mt Cattlin, Olaroz, Sal de Vida and Corporate. Borax data is included up to the point of sale. James Bay project is also included in FY23.
23 SPIs include Mt Cattlin, Olaroz, Sal de Vida and James Bay. Borax data is included up to the point of sale. Coniagas (an historic site rehabilitation project) is also included.

SignificantPotential
PotentialIncidents
Incidents
FY23
Significant
FY23
6
5
4
3
2
1
0

Jul 22
SdJ

Aug 22

Sep 22

Mt Cattlin

SdV

Oct 22

Nov 22Borax

Dec 22

Coniagas

Jan 23

Feb 23

Mar 23

Apr 23

May 23

Jun 23James Bay

Total Recordable Injury Frequency Rate (“TRIFR”) and Lost Time Injury Frequency Rates (“LTIFR”) for each site, including
employees and contractors is shown below:
Mt Cattlin(Operation)

Olaroz(Operation andexpansion)

Sal de Vida
(Project)

James Bay
(Project)

TRIFR(total)

7.7

1.2

1.3

0

1.98

TRIFR
(employees)

10.5

1.2

0

0

1.5

TRIFR
(Contractors)

7.0

1.2

2.0

0

2.3

LTIFR (total)

0

0.5

1.3

0

0.6

LTIFR
(Employees)

0

0.6

0

0

0.3

LTIFR
(Contractors)

0

0.4

2.0

0

0.8

A detailed breakdown of safety performance metrics for
employees and contractors at each site is included inAllkem’s annual Sustainability Performance Data.

Mt Cattlin
There were no lost time incidents during FY23 at
Mt Cattlin, and the rolling 12-month TRIFR of 7.7
represents a 34% improvement compared to FY22.
The improved safety performance is attributed to theincrease in implementation of proactive safety observation
procedures. These include the Field Critical Control Check(“FCCC”) observations, to enhance the existing CriticalControl Management Program.

Allkem Total

OlarozHealth and safety performance at Olaroz Lithium Facility
also improved in FY23 with a TRIFR of 1.2 and LTIFR of
0.49. This was attributed to the rollout of critical standards
and focus on increasing behaviour observations.
During FY23 we have increased our focus ontransportation safety. At Olaroz and Sal de Vida, we createda specific department to better identify, manage andcontrol road safety risks. This department is focusing on
implementing improvements in vehicle safety criticalcontrols and driver specific training. These initiatives
will have a broad focus, including all road users from ouroperations, contractors, and local communities.

Allkem Sustainability Report 2023

FY23

49

Sal de Vida

FY23 Performance

Sal de Vida recorded a TRIFR and LTIFR of 1.3 in FY23.
There was a significant increase in contractor working
hours at Sal de Vida during FY23 due to increased
construction activities. Health and Safety teams
completed the implementation of risk identification andoperating procedures, in alignment with Allkem Group
Standards. Safety training was completed for employees
and contractors covering working at high elevation,and first aid training including CPR. The annual flu
vaccination campaign was carried out covering 696
employees and contractors.

Gender diversity

James BayAt James Bay, the team successfully implemented HSEprocedures in alignment with Allkem Group Standards andCanadian permit commitments. This included contractor
management, project design and risk analysis. The teamcompleted exploration activities and establishment ofPhase 1 for the mine temporary camp with a strong focus
on safety first, recording zero safety incidents.

Diversity and Inclusion
Strategic Focus
Developing a diverse, skilled, engaged, and productive
workforce is essential for contributing to the long-termvalue of our business. At Allkem, we are proud to work
across a diverse range of locations, with a workforce thatvalues and reflects the cultures of each of the areas where
we operate. Differences in age, race, gender, nationality,
region of origin, culture, sexual orientation, physicalabilities, and thinking styles enrich the organisationand management approach.

Allkem Sustainability Report 2023

Governance

50

Allkem’s Chief Human Resources Officer oversees thedevelopment and implementation of our Diversity andInclusion Strategy within the business. This is done
through Human Resources Departments in each region
where we operate. Our commitment is outlined inAllkem’s Diversity and Inclusion Policy. Allkem’s Board
level People and Remuneration Committee oversees
our strategy to achieve diversity targets for employees.
Allkem’s Chief Sustainability and External Affairs Officer
oversees the development of strategy for inclusionof local and indigenous communities. This strategy isimplemented by our Shared Value and Community teams
at each operation and advanced project. This approach isoutlined in Allkem’s Community and Social Performance
Policy. Allkem’s Board Sustainability Committee oversees
strategy for building shared value with local communities
including local employment. The Nomination and
Governance Committee oversees target setting andstrategy to achieve Board diversity as outlined in our
Corporate Governance Statement.

Proportion of women at the end of FY23:

25%

20%

24%

Allkem Board
Directors

Allkem Senior
Executive

Total Employees

In Argentina, where the average participation rate offemales in the mining sector was only 10% in 202224, weare focused on maintaining significantly higher female
representation across our operations and projects. During
the year, we formalised this commitment for the Sal deVida project, linking our IFC financing to sustainability
targets which include achieving at least 26% women
employees at the project by 2030.
Initiatives in place to support this at our sites in Argentina
include subsidised daycare for working parents. At allof our sites we offer extended family leave and flexible
work, including hybrid arrangements in some cases for
returning parents.
The percentage of female employees at both Olaroz and
Mt Cattlin remained steady from FY22 to FY23 as we
increased the size of our workforce. For our projects, thenumber of females employed at Sal de Vida increased from52 to 68, while the percentage decreased slightly from
25% to 23%. Although we are focused on measures thatencourage the entry and long-term retention of women,
we expect that the percentage of women will be impacted
during construction and the early stages of operations.
At James Bay, where we are still finalising the approvals
process and construction is yet to commence, thepercentage of female employees increased significantly
from 30% up to 43% of the James Bay project team.
Gender diversity at each of our operations and projects
is shown in the charts below.

24 Source: CAEM—Cámara Argentina de Empresas Mineras (Argentine chamber of mining companies) https://www.caem.com.ar/genero-e-inclusion/Mt Cattlin
Mt Cattlin

Sal deSal
Vida
de VidaMale 78%/90
Male 78%/90
FemaleFemale
22%/2522%/25

Male 77%/226
Male 77%/226
FemaleFemale
23%/6823%/68

Sales Salesde Jujuy
de Jujuy(Olaroz(Olaroz
Lithium
Lithium
Facility)
Facility)

JamesJames
Bay Bay

Male 80%/619
Male 80%/619
FemaleFemale
20%/158
20%/158

Male 57%/16
Male 57%/16
FemaleFemale
43%/1243%/12

Cultural Diversity

Local
Local 48%/55
48%/55

Mt Cattlin

Provincial 50%/58
50%/58Provincial
National
National 2%/2
2%/2

the unique cultures across the areas where we operate inArgentina, Australia and Canada. The distribution of local
employees for each operation and project during FY23 isshown below. Further information about these initiatives
is included in the Shared Value section of this report.

Sales de Jujuy(Olaroz Lithium
Facility)

Provincial
Provincial 60%/177
60%/177
National
National 28%/83
28%/83

Allkem Group Employees

National
National 28%/221
28%/221
International
International 1%/7
1%/7

Local
Local 7%/2
7%/2

Local
Local 12%/34
12%/34

Sal de Vida

Local
Local 39%/304
39%/304
Provincial
Provincial 32%/245
32%/245

James Bay

Provincial
Provincial 89%/25
89%/25National
National 4%/1
4%/1

Allkem Sustainability Report 2023

Our workforce diversity is also enriched by the number ofpeople from our local communities working on our sites.
We are focused on developing a strong and engaged local
workforce at each of our operations and projects. At thebroader group level, we learn from and celebrate each of51

Future Ready Workforce

GovernanceAt each of our global locations, we have Human Resource
Leaders in place who report to Allkem’s Chief Human
Resources Officer. Our Chief Human Resources Officer
is responsible for our workforce talent development andtraining strategy within the business. Allkem’s Board
level People and Remuneration Committee oversees thisstrategy and performance outcomes.

Strategic Focus
The unprecedented growth in demand for lithium is also
being met with an unprecedented demand for skilledworkers in the lithium industry. Within our workforce,
we have team members with valuable experience acrossbrine and hard rock lithium projects. Our portfolio of
projects across Australia, Canada and Argentina offers
our employees exciting career opportunities, sharing
knowledge between our active operations
across our
Localand
48%/55development
pipeline.
Most
importantly,
ourpeopleknow
Provincial 50%/58
Mt Cattlinthat they are contributing to part of theNational
Net Zerosolution,2%/2bringing quality lithium products into the market, in asustainable way, that enables global decarbonisation.

FY23 Performance
39%/304in the
The availability and retention of skilledLocal
personnel
Sales de Jujuy
Provincial
32%/245
current market(Olaroz remains
Lithium highly competitive. Voluntary
National 28%/221
turnover reduced
across both operations in FY23, while atFacility)
International 1%/7
our growth projects, there was an increase.
Despite this,we continued to grow across each operation and project
and at the corporate level during the year.

Effectively attracting, training and retaining employeeswith the required skillsets to implement our businessstrategy is a key focus for our company. We have developed
an approach to retaining key personnel and attracting
talent that includes employee development programs,
ensuring a diverse and inclusive work environment
and a focus on hiring and developing talent from local
communities. Allkem provides competitive and fair total
Local 12%/34
remuneration packages, a safe inclusive workplace andProvincial 60%/177
Sal de Vida
a commitment to strong corporate values.

Voluntary turnover
Mt Cattlin

Olaroz (Sales de Jujuy)

39% 30%5.7% 3.9%

James Bay
James BaySal deProvincial
Vida 89%/25

10% 10.3%

7.1% 13.6%

FY22

FY23

FY22

FY23

Local 7%/2

National 28%/83

The management of talent is core to Allkem’s success andis a key priority for management and the board.

FY22

National 4%/1

FY23

FY22

FY23

Allkem Group Employees

Allkem Group Employees

777
800
628
600

400

294
138

200
70

211
95

115
20

28

0

Allkem Sustainability Report 2023

Allkem Corporate

52

Mt Cattlin

Olaroz(Sales de Jujuy)

2022

2023

Sal de Vida

James Bay

We have made a significant investment in training during
FY23 with nearly 50,000 training hours recorded acrossthe business.25 Training covered areas such as our new
Code of Conduct, Diversity, Inclusion & Respectful
Behaviours, Leadership courses for managers as wellas role specific, technical training.
With over 400 new hires during the year in Argentina,
we have increased our focus on leadership training tobuild and maintain strong teams. 406 employees fromJujuy, Catamarca and Buenos Aires participated in the
Leadership Academy program. The program focuses ondeveloping tools and skills that leaders can draw upon to
inspire their teams to achieve organisational objectives.
The program includes all employees at different levels of
leadership from supervisors to managers and directors.
In November 2022, 849 employees participated in our
second employee experience survey following the merger
between Galaxy and Orocobre. 82% of our employees

across Argentina, Australia and Canada completed thesurvey, an increase of 6% compared with the previous year.
The overall positive perception of our workplace was 60%,
down from 66% recorded in the FY22 employee survey.
This survey showed that across the business, we feel mostpositive about our values and company culture. The area
identified as in need of most improvement was internal
communication.
In response to the feedback received in the survey,
Allkem’s Human Resources, Communications and IT
teams have successfully rolled out a companywide
intranet during the year to improve the way that weshare information across our global organisation. We
also increased the % of employees who received formal
performance evaluation from 87% to 91%.
See performance data for detailed breakdown of employee
turnover, new hires and training metrics.

Human Capital Future Focus Metrics and Targets

Objective

TargetStatus as at 30 June 2023

1. Proportion of women Directors

30% by the end of FY2023

25%

2. Proportion of women employed in Senior Executive positions≥30% by the end of FY2025

20%

3. Proportion of women emplyed across the Allkem Group (including
Australia, Argentina and Canada)≥25% by the end of FY2025

24%

In light of the proposed merger between the Company and Livent Corporation (announced to the market on 10 May 2023),
the Board will not be making any further changes to its composition until shareholders have had the opportunity to vote on
the merger proposal. The composition of the Board of the merged entity, including female directors, will be set out in the
Scheme Booklet to be sent to shareholders in connection with the Scheme Meeting (currently anticipated to be held aroundthe end of calendar year 2023).

25 This figure does not include Mt Cattlin where this figure was not reported for FY23.

Allkem Sustainability Report 2023

The following measurable objectives for gender diversity are included in Allkem’s FY23 Corporate Governance Statement.
At the group level, Senior Executives are defined as a person who is a member of our Executive Management Team thatreports directly to the Managing Director.

53

At each of our operations and projects, the following targets are in place for human capital. For these targets,
women Executive Positions include women employed as Managers or Directors.
KPIs

FY23

FY23

FY24

FY28

FY35

Mt Cattlin

Value

TargetTargetTargetTarget

TRIFR

7.7

8

8

5

NA

LTIFR

0

2.5

2

1

NA

Women in Executive Positions (%)

17

12

20

25

NA

Women in total workforce (%)

22

25

25

25

NA

Value

TargetTargetTargetTarget

TRIFR

1.2

2.6

2.3

1

0.5

LTIFR

0.5

1.0

0.8

0.3

0

Women in Executive Positions (%)

21

25

26

30

>30

Women in total workforce (%)

20

20

23

30

>30

Voluntary turnover (%)

3.9

5.2

5

5

5

Value

TargetTargetTargetTarget

TRIFR

1.3

2.9

2.9

1

0.5

LTIFR

1.3

1.5

1.5

0.3

0

Women in Executive Positions (%)

25

23

23

>25

>35

Women in total workforce (%)

23

12

12

2226

26

Voluntary Turnover (%)

13.6

<6

<6

<10

<10

Value YTD

TargetTargetTargetTarget

TRIFR

0

6

6

5

2

LTIFR

0

2

2

1

0

Women in Executive Positions (%)

36

40

40

>30

TBD

Women in total workforce (%)27

43

15

15

10

TBD

Olaroz—Sales de Jujuy

Sal de Vida

Allkem Sustainability Report 2023

James Bay

54

26 Linked with IFC commitment
27 The reduced targets correspond with the beginning of construction and early-stage operation at James Bay

Allkem Sustainability Report 2023

Natural Capital

55

Environmental inputs and outputs for brine-based lithium operation:
Environmental inputs
Environmental
inputsandandoutputs
outputsfor
forbrine-basedbrine-basedlithium
lithiumoperation:
operation
Water and Brine
EnergyReagents

Emissions

Water
Brinefrom wells in
Brine isandextracted

Emissions
There are four main GHG emissions

EnergyEnergy is generated by theReagentslime, soda
Includingnatural gas generators to power ash, HCL and CO2
Energy is generated by the
Including lime, soda
processes in the production
are incorporated innatural gas generators to power ash, HCL and CO2plant and provide electricity forthe process toprocesses in the production
are incorporated in
the camp.
remove impurities
plant and provide electricity forthe process toandcrystalise andDieselis used on site forthe camp.
remove impurities
purifyLithium
machinery and transport ﬂeet.
and crystalise andDiesel is used on site for
Carbonate product.
purify Lithiummachineryand solartransport
ﬂeet.
DirectenergyCarbonate product.
is utilised to
Direct solar energy
concentratebrine inis utilised to ponds.
evaporation
concentrate brine inevaporation
Through our ponds.
Net Zero plan,
we are increasing renewable
Throughour Netgeneration.
Zero plan,solarelectricity
we are increasing renewablesolar electricity generation.

the salt lake (salar) and pumped
Brine is extracted from wells into large scale evaporation ponds.
the salt lake (salar) and pumped
The
operations
require ponds.
to large
scale evaporationindustrial water (non potable*
The operations require
groundwater), which is extracted
industrial water (non potable*
and treated to be used ingroundwater), which is extracted
processing. Water is returned
and treated to be used into the evaporation ponds after
processing. Water is returned
processing to recover residual
to the evaporation ponds after
lithium. There are no operational
processing to recover residual
discharges to the environment.
lithium. There are no operational* Low quality water
discharges
to theenvironment.
as definedby*

ICMM water quality categories.
Brine
has a salt
concentration
Low quality
water
as defined byof
~330g/L(seaquality
watercategories.
has 36g/L) andICMM wateris
not hasconsidereda water resource.
Brinea salt concentrationof~330g/L (sea water has 36g/L) andis not considered a water resource.

1
1
Brine
extraction
Brine
extraction

sources from our brine operations:
There are fourmain GHG
emissionsElectricity
generation,
processheatsources fromdiesel
our brine
generation,
usedoperations:in onsite
Electricity generation,
process
machinery,and emissions
fromheatuse
generation,ofreagents. diesel used in onsite
machinery, and emissions from use
Harvestedof reagents.Salts
Mainly sodium chloride (NaCl) andHarvested Salts
magnesium hydroxide (Mg(OH)2)
Mainly sodium chloride (NaCl) and
Product
magnesium hydroxide (Mg(OH)2)
Lithium Carbonate (Li2CO3)
Product
Lithium Carbonate (Li2CO3)Emissions within
our operation
Emissions within
our operation

Emissions in ourvalue chain
Emissions in ourvalue chain

1
1

2
2
Industrial
water
extraction
Industrial water
extraction Energy used totreat water for
production.
Energy used totreat water for
production.

Solar evaporation ponds
Solar evaporation ponds2

By contributing to a
supply chain thatenables
the transition
By contributing
to atocleanchain
energysupplythat
alternatives,potential
enables the transition
futureemissions
to cleanenergy canbereduced.
alternatives, potential
future emissions canbe reduced.

2
3

Thermal energy iscaptured andreusedThermalwhereverenergy ispossible
capturedthroughandheat
exchangers.
reusedwhereverpossible throughheat exchangers.

3
4
4

Allkem Sustainability Report 2023

Environmental inputs and outputs for hard rock lithiun operation

56

Water

EnergyEmissions

Water
Groundwaterfrom bore field,
decant return line from in pit
Groundwater from bore field,
tailings storage facility (TSF)
decant return line from in pit
and rainwater tanks.
tailings storage facility (TSF)
Raw
water is sourced
and rainwatertanks. fromwater bores and piped to
Raw water is sourced fromeither the raw water dam to bewater bores and piped toused in the processing plant;
either the raw water dam to beor for use in dust suppression
used in the processing plant;in the mining operation.
or for use in dust suppression
Somerainwater(<350m3) isin the mining
operation.
captured and primarily used
Some rainwater (<350m3) isfor the drill rigs.
captured and primarily used
for the drill rigs.

EnergyDiesel for electricity generation andEmissions
Withinoperations from diesel use.

transport fleet/plant/machinery.
Diesel for electricity generation andEnergyused
to treat water in reverse
transport
fleet/plant/machinery.
osmosis plant for human consumption.
Energy used to treat water in reverse
osmosis plant
humanJamesforBay
to beconsumption.
connected
to grid electricity sourced
James Bay to be connectedfrom hydro power.
to grid electricity sourced
from hydro power.

Emissionsin our value
Within operations
fromchain—diesel use.
transportation and processing of product.
Emissions in our value chain—Enduse of productbattery storage
enablestransportationand inprocessingof product.
reduction in emissions when used in electric
End use of product in battery storage enables
vehicles, transitioning away from internal
reduction in emissions when used in electric
combustion engine.
vehicles, transitioning away from internal
Tailings
combustion engine.
Process tailings are stored on site in-pit TSF
Tailings
Product
Process tailings are stored on site in-pit TSF
Spodumene concentrate
Product
Spodumene concentrate
Emissions in our value chain
Emissions in our value chain

Energy used totreat water for
production.
Energy used totreat water for
production.

By contributing to a supply chain thatenables the transition to clean energy
alternatives,potential
futureBy contributing
to a supply
chain thatemissionscanbe reduced.
enables thetransition
to clean energy
alternatives, potential future
emissions can be reduced.
Raw Water Dam

Tailings Dam

Raw Water Dam

Tailings Dam

Land Use and Biodiversity
Management
Strategic Focus
Through adherence to Principles 7 and 8 of the United
Nations Global Compact we support a precautionary
approach to environmental challenges and commit toundertaking initiatives to promote greater environmental
responsibility.
The International Sustainability Standards Board(“ISSB”) has signalled28 that it will be drawing on therecommendations of the Taskforce on Nature Related
Financial Disclosures (“TNFD”)29 in future standards
to meet the information need of investors. We aremonitoring these developments and working to alignour current disclosures with these recommendations.
We also align our reporting with the Towards Sustainable
Mining (“TSM”) Protocols, including the TSM Biodiversity
Conservation Framework. Our Olaroz Lithium Facility inArgentina and James Bay in Canada (when operating) are
required to report and be audited against these protocols.
Our first site based TSM audit will be at the Olaroz Lithium
Facility during 2024.

For each stage of the project, as part of the approvals
process, potential environmental impacts are identified,and mitigation measures put in place, with involvementfrom local communities and State Government
departments. For each permit that is required to operate,
Allkem submits annual Environmental Reports to therelevant government agencies to ensure compliance.
Progressive rehabilitation is undertaken during each
Autumn/Winter planting season. Annual rehabilitation
monitoring is conducted on site and a detailed Closure
Cost Estimate (“CCE”) is completed annually and reported
in Allkem’s annual accounts. Each year, Allkem is also
required to pay a per hectare unit rate for land disturbanceas part of the Western Australian Government’s
Rehabilitation Fund Regulations 2012. A mining proposal
to support expansion activities has been submitted to
the relevant State authorities including a revised mineclosure plan.

Every Allkem site undergoes assessments of biodiversity
impacts and risks through the Environmental and Social
Impact Assessment requirements of the regions where
we operate. None of our operations or development sites
are located in UNESCO world heritage sites, biospherereserves or Ramsar sites. The location, description andenvironmental approvals requirements for each of ouroperations and projects are summarised below.

Mt Cattlin

28 https://www.ifrs.org/news-and-events/news/2023/09/
issb-congratulates-tnfd-on-finalised-recommendations/
29 https://tnfd.global/recommendations-of-the-tnfd/

Allkem Sustainability Report 2023

The Mt Cattlin site is positioned in south-western,
Western Australia near the town of Ravensthorpe, andapproximately 40km inland from the coastal townof Hopetoun. The site of the mine is in a region ofpreviously cleared agricultural land. Any further clearingof remnant vegetation is undertaken with permits fromthe State Government. There are no Threatened Flora,
Threatened Ecological Communities or Priority EcologicalCommunities recorded on the site. Areas outside thesite to the north and east do provide some valuableremnant habitat.

57

Olaroz
Allkem’s Olaroz Lithium Facility is located at an elevation of
approximately 3900m in the Jujuy Province of Argentina.
The site is within the Olaroz Cauchari Flora and Fauna
Reserve. This reserve was created in 1981 with the primary
goal of protecting the vicuña (Vicugna vicugna) species.
Vicuñas are native to the Puna, and are found in Peru,
north-western Argentina, Bolivia, and northern Chile.
The reserve is designated as a multi-use area in which
agricultural, mining, and scientific technical research
programs are permissible.

Allkem Sustainability Report 2023

Prior to any work beginning at the site, an Environmental
Impact Report was developed and approved. This included
extensive baseline studies of flora, fauna, hydrogeology,hydrology, climate, air quality, noise and ecosystemcharacterisation. Baseline assessments must be updated,submitted and approved by the relevant Provincial
authorities every two years. Monitoring is conducted inpartnership with local community representatives so that
any impacts from our operation on ecosystem health canbe measured, evaluated, communicated and addressed.

58

Sal de Vida

Two major perennial streams feed the Salar del Hombre
Muerto from the south, the Los Patos River and theTrapiche River. Vegetation in the region is sparse,reflecting the high-altitude desert environment. Thereis no vegetation on the salar itself. The project has been
designed to avoid areas of higher biodiversity value, suchas wetlands, and vegetated areas. A system of culverts isplanned to maintain water flow from the Los Patos Riverto support ecological processes.
Assessments of potential environmental impacts havebeen undertaken from the initial exploratory drillingthrough to the implementation of the Project. An
Environmental Impact Assessment identified potential
impacts and mitigation actions and has been approvedby the Catamarca Provincial Government. This approval
governs the activities permitted on the site and must be
updated every two years.
As part of the IFC funding due diligence, additional
audits were carried out against the IFC’s performancestandards on Environmental and Social Sustainability.
All documentation relating to these audits and theEnvironmental Impact Assessments isavailable on the IFC project website.

James BayThe James Bay site is located in Northwestern Québec,approximately 130km east of the Cree Nation communityof Eastmain and 382km north of the community ofMatagami. The area consists of terrestrial environments
and wetlands characterised as having long cold wintersand short warm summers. Temperatures in winterrange from 5°C to below -45°C, with significant snow
cover. Temperatures range from approximately 15°C to
35°C during the summer months. During dry summer
periods, forest fires are common in the region. The
Project is accessible year-round via the paved BillyDiamond Highway.
The mining industry in Québec is subject to both federal
and provincial laws and regulations. In addition, the Project
is located within the territory governed by the James
Bay and Northern Québec Agreement (“JBNQA”). The
Federal impact assessment, finalised in January 2023,
was conducted by a Joint Assessment Committee (“JAC”),
composed of representatives appointed by the CreeNation Government (“CNG”) and the Federal Government
Agency. Wildlife and vegetation inventories as well as fishsampling have been conducted over the project area.
Likely impacts from the project and appropriate mitigation
measures have been identified in partnership with thefederal and provincial government, the Cree Nationand local communities. Environment and Social Impact
Assessment (“ESIA”) documents including the conditionsof the Federal Government approval are available on the
Canadian Impact Assessment Agency Project website andthe Allkem Project website.
Allkem Sustainability Report 2023

The Sal de Vida project site is located at approximately
4000m elevation within the basin of the Salar del Hombre
Muerto, in Catamarca Province, Argentina. The projectsite is situated within a Key Biodiversity Area (“KBA”),
which is also an Important Bird and Biodiversity Area(“IBA”). The status of the region as a KBA is based on theInternational Union for Conservation of Nature (“IUCN”)
Global Standard for the Identification of Key Biodiversity
Areas. The trigger for KBA classification was the presenceof critical habitat for the Andean Flamingo and the Horned
Coot that have both been documented in the region.

59Governance
Our Group level, Board approved Environmental Policy
includes provisions regarding efficient use of energy,
water and land, participatory environmental monitoring,
reduction in emissions and overall carbon, water andbiodiversity footprint minimisation. Allkem seeks toprevent and minimise biodiversity impacts and land
disturbance through a common framework of standards
and guidance across each Allkem operation.
At each site, we have integrated KPIs and responsibility
for biodiversity management with the Environmental
Superintendent/ HSEC Manager, reporting to the
Operations Manager. Allkem’s Shared Value teams also
support local engagement on biodiversity, undertaking
projects with communities, as well as supporting theCompany’s participatory environmental monitoring
activities. At the Group level, biodiversity impacts andopportunities are the responsibility of the Corporate
Environmental Manager who reports to the Chief
Sustainability and External Affairs Officer. Allkem’s
Board Sustainability Committee oversees Board
awareness of maintaining a longer-term outlook of nature
related impacts and potential consequences for ourbusiness strategy.

FY23 Performance
OlarozAllkem Sustainability Report 2023

Participatory environmental baseline monitoring programs
were completed during the year. We also continue towork with the Olaroz Chico community implementing the
Sustainable Vicuñas Management Project. This project
presents an opportunity to generate shared value with thecommunity by supporting the traditional ‘Chaku’ vicuñas
catching and shearing practices whilst also monitoring
vicuñas population numbers in the region. Allkem
contributes to this project by providing funding
and coordinating a vicuñas specialist to provide therequired technical support and training for the Olaroz
Chico community.

60

Mt Cattlin
At Mt Cattlin, the team have been working towards an
updated assessment of environmental impacts andmitigation measures for the Stage 4 expansion project. The
site-based environment team have also continued to workwith specialist rehabilitation contractors to implement therevegetation works program on site.

James BayIn January, Allkem received Canadian Federal Government
approval for the James Bay Environmental and Social
Impact Assessment (“ESIA”), determining that the
project’s environmental mitigation measures provide asustainable path for the project to proceed. During theyear, the Company progressed the environmental plans
under the conditions of the approval in partnership with
the Cree Nation communities of Waskaganish, Waswanipi
and Eastmain.

Sal De Vida
During the year, our teams at Sal de Vida, have beenworking to align the Project’s management approacheswith the globally recognised IFC performance standards
on Environmental and Social Sustainability. The awardingof a sustainability-linked, green loan to the Project isrecognition and validation of the high ESG standards
and targets already adopted. Through the IFC funding
process, Sal de Vida has addressed the IFC PerformanceStandard 6—Biodiversity Conservation and Sustainable
Management of Living Natural Resources (“IFC PS6”).
In accordance with this Standard, Sal de Vida has adopted
a ‘No Net Loss’ objective to sustain the flora and fauna in
the area of influence, and a ‘Net Gain’ approach related
to specific priority biodiversity values. A draft Biodiversity
Action Plan has been developed to investigate potential
offsets to support ‘Net Gain’ objectives. We are also
working towards updating biodiversity monitoring
protocols to increase understanding of the variabilityof biodiversity values throughout the area overdifferent timescales.
An assessment was carried out by consultants as part of
the IFC due diligence that concluded the Project does notoverlap with community land or natural resource use. We
maintain a program of engagement to address community
concerns relating to any potential or perceived biodiversity
impacts of the project.
The team have also completed an assessment of potential
cumulative environmental and social impacts from our
project, and other activities in the region. These studies
are being used to define ongoing mitigation andmanagement measures.

Water Use
Strategic Focus
Although Allkem’s lithium operations and projects are all
located in regions of lower water risk as classified by the
WRI Aqueduct Tool30, we maintain a strong focus on water
use efficiency and reporting transparency.

Ensuring long-term water availability is a criticalconsideration for companies across all industries,
particularly given changing climatic conditions andincreasing demands on the world’s natural resources.
The water intensity of the lithium industry receives muchattention as some lithium sources are in areas of highwater stress with competing water needs.

N

Rosario River

Chile

20km

Jujuy Province

Coranzuli

El ToroJama

San Juan Quillayes
Salar deOlarozOlaroz Chico

OlarozCauchari
Reserve

Olaroz Lithium
Facility 3900m
Archivarca River

Susques
52

Jujuy
212km

Huancar
40

70

Pastos Chicos

Catua
Puesto Sey
1V40

Tocomar River
51

129

51

Salta City
32km

40

Rosario River

Salta Province

Salar delHombre Muerto

Ciénaga Redonda

Antofalla

Sal de Vida
ProjectCatamarca ProvinceCommunities

High water risk

Operations and project sites

Medium-highwater risk

Villa de Antofagasta

Roads
43

El Peñón

30 Including under the RCP8.5 climate change scenario, up to 2030

Provincial boundary

Low-medium
water risk

Rivers and drainage

Low water risk

Salt lakes and lagoons

Allkem Sustainability Report 2023

LegendLos Nacimientos

61

Our brine-based operations extract brine from wells andpump it to solar evaporation ponds. Process or operational
water use referenced in our performance data refers to thequantity of groundwater extracted during the reporting
period, not brine.
The Olaroz Lithium Facility does not draw on surface wateror potable or agricultural quality groundwater.
At the Sal de Vida Project no surface water is extracted
directly from the Los Patos River. All operational water
will be sourced from non-potable groundwater. There is
no expected loss of water to communities in either their
groundwater or surface water usage. Water monitoringtakes place at seven different control points alongside
nearby rivers in addition to periodic sampling to test flow
rates, chemical and physical properties. We undertake
this monitoring in partnership with local community
representatives to increase transparency and address
any concerns.
The Mt Cattlin spodumene mine does not draw on surface
water. Water used for processing mine material is sourced
from in-pit dewatering and recycled water decanted
from the tailings storage facility (“TSF”). Additional waterneeds are met by water sourced from a groundwaterbore field near the site. Rainwater is also collected
in 450m3 tanks and used to supplement site watersupply. A reverse osmosis plant is utilised for freshwaterrequirements on site.
The James Bay project in Quebec, Canada is located ina remote environment with an abundant water supply.
Baseline and impact studies show overall anticipatedproject water use will have a negligible impact on overallwater supply in the region. Project infrastructure intends
to minimise impacts on the water catchment. Our goal isto reuse water as much as possible with no water leaving
the project site. We have completed geotechnical studies
on waste stockpile locations to ensure ground water
resources are not significantly impacted.

FY23 Performance
Overall water use across our operations and growth
projects during the year is shown below. The majorityof ground water used during the year was at the Olaroz
lithium facility in the operation of Stage 1 and in theconstruction activities associated with Stage 2. In total,
the Olaroz Stage 2 project has involved the constructionof 15 extra brine wells, 31 evaporation ponds, three
lime plants, a reverse osmosis water plant, a soda ash
plant, a carbonation plant, accommodation and various
service spaces.

AllkemTotal Water
Extraction (m3)Allkem Sustainability Report 2023

62

Olaroz Stage 2 & Expansion
36%
Mt Cattlin 11%
Sal da Vida 3%

Mt Cattlin Water Use
AllkemOlaroz Stage 1 (Operations)50%

Stage 2 & Expansion
The teamTotal
at MtWater
Cattlin have focused Olaroz
on evaluating
the36%site waterbalanceduringtheyear,
incorporating
mine
life
Extraction (m3)
Mt Cattlin 11%
extension activities.
Sal da Vida 3%

MtMt
Cattlin
Water
Extraction(m3)is reused throughout theAt
Cattlin,processing
water
operation. The majority (approximately 90%) of water usedon site is sourced from in-pit dewatering and decantingof the TSF. At Mt1.37
Cattlin, water extraction from licenced
bores adjacent to the site this year (shown below) was
40% less than in FY22. This corresponds with an increased
efficiency of water recovery from the SE in-Pit TSF which
was used throughFY23 after the closure of the SW in-pit
258,060.00
TSFCattlin
in 2022.
Mt
Water Extraction (m3)
Mt Cattlin Water Extraction (m3)
1.37

Governance
Water use at the site level is the responsibility of the Asset
Hydrogeology and Environment Managers, reporting to
the Head of Operations for the site. At the group level,
the Corporate Sustainability Manager oversees reportingon water use metrics and reports directly to the Chief
Sustainability and External Affairs Officer. Water use for
the Olaroz Lithium Facility and the Sal de Vida projects
also have the oversight of a Corporate Environmental
Manager, also reporting directly to the Chief Sustainability
and External Affairs Officer. Oversight of water risk andstrategy implementation is the responsibility of the Board
Sustainability Committee.

Olaroz Stage 1 (Operations)50%

155,550.00
1.19
258,060.00

155,550.00
2022
Mt Cattlin

Operational Intensity (m3/t Spodumene Concentrate)2022
Mt Cattlin

2023
1.19

2023

Operational Intensity (m3/t Spodumene Concentrate)

Olaroz Lithium Facility Water Use
Although overall water use increased at the Olaroz Stage
1 operation during the year, water intensity improved
as production also increased. Lower water intensity per
tonne of product was also associated with increased brine
concentration levels and a lower amount of battery gradelithium carbonate produced during the year requiring lessprocess water.

3)
OlarozOlaroz Groundwater
Groundwater Extraction
Extraction (m(m3)

800,000
700,000

48.8

49.9

43.0
42.9

600,000
500,000
400,000
300,000

100,000
0
2020
Stage 1 (Operations)2021
Stage 2 & Expansion

2022

Operational intensity (m3/t Lithium Carbonate produced)

2023

Allkem Sustainability Report 2023

200,000

63

Waste and Tailings Management
Strategic Focus
Allkem operates brine-based and hard rock lithium projects.

Allkem Sustainability Report 2023

Our brine-based lithium carbonate operation and projects
in Argentina are not mining operations. These operations
do not mine ore and therefore, do not produce tailings.
At brine-based projects, the processing method begins
with extracting brine from wells within the salt lake (salar)and then pumping the brine to large scale evaporation
ponds. Evaporation ponds are approximately one metre
deep and are similar to shallow water dams. The pond
wall construction is of the downstream method using
compacted sand and earth, and an impermeable liner isplaced in the ponds to contain the brine. As evaporation
ponds are an integral stage of the brine production
process, they are subject to constant monitoring andmanagement. Such processes include visual inspections,electrical resistivity testing, remote sensing, leak detection
and density testing of pond walls. Ponds are periodicallydrained, and precipitated salts are removed to storage
locations on site. When this process is complete, theemptied ponds are refilled with brine and broughtback into the evaporation pond system. There are no
tailings or Tailings Storage Facilities (“TSF”) at theseprojects, as defined in the Global Industry Standards
on Tailing Management.

64

Our hard rock mining operation and projects, produce
mineral waste including tailings. The volume of waste
rock generated is directly related to the volume of ore
processed and the strip ratio. Mineral waste in the formof mine site overburden is deposited in conventional
waste rock piles on site designed for long term stability. At
each of these sites, Allkem is committed to constructing,operating and decommissioning TSFs in a safe mannerconsistent with regulatory requirements, applicableguidelines and standards. These include the Canadian
Dam Association (“CDA”) and Towards Sustainable Mining(“TSM”) Tailings Management Directive and Protocol(which references the Global Industry Standard on
Tailings Management (“GISTM”)), the Australian National
Committee on Large Dams (“ANCOLD”) and Western
Australian Department of Mines, Industry Regulation and
Safety (“DMIRS”) Guidelines. We are focused on effectively
identifying and mitigating risk throughout the whole life
cycle of the TSF including planning, design, construction,
maintenance, decommissioning, rehabilitation and postclosure monitoring and maintenance.
Due to the remote location of our operations and projects,
effective management of non-mineral waste is also
important for minimising costs associated with transport
and treatment.

GovernanceAt an operational level, Allkem has integrated KPIs
and responsibility for waste management with theEnvironmental Manager of each asset. Management ofmineral waste and TSF management is the responsibility of
the Registered Manager, Mining Manager, and Senior Mine
Geologist as defined in the relevant regulations for eachsite. The accountable executive is the Head of Operations
for each region. At the group level, management of
non-mineral waste is the responsibility of the Chief
Sustainability and External Affairs Officer. Allkem’s Board
Sustainability Committee oversees Board awareness ofmaintaining a longer-term outlook of waste management
and any potential impacts on the business strategy.

FY23 Performance
Mineral waste
An external audit is carried out each year to ensure that
the Mt Cattlin TSFs are operated in alignment with the
TSF design protocols. The most recent audit during FY23
was in July 2022. Overall risks of TSF operational practices
at Mt Cattlin remain very low, due principally to the inert,coarse-grained and free draining characteristics of thetailings. Risks are particularly low for the in-pit TSFs, which
are inherently stable. Water contained within tailings is
de-watered and pumped back for reuse in the operation of
the site.
Lithium One Inc., (acquired by Galaxy Resources in 2012)
included a closed, historic tailings and waste rock facility
in the James Bay and Northern Québec Agreement
region. During FY23 we commenced remediation of thisarea to ensure the site is environmentally safe for future
generations. As a part of this process, we are consultingwith the Cree Nation of Waswanipi. Rehabilitation
activities at the site reached 45% completion during theyear. Site activities were impacted during June due toforest fires in the region requiring evacuations of the area.
A summary of each of our TSFs is available in theEnvironment Performance data on our website.
At Olaroz, over 2.5 million tonnes of precipitated salts were
harvested from the evaporation ponds during the year.
Allkem’s Research and Development team have conducted
tests on specific recovered salts to investigate use in
future applications, potentially turning waste products into
additional revenue streams.
During the year, we also investigated opportunities toreprocess lower grade products that were previously
stored on site. At Olaroz, methods were developed toreprocess lithium carbonate residue that had been
extracted from the process tanks and pipes during
cleaning and maintenance periods over the life of theplant. Cleaning, sorting, testing and re-bagging of thematerial was carried out on site. Sale of these products
generated an additional US$12.3 million in revenue during
the year.

Higher demand for lithium products also provided an
opportunity to sell low grade product from Mt Cattlin thatwas then further processed by our customers to extract
spodumene concentrate and then convert it to lithiumchemicals. This generated a further US$99.7 million
in revenue.

Waste Disposed(tonnes)~678t

Operational waste
Due to a focus on efficiency, over twice as muchoperational waste was recycled at our sites during
the year than was disposed in landfill.

Olaroz (Including Stage 2
and Expansion) 63%

Waste Recycled(tonnes)~1476tMt Cattlin 7%
Sal de Vida 29%
James Bay 1%

Olaroz (Including Stage 2
and Expansion) 81%
Mt Cattlin 17%
Sal de Vida 2%

Natural Capital—FY23 Future Focus Metrics and Targets

FY23

FY23

FY24

FY28

FY35

Value

TargetTargetTargetTarget

1.19

1.25

1.1

1

NA

Olaroz (Sales de Jujuy)

Value

TargetTargetTargetTargetOperational Water Intensity (m3/t)

42.9

48

47

<45

<40

Mt Cattlin
Operational Water Intensity(m3/t spodumene concentrate)

Allkem Sustainability Report 2023

Current estimates for water use intensity for our operational sites are included below.

65

Blue Print
Wendy Williams

66

Shared Value
Strategic Focus

Mt Cattlin

We are privileged to have respectful partnerships withlocal and indigenous communities in Ravensthorpe,
Western Australia, the provinces of Catamarca, and Jujuy
in Argentina and Quebec, Canada. We understand theimportance of listening to all voices that make up ourcommunities and being responsive to community ideas
and concerns.

We have a Native Title Claim Wide Mining Agreementwith the South West Aboriginal Land and Sea Corporation(“SWALSC”) representing the Wagyl Kaip and Southern
Noongar People, covering the tenements surrounding
Mt Cattlin. In 2018, we also entered a Noongar Standard
Heritage Agreement (Non ILUA Proponents) with the
SWALSC which defines the requirements for heritage
surveys. We continue to maintain ongoing dialogue with
Wagyl Kaip and Southern Noongar representatives todetermine requirements for project expansion areas prior
to any future construction.

First Nations and Pueblos
Originarios Partnerships
As outlined in Allkem’s Community and Social
Performance Policy, we are guided by the United Nations
Declaration on the Rights of Indigenous Peoples and IFC
Performance Standards in our interaction with indigenous
peoples. Our social licence to operate is gained andmaintained by developing strong, trusted relationships
with local communities and governments. Where ouroperations are located in areas with indigenous traditional
owners, we work with provincial governments and local
communities to seek ongoing free and informed consent
throughout the life of each project. Our approach toengagement, participation and consent for Indigenous
Owners or Pueblos Originarios at each operation andproject is summarised below.

“Blue Print” tells the story of the
beginning of the determinationto achieve effective consultation
with relevant Aboriginal
Communities throughout the
Wagyl Kaip Boundary Areas.

The Mt Cattlin Community Consultation Group continues
to identify opportunities to create shared value withrepresentatives from the Ravensthorpe and Hopetoun
communities in Western Australia. Additional engagement
activities are also carried out with the traditional ownerrepresentatives.
During the year, Allkem hosted the Southern Noongar
and Wagyl Kaip Claimants at our Mt Cattlin mine where
we established what was important to each of the groups
present and, in collaboration, developed the foundations
for an indigenous artwork.
“Blue Print” (pictured left) tells the story of the beginningof the determination to achieve effective consultation with
relevant Aboriginal Communities throughout the Wagyl
Kaip Boundary Areas. It was important to seek the opinions
of local Aboriginal communities and gain permission for
negotiations, prior to the commencement of mining.
The painting illustrates this Trust using vibrant colours,
shapes, textures, circles, lines and tracks. Shades of green
are used to display the many colours of Lithium at Mt
Cattlin, whilst the rocks and minerals are represented
by the remaining colours. The large circle represents a
communal meeting place around a table at Mt Cattlin
and symbolises walking and working together, engaging
in team discussions, the importance of people andcorporate bodies, agreements, environmental obligations
and land management. The many large circles represent
the individual towns surrounding Mt Cattlin. The tracks
illustrate pathways that lead back to the large circle.
We thank Wendy Williams for this artwork.

Allkem Sustainability Report 2023

We focus on developing community projects andpartnerships that have potential to generate long term
benefits. We are transparent about the value that Allkem
generates and how this is dispersed in the regions where
we operate. Significant value flows back to the local
communities where we are based. This value is mainly
distributed through community infrastructure andtraining initiatives, fees, taxes and royalties paid to local
governments, salaries paid to local community members
who work at our operations and payments made to local
suppliers and contractors.

67

OlarozEngagement with the ten indigenous communities in the area of the Olaroz Lithium Facility began well before any
construction activities were initiated at the site. Each year, our Shared Value teams work collaboratively with eachof these communities, to agree on the funding of projects focused on the following areas:

1

Empowerment

2

3

Transparency

Production andNatural Resources

A Participation Agreement is also in place for communities
where our operations are located on their land. The Olaroz
Chico Community Participation Agreement has been inplace since 2016. This agreement was updated during
the year and reflects ongoing support of the facility as
production increases. An easement agreement wasalso signed during the year with the El Toro community
providing consent for infrastructure on land owned bytheir community.

Allkem Sustainability Report 2023

We celebrate, learn from, and respect the cultures of
the indigenous communities where we operate. Eachyear in Argentina, on 1st of August, we participate in the
Pachamama ceremony with our indigenous communities,
employees and suppliers. The Pachamama offering
ceremony is an indigenous tradition of Andean peoples
where offerings of food and beverages are buried as
gratitude for the help and protection provided by Mother
Earth. This is a time for celebration and giving thanks forthe environment that we operate within.

68

4

5

Education

HealthSal de Vida
Throughout the approvals process for our Sal de Vida
project, we have engaged regularly with communities in
the remote region near the Salar del Hombre Muerto. We
share information regarding the project, potential impacts
and the mitigation measures we have established. We arealso working with communities to better understand theirneeds and implement community infrastructure projects.
This ongoing dialogue between the community and teammembers from Sal de Vida has established a relationshipof trust.
As part of the due diligence conducted by the IFC for thegreen and sustainability linked loan facility, an updatedsocial baseline was completed to confirm our process isaligned with the requirements of the IFC PerformanceStandard 7—Indigenous Peoples. The outcomes of thisstudy were published on the IFC Project Information Portal
during the reporting period.
An independent consultant developed the social baselineby undertaking site visits and a series of interviews withmembers of local families, talking with both men andwomen. The baseline considered all communities within a
50km radius of our project site. The assessment concluded
that the Sal de Vida project does not overlap on activities
or resource use areas of the local indigenous peoples andthat Free, Prior and Informed Consent (“FPIC”) does not
apply to the project. Despite not impacting lands used byindigenous peoples, we continue to apply the Informed
Consultation and Participation (“ICP”) approach to our
broader stakeholder engagement.

Pachamama ceremony at Olaroz Lithium Facility August 2022.

James Bay

Governance

In March 2019, a Preliminary Development Agreement(“PDA”) was signed with the Cree Nation of Eastmain,
the Grand Council of the Cree and the Cree Nation
Government. This PDA will be replaced by an Impact
Benefit Agreement (“IBA”) with these same groups before
construction is initiated.

Community engagement and shared value programs aredeveloped and implemented at each site by the Shared
Value/Community Relations teams, with the oversightof the Operations Manager. Allkem’s Chief Sustainability
and External Affairs Officer is responsible for group levelgovernance and oversees the development of strategy.
The Sustainability Committee oversees Board awarenessof risks and opportunities associated with communities
and potential impact on business strategy.

The mining industry in Québec is subject to both federal
and provincial laws and regulations. The federal impact
assessment, finalised in January 2023, was conductedby a Joint Assessment Committee (“JAC”), composed ofrepresentatives appointed by the Cree Nation Government(“CNG”) and the Federal Government Agency. Public
documents relating to the Environmental and Social
Impact Assessment (ESIA), including the conditions of
the Federal Government approval are available on the
Canadian Impact Assessment Agency Project website andthe Allkem Project website.
The James Bay team continues to undertake regular
engagement with community stakeholders addressing
the conditions of the project’s Federal Government
approval. We are also continuing to finalise the IBA
process and provincial level approvals with the Quebec
and Cree Nation Governments.

FY23 Performance
During FY23, significant value flowed back to the local
communities where we are based. The value distributed
to our local communities at the Mt Cattlin and Olaroz
operations as well as the Sal de Vida project aresummarised below.
Additional payments to provincial and federal
governments are disclosed in the Tax Transparency
section of this report.

During the year, the team at James Bay developed an
online training module to increase awareness among thebroader workforce of Cree history, culture, traditions, andconnection to the land.

Local Employment

Community Contributions(Including infrastructure program
investments, grants & donations)

Mt Cattlin

US$ 2.2 million

US$ 6.5 million

US$196 K

Olaroz (Sales de Jujuy)

US$ 35.1 million

US$7.1 million

US$360 K

Sal de Vida

US$ 1.9 million

US$363 K

US$450 K

Allkem Sustainability Report 2023

Local Procurement

69Community Capacity Building Case Studies
We are proud of the exceptional commitment that our Shared Value team in Argentina haveshown in establishing trust with the local communities where we operate. We invite you tohear from them, in their own words as they tell us what is most important to them and thecommunities that they work with.
Continuing Education Program—Long term outcomes Case StudyIn the early stages of the approvals process for the Olaroz
Lithium Facility, leaders of the ten local communities
identified their expectations for local employment. Dueto the remote location of the project, it was also in ourcompany’s best interest to have as many skilled workers
available as possible. Our Shared Value and Human
Resources teams at Sales de Jujuy identified that inorder for local people to fully participate in employment
opportunities, providing the appropriate level of training
and education was critical.

In 2014, Sales de Jujuy began working collaboratively
with the Jujuy Government and our local communities todevelop the Continuing Education Program. The program
was designed to achieve quality, equitable, inclusive andaccessible education to enable local community members
to complete their secondary education.
The program began in February 2015 with 25 students
attending. Classes were run by teachers appointed by the
Jujuy Ministry of Education and logistics were coordinatedby our Shared Value team. Sales de Jujuy also contributes
funds covering food, transportation, books and supplies.
Classes were scheduled so that both night and day shift
employees had the opportunity to attend. In December
2016, the Program reached its first milestone with 19
students graduating. Initially, there was some resistancefrom older employees to participating in the program.
However, as more employees have completed theirstudies, it is now seen as an opportunity for growth andpersonal development. Classes are offered not only to ouremployees seeking to complete high school studies, butalso to the employees of contractor companies working
with Sales de Jujuy.

Allkem Sustainability Report 2023

Since the implementation of the Continuing Education
Program, we’ve seen the percentage of local employeeswith secondary education at Olaroz increase from 25% to75%. Our objective is to reach 90% by 2025. Currently, we
have 66 students enrolled in the Program, 44 from Salesde Jujuy and 22 who are employed by local contracting
companies. This year, 5% of Sales de Jujuy local employees
are also enrolled in further, tertiary education with 2
local employees benefiting from scholarships funded by
the company.

70“Our goal has always been to
create bonds of trust, relationships
with the communities, prioritising
their participation in our projects
and actions. I’m proud of working
at the company, to be welcomedwith such love due to all the work.”
Carmen Benitez—Allkem Shared Value Team

Sales de Jujuy—Local Community Employees
350
300“I’m from Jujuy. It was very
250
important for me to be able to live
200
inJujuy, see people and look them150
in the eye knowing I haven’t lied to
100
them.
To work with a company that50
has
these values, I’m very proud.”0

Bruno Canavire—Salesde
Jujuy Shared
Value,
2014
2015
2016
2017
2018
Community Infrastructure Team
Operators

2019

2020

2021

2022

2023

Analyst/Middle Management

Sales de Jujuy—Local Community Employee—Education Levels

9%

17%
34%

16%

49%

17%

26%

90%
70%

26%

66%
40%

25%
5%
2014

2017

Completed Secondary Education

2020*

2023

Currently enrolled in/completing Secondary Education

2025—Target
Completed only Primary Education

Currently enrolled in further studies beyond Secondary School

Sales de Jujuy—Local Community Employees
350

250
200
150
100
50
0
2014
Operators

2015

2016

Analyst/Middle Management

2017

2018

2019

2020

2021

2022

2023

Allkem Sustainability Report 2023

300

71

The number of Sales de Jujuy local employees working at
the Olaroz Lithium Facility has also increased. There are
now over 300 employees from our ten local communities.
Due to the increasing level of education, skills, andexperience of these employees, we are also seeing acontinued representation beyond the operator level of ourworkforce. This results in higher salary payments flowing
back to the local communities where these employees live.
Our focus on working with the provincial governmentand communities to increase education levels also
extends to our Sal de Vida project. We have worked
with the National University of Catamarca and theMunicipality of Antofagasta de La Sierra to develop a
specific course focused on the skills required to work in
the lithium industry. During the year, 14 participants from
communities around Sal de Vida completed the first of
three years of study towards achieving this qualification.

Huáncar Tourist Accommodation—
Case Study Update
In FY22, Sales de Jujuy contributed to the buildingof a tourist lodge in Huáncar, a local community of
approximately 430 people. The lodge was constructed bya local builder with local materials and using traditional
construction methods. During FY23, this building wascompleted, including the instalment of furnishings madeby local artisans and the installation of solar panels. During
the year, the community welcomed their first paying
guests at the lodge. Revenue from the lodge is managed
by the community of Huáncar with funds being reinvested
into further improvements. Planned enhancements
include landscaping around the lodge incorporating acommunity garden.
The Sales de Jujuy Shared Value Team are continuing towork with the community of Huáncar on the next phase ofthis project through our ‘My Green Footprint’ program.

“At a general meeting, we
decided which project to carryout with the funding from Salesde Jujuy, and people voted for
lodging. Small businesses fromthese communities benefit fromthis and there are more jobs. It
is exciting that the community
grows more and more each day.”

Allkem Sustainability Report 2023

Elena Calpanchay—Huáncar
Community Member

72“I’m proud because theconstruction is just like how I,
the community, and Sales deJujuy, dreamt it. I’m proud of
being able to finish this project.”
Emilio Cruz—Local Builder

My Green Footprint—ProgramThis My Green Footprint program is being developedwith the communities of Huáncar and Susques in Jujuy
Province. The program is a collaboration of local schools,
community groups and the Ministry of Environment andClimate Change of Jujuy Province, to increase knowledgeof composting and improving soils to cultivate new trees
for planting in the region. During FY23, Sales de Jujuy
have invested approximately US$17,700 towards the
management of this program including the contribution ofmaterials for the construction of plant nurseries, tools andcompost bins.

Local Food Production (Sal de Vida and Olaroz)
We continue to work with communities around the Olaroz
Lithium Facility and the Sal de Vida project to establish
safe and sustainable local food production initiatives.
Greenhouses, and chicken coops, built in partnershipwith local families and schools provide sources of healthy
fresh produce to be used by local families, or sold to othermembers of the community. During the year, materials andtraining have been provided to support these initiatives.

Sal de Vida—Community Infrastructure andMedical Programs
During FY23, Allkem worked with local communities
around the Sal de Vida project to install solar
photovoltaic (”PV”) electricity systems and Wi-Fi
access for rural homes. These systems now provide
solar electricity to 32 members of the community across
10 households and reliable Wi-Fi connection for a further
8 community members.

“It is gratifying to work withthem, to go, teach and also
learn so much.”
Pablo Quiroz—Allkem AgriculturalEngineer, Shared Value Team.

Allkem Sustainability Report 2023

We have also partnered with the medical team at the
Antofagasta de La Sierra Hospital to carry out medical
visits to the communities in the region of the Sal de Vida
project. During FY23, 441 community members benefited
from this service.

73

Each year Mt Cattlin hosts a community fun day atRavensthorpe to say thank you to local families andbusinesses that support our operations at the mine.

Local 13%/54

Mt Cattlin

Provincial 67%/289
National 18%/76
International 2%/10

Sales de Jujuy(Olaroz
Sal deLithium
Vida
Facility)(Contruction

Allkem Sustainability Report 2023

Phase Project)

74

Further community capacity building case studies
for are available on our website.

Local Community Suppliers
The number of local suppliers for each of our operations,and for the Sal de Vida project during FY23 areshown below.
Local 13%/54

The “Believe in Yourself” initiative aims to inspire andconnect the youth of Ravensthorpe and Hopetoun byassisting with the availability of focused services andprograms in the town. Allkem has supported seven youth
focused programs and events since this initiative wasestablished in 2022.

/10

4

Pitch your Project

Believe in Yourself

6/9Allkem’s Big Day Out

Through Mt Cattlin’s “Pitch your Project” initiative, Allkem
invites members of the local community and not-for-profit
groups to apply for funding for projects that benefit theregion. Over the past six years, we have supported over
80 community projects through the initiative andcontributed more than $550,000 AUD to local schools
and education providers, community and sporting groups,
events, shows and exhibitions.

289

14

Mt Cattlin

Local 6%/53
Provincial
17%/148
Local
2%/12
National 72%/637
Provincial
47%/214
International
5%/45
National
49%/224
International 2%/9Value of supply contracts awarded to Provincial 67%/289
Mt Cattlin
locally based suppliers (US$)$2.2 m $35 m
Mt Cattlin

OlarozSal deSales
deVidaJujuy(Contruction(Olaroz
Lithium
Phase
Project)
Facility)

National 18%/76

International 2%/10$1.9 mSal de Vida

Local
Local2%/12
6%/53
Provincial
Provincial47%/214
17%/148
National
National49%/224
72%/637
International
International2%/9
5%/45

S
(O

Tax Transparency
The Allkem Tax Policy is available on our Company website, and outlines tax management practices that apply throughout
Allkem and its subsidiaries. During FY23, the following payments were made in Australia, Argentina, Canada, and theNetherlands. The Jujuy Energia y Mineria Sociedad del Estado (“JEMSE”) payment is a dividend amount paid for the firsttime in FY23 from Sales de Jujuy S.A. to JEMSE.

Country and level ofgovernment ($US)

Corporateincome tax

Royalties

Employer
payroll taxes

Australia Total

70,098,445

28,945,062

1,291,694

Australia Taxation
Office70,098,445--

State of NSW--

State of Queensland-

State of Western
Australia

Export duties

Other taxes &payments

Total tax &payments
borne

Employeeand other
withholdings

3,882,768

104,217,969

7,679,656-

54,457

70,152,902

7,679,656

137,711--

137,711--

170,797--

170,797--

28,945,062

983,186-

3,828,311

33,756,559-

Argentina Total

9,029,550

16,183,514

16,230,428

35,812,495

3,619,160

80,875,148

31,355,455

Administración
Federal de Ingresos
Públicos

9,029,550-

16,230,428

35,812,495

2,347,090

63,419,564

26,466,961

Province of Jujuy-

16,183,514--

221,365

16,404,879

2,937,485

Province ofCatamarca

-

-

-

-

17,252

17,252

1,951,008

Jujuy Energia y
Mineria Sociedaddel Estado (JEMSE)

-

-

-

-

1,033,453

1,033,453-

Canada Total--

296,435-

108,564

404,999

1,228,226

Canada Revenue
Agency--42,991-

1,960

44,951

1,116,209

Government of
Canada----18,494

18,494-

Province of Quebec--

253,443-

87,902

341,345

112,017

Province of Ontario

-

-

-

-

208

208

-

Netherlands Total31

5,331

-

-

-

-

5,331

-

Belastingdienst

5,331

-

-

-

-

5,331

-

31 The Corporate Income Tax Payments for the Netherlands were included in the consolidated figures in the Annual Report.
They are considered immaterial therefore not separately disclosed.

Allkem Sustainability Report 2023

FY23 Taxes & payments made by country and level of government

75

Partnerships, Memberships and Affiliations
Allkem’s Anti-Bribery and Corruption Policy prohibits any employees from making political donations on behalf of Allkem.
Allkem (as a Group, or through our subsidiary companies) supported and contributed to the following industry associations
and external initiatives during the reporting period.

International Lithium Association (“ILiA”)

United Nations Global Compact (“UNGC”)

ILiA are the global trade association for the lithium industry
and represents the entire lithium value chain. Allkem is acore founding member of ILiA.

Allkem has been a participant of the United Nations
Global Compact since 2018 and is a member of the UNGC
Network Australia.

In July 2022, ILiA became a member of the Global Battery
Alliance in and was confirmed as an official observer to the
ISO Technical Committee for lithium, ISO/TC 333.
During the year we participated in ILiA’s Sustainability
Sub-Committee, who are currently involved in developing
an industry wide guidance on Life Cycle Assessment.

ISO Standards

Association Minière du Québec (“QMA”)
and Argentine Chamber of Mining
Entrepreneurs (“CAEM”)

Our Environment, Quality and Safety Management systems
are ISO Standard certified for the Olaroz Lithium Facility.
The Sal de Vida project is working toward implementationand certification when operational. Our Mt Cattlin
operation management systems are aligned with the
ISO Standards.

Both CAEM and QMA support the Towards Sustainable
Mining (“TSM”) Initiative developed by the Mining
Association of Canada.

CDP

Allkem Sustainability Report 2023

Continued our participation in the CDP—Climate,
Water and Forest surveys.

76Allkem Sustainability Report 2023

Independent Auditor’s Limited Assurance Statement

77

78

Allkem Sustainability Report 2023

Forward Looking Statements
Forward-looking statements are based on current expectations and beliefs and, by their nature, are subject to a number of known and unknown risks and uncertainties that could cause
the actual results, performances and achievements to differ materially from any expected future results, performances or achievements expressed or implied by such forward-looking
statements, including but not limited to, the risk of further changes in government regulations, policies or legislation, risks that further funding may be required, but are unavailable, forthe ongoing development of the Company’s projects; fluctuations or decreases in commodity prices; uncertainty in the estimation, economic viability, recoverability and processing ofmineral resources; risks associated with development of the Company Projects; unexpected capital or operating cost increases; uncertainty of meeting anticipated program milestones
at the Company’s Projects; and risks associated with general economic conditions. Subject to any continuing obligation under applicable law or relevant listing rules of the ASX, theCompany disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements in this Release to reflect any change in expectations
in relation to any forward-looking statements or any change in events, conditions or circumstances on which any such statements are based. Nothing in this Release shall under any
circumstances (including by reason of this Release remaining available and not being superseded or replaced by any other Release or publication with respect to the subject matterof this Release), create an implication that there has been no change in the affairs of the Company since the date of this Release.

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