2023 AKITA ZINC Public Due Diligence Report
DOWA METALS & MINING CO., LTD.

1. Company Information
DOWA METALS & MINING CO., LTD. (hereafter “DMM”) was established in 2006, and its
subsidiary AKITA ZINC CO., LTD. (hereafter “AKITA ZINC”) was established in 1971.
The LMEs word Code for AKITA ZINC is AZCSHG.
AKITA ZINC produces zinc ingots that comply with LME standards.

2. Responsible Minerals Procurement Policy
DOWA HOLDINGS CO., LTD. (hereafter “DOWA HD”) has established the Responsible
Minerals Procurement Policy, with the objective of avoiding the use of minerals that could
directly or indirectly benefit or be a source of funds for armed groups in high-risk and conflictaffected areas, which could result in serious human rights violations. The Policy applies to both
DMM and AKITA ZINC, and it is consistent with third edition of the OECD Due Diligence
Guidance for Responsible Supply Chains of Minerals from Conflict and High-Risk Areas(OECD Guidance). Also, the Policy covers all risks identified in Annex II of the OECD
Guidance ("Annex II Risks") and applies worldwide. If Annex II risks are identified, appropriate
measures to reduce the risk shall be implemented, and the results of the DD shall be reported tosenior management, who shall approve or disapprove the transaction. In addition to distributing
the Policy to a wide range of relevant stakeholders (suppliers, customers, employees, etc.), it isavailable on the corporate website:
https://www.dowa-csr.jp/en/about/procurement-policies
3. Corporate Management System(1) Management Structure
DMM has established internal procedures for supply chain due diligence (hereafter “supplychain DD”) which include the following items to ensure compliance with the Responsible
Minerals Procurement Policy.
⚫ A compliance officer is responsible for the establishment, implementation andmaintenance of the management system related to supply chain DD.
⚫ DMM has clearly defined roles and responsibilities as follows related to theimplementation of supply chain DD, identification of red flags, and reporting on theresults of risk assessment.

Role

Person in charge

Main responsibilities

Senior management

President

・Regularly reviewing the effectiveness and performance ofthe supply chain DD process・Determining whether to continue transactions with highrisk suppliers・Conducting a management review based on reports fromCompliance Officer

Compliance officer

General Manager,

・Reporting the results of implementing supply chain DD toResource Development

senior management& Raw Materials

・Implementing supply chain DD for high-risk suppliers

Department

・Planning and providing training on supply chain DD foremployees

Zinc Material

Senior Manager,

・Purchasing zinc materials according to the internal manual

Purchasing Officer

Resource Development

and rules for responsible zinc sourcing& Raw Materials

・Reporting to compliance officer on supply chain DD

Department

results・Implementing supply chain DDDue Diligence

Assistant manager,

・Appointed by the person responsible for purchasing rawOfficer

Resource Development

materials to implement and report on supply chain DD& Raw Materials

・Operating the management system for supply chain DDDepartment⚫ DMM provided training on supply chain DD and EITI in September 2023.
(2) Internal Management System
In June 2022, DMM established a management system for supply chain DD that complies
with the Joint Due Diligence Standard provided by The Copper Mark. The following details
have been set out under the management standard⚫ Roles and responsibilities (as described above)⚫ Establishment of Zinc Supply Chain DD Manual and Zinc Supply Chain DD Rules, toassess if its activities are consistent with the Policy⚫ Supply chain DD procedures to be implemented to identify adverse impact risks andactual adverse impacts in the zinc supply chain⚫ Procedures such as identifying and reviewing the frequency of CAHRAs list
⚫ Education for employees on responsible mineral procurement for zinc and the frequencyof implementation⚫

Frequency at which the effectiveness and performance of the supply chain DD process
should be reviewed⚫ Establishment of a grievance mechanism to allow any employee or external stakeholder toanonymously raise concerns regarding environment surrounding the mining, trading,handling, and export of zinc in CAHRAs⚫ Retention period of documents collected in the responsible procurement of minerals⚫ Implementation of periodic internal monitoring to verify that responsible procurement ofminerals is carried out
In February 2023, DMM notified all the suppliers that supply AKITA ZINC with zincconcentrate of DOWA HD’s Responsible Minerals Procurement Policy.
DMM has established a dedicated contact point (https://www.dowa-csr.jp/refer/inquiry_mineral_en/) for responsible minerals procurement on its website that can be accessed
anonymously internally and externally.
(3) Record Keeping System
DMM stipulates that it should retain information necessary to implement all applicable stepsof the due diligence process for at least ten years in the Zinc Supply Chain DD Manual.
4. Status of Support for Extractive Industries Transparency Initiative (EITI)DMM supports the promotion of EITI through the following methods.
⚫ Verification of EITI compliance status through KYC for suppliers operating in countries
that implement EITI.
⚫ Verification of money laundering policy and audit report on financial statements forsuppliers operating in countries that implement EITI.
⚫ Informing employees about EITI
⚫ Stating support for EITI in Step 5 report⚫ Verification of the Mexico 2019 EITI report
5. Process for Identifying and Addressing Red Flags
DMM implements the process specified in items (1) through (6) below to identify and respond tored flags in the supply chain. The information gathered and communication on these red flag
reviews are important for ensuring supply chain transparency and strengthening ongoingrelationships of trust with suppliers, which helps to reinforce DMM’s supply chain DD
initiatives.
(1) Based on the Responsible Mineral Procurement Policy, DMM sets criteria (excludingrecycling material) for identifying CAHRAs. DMM uses the following resources indetermining CAHRAs.
⚫ Countries covered by the U.S. Dodd-Frank Act⚫ Heidelberg Conflict Barometer⚫ Worldwide Governance Indicators⚫ CAHRAs set out by the EU⚫ Human rights indicators in the Fragile States Index 2022

(2) DMM collects information from zinc concentrate suppliers through a KYC form, to theextent possible. Reasonable efforts are made to ensure that all necessary information iscollected.
⚫ Company attributes⚫ Beneficial owners⚫ Country of origin⚫ Areas of operation and transit routes⚫ Status of compliance with EITI
(3) Due Diligence Officer checks information gathered through desktop research against theCAHRAs list and sanctions lists. When inconsistencies, errors, or incomplete information
are found on a KYC form returned by a supplier, DMM’s policy is to inform the relevant
supplier of the items that need to be improved and request that the form be resubmitted.
(4) If a supplier is classified as red flag, DMM's policy is to conduct a risk assessment of therelevant supplier based on the identified risks through enhanced supply chain DD(additional KYC, meeting records, ESG activity status and integrated reports, verification ofrecords for previous on-site visits, etc.).
(5) When risk assessment has been carried out, but adverse impact risks or actual adverse
impacts cannot be adequately determined, DMM conducts an on-site visits.
(6) To respond to the adverse impact risks and actual adverse impacts identified as a result of(5) above, DMM takes measures in accordance with the following criteria.
Results of supply chain DDDecision on whether to engage in transactions

Annex II risks other than serious

Transactions will continue while measure are being

human rights violations or affiliation

taken to reduce the risk involved. Note: Clear

with armed groups have been

performance targets must be presented, including

identified

qualitative and/or quantitative indicators in order tomeasure the degree of improvement. Reasonable
timeframes must also be identified.

Risks of serious human rights

・Discontinue transactions immediatelyviolations or affiliation with non-・Terminate agreement

governmental armed groups havebeen discovered.
6. Red Flag Assessment Results
No red flags were found for the period from October 2022 to September 2023 as a result ofimplementing the process for identifying and addressing red flags.