Announcement PDF Contents HIGHLIGHTS FY23 2 MESSAGE FROM OUR MANAGING DIRECTOR 4 WHAT WE DO 6 SUSTAINABLE PRODUCTS FY23 MILESTONES 9 SUSTAINABILITY APPROACH 10 SUSTAINABILITY AT LITHIUM AUSTRALIA 11 UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS 12 STAKEHOLDERS' ENGAGEMENT 13 MATERIALITY ASSESSMENT 14 OUR COMPANY 16 CORPORATE GOVERNANCE 16 CORPORATE VALUES 18 OUR PEOPLE 20 FUTURE – FIT WORKFORCE 20 OUR POLICIES 22 ENVIRONMENTAL STEWARDSHIP Incoming lithium-ion batteries are received at our Laverton North facility 7 26 CLIMATE CHANGE 27 TCFD 28 WATER AND WASTEWATER MANAGEMENT 31 LITHIUM AUSTRALIA SUSTAINABILITY REPORT 2023 1 FY23 HIGHLIGHTS TOTAL WORKFORCE 64 Highlights FY23 We are proud to share our environmental, social, and corporate governance ('ESG') performance for 2023 and disclose our efforts towards a sustainable future. 12% increase over the last 12 months SAFETY 1 Lost time injury incidents Establishment of Safety and Sustainability Leadership Council One outstanding environmental closure matter1 REVENUE AUD $5.5m (87% increase over prior period) FEMALE WORKFORCE 33% of total SAFETY Commitment to expand fire management system at recycling facilities 38.8kL of waste water from recycling operations (FY22: 36.3kL) GROSS PROFIT AUD $1.5m (FY22: $1.7m gross loss) GENDER PAY GAP 9% against a national average of 13%* * Workplace Gender Equality Agency End-of-life batteries diverted 1,347 tonnes ZERO (24% increase over prior period) Zero bribery or corruption incidents No employment agreements with First Nation’s Peoples 1. Relates to Ravensthorpe Rehabilitation 2 LITHIUM AUSTRALIA SUSTAINABILITY REPORT 2023 LITHIUM AUSTRALIA SUSTAINABILITY REPORT 2023 3 Message from our Managing Director Sustainability at Lithium Australia Dear Stakeholders It is with pleasure that I present Lithium Australia’s (the ‘Company’s’) Sustainability Report for the 2023 Financial Year. At Lithium Australia, we are passionate about contributing to a better world. We will do this through our technology platforms of Lithium Chemicals, Battery Materials and Battery Recycling. These three all come to the forefront of helping the world to decarbonise through a circular battery industry. We now have a better understanding of who we are both internally and externally and we invested time with our people to develop our vision, mission and values in early 2023. The result was the development of our company values represented by the acronym, SPARCS. Our Values are Safety, People, Active, Respect, Creative and Sustainability. We often explain SPARCS by simply stating that we start with Safety and end with Sustainability: We hope that this resonates through this report. Key ('ESG') highlights for the 2023 financial year were: Sustainability performance and reporting is aligned to our values which seek to achieve zero harm to our people, minimal environmental impact, and drive towards a zerocarbon environment. • The launch of the Employee Assistance Program ('EAP')', a voluntary professional service that provides confidential counselling and coaching support, and provides information and resources to support our employee’s overall health and wellbeing. Our employees have made a commitment to electrification, via customer focused solutions for the lithium-ion circular battery materials industry. We strive to provide more sustainable solutions to the world in conjunction with the world’s most innovative companies. • Establishment of a Safety and Sustainability Leadership Counsel to assist in the management and promotion of safety and sustainability within the workplace. • Improved safety culture – a deliberate intervention organisation wide to reset expectations and standards relating to standards, which was called Pause 4 Safety. • A 24% year-on-year increase in end-of-life batteries diverted from landfill and an increase in the availability of re-purposed materials to generate new batteries. • Potential customers/off-takers tested our LFP and LMFP cathode powders which have the potential to underpin decarbonisation through electrification. • Our Scope 2 carbon footprint for the group was developed for the second time. • Development of the ('ESG') Roadmap for delivery over FY24 and beyond. For myself, ('ESG') means being a good and ethical corporate citizen. This shows up in the way we are judged to engage with all the stakeholders who are part of or associated with our business. As Lithium Australia scales up its technology platforms, so too do we need to develop our environmental, social and governance systems and this is demonstrated through the ('ESG') Roadmap. Looking ahead to 2024, safety remains a primary focus in light of increasing battery volumes available for recycling - we will continue to develop new ways to protect our employees and stakeholders in the value chain from the risk of fire from these activities. Partnerships are defined under our value of People and we will utilise partnerships, such as the one with Mineral Resources, to advance our Lithium Chemicals and Battery Materials businesses towards commercialisation, as well as building on current recycling partnerships. Our Board, through our Audit and Risk Committee, provides oversight to our ('ESG') development and I thank them again along with our employees and management team for their ongoing commitment to improving our ('ESG') performance. Simon Linge Managing Director and Chief Executive Officer Lithium Australia Sorting line at our Laverton North facility 4 LITHIUM AUSTRALIA SUSTAINABILITY REPORT 2023 LITHIUM AUSTRALIA SUSTAINABILITY REPORT 2023 5 WHAT WE DO At Lithium Australia our values, under the acronym of SPARCS define how we work. In our values, we begin with Safety and end with Sustainability: What We Do Lithium Australia Limited (‘Lithium Australia’ or ‘the Company’) aims to lead and enable the global transition to sustainable lithium production. The Company is aiming to achieve this through the development of patented lithium extraction technologies, creating leading-edge processing technology to produce lithium ferro phosphate ('LFP'), and the operation of Australia’s market leading lithium-ion battery recycler. Lithium Australia is well-placed, via its patented technologies and revenuegenerating recycling business, to capitalise on favourable market dynamics including the continued global demand growth and lithium-ion batteries and growing diversification and adoption of alternatives within global lithium supply chains. 6 LITHIUM AUSTRALIA SUSTAINABILITY REPORT 2023 SAFETY We choose Safety first, every time PEOPLE We take a people centered approach ACTIVE We act in a purposeful way that invokes positive action RESPECT We respect and trust each other and all have a voice CREATIVE We use technology to develop innovative solutions to accelerate global electrification. SUSTAINABLE We each play a role in making the world a better place. Sustainable Products Provision of sustainable products is one of the main objectives of our Company. Our Lithium Chemicals, Battery Materials, and Battery Recycling divisions all possess significant business advantages that allow us to have a circular economy business model and be a key contributor in society’s energy transition to renewables. Lithium Chemicals Lithium Australia has developed a suite of unique extraction and refining technologies including LieNA® and SiLeach® for the recovery of lithium from un-used fine and low-grade lithium materials and the production of lithium phosphate ('LP') for use as a direct-feed chemical into the production of lithium ferro phosphate ('LFP') cathode powders. Lithium Australia is developing its proprietary extraction process, LieNA®, with its technology partner, Mineral Resources Limited (ASX: MIN). LieNA® is specifically designed for the processing of fine low-grade spodumene material that is currently discarded as waste. The process intends to deliver critical chemicals to the battery industry in an ethical and sustainable manner. LieNA® has the potential to lift lithium resource utilisation by up to 50%2 and upgrade economic potential of new and existing mines improving the feasibility of existing mining operations by extending resource life and enhancing energy security in areas where critical battery minerals are scarce or non-existent. Battery Materials Lithium Australia has over 20 years of experience in developing lithium ferro phosphate ('LFP'), a cathode active material used for battery manufacturing, through the Company’s fully owned subsidiary VSPC Pty Limited. The Company utilises a proprietary cost-competitive production process to manufacture LFP at scale. The same propriety production process is also able to produce lithium manganese ferro phosphate (‘LMFP’) without significant changes in the process. LMFP batteries can reach an energy LITHIUM AUSTRALIA SUSTAINABILITY REPORT 2023 density 15% to 20% higher than LFP batteries, with almost no difference in the cost of material inputs. Currently production is dominated by China, with Lithium Australia being one of only a few companies outside of China to successfully produce LFP and LMFP. Our patents cover the production of advanced powders for next generation lithium-ion batteries, especially LFP and LMFP. Produced at our electrochemistry laboratory and pilot production facility, these powders are necessary to power lithium-ion batteries for which demand continues to grow, due to its superiority over nickel-based cathode materials. 2. A  ssumes existing mine concentrator is 60%: 60% to 90% Li recovery increase assumes LieNA® recovers 75% of lithium units going to tails 7 Lithium Australia operates a battery recycling division through its fully owned subsidiary Envirostream Australia Pty Limited. The Company is Australia’s leading battery recycler, while also being the only battery recycler which processes batteries domestically. Collected batteries are processed at the Company’s Victoria-based battery processing facilities, which operates using stateof-the-art safety and processing standards. The Company has secured its future supply for battery collections through strong partnerships, while also benefitting from the Australian government-backed battery recycling scheme, B-cycle, which provides rebates across collection, sorting, and processing of batteries. A national network of accredited B-cycle drop-off locations has quickly grown through partners who supply end-of-life ('EOL') batteries for recycling, such as Bunnings Warehouse and Officeworks. The Victorian EPA has issued a 20-year operating licence which allows processing in excess of 500 tonnes per annum ‘tpa’ of specified electronic waste. Investments and joint ventures Lithium Australia holds certain investments in Australian listed shares. The Company also holds joint venture holdings of 30% with Charger Metals NL (ASX:CHR) for certain tenements managed by Charger. These tenements include the Lake Johnson, Bynoe and Coates projects. These exploration assets will aim to preserve access to lithium deposits that may provide raw materials for future Company mineral processing and chemical production activities. Lithium Australia’s network of reputable recycling partners: During FY23, the shredding equipment was upgraded at our Campbellfield recycling facility. FY23 Milestones FY23 MILESTONES Battery Recycling Corporate, Investments and Joint Ventures Quarter Lithium Chemicals Battery Materials Battery Recycling July – September Formal registration for the LieNA® CRC-P autoclave vessel received, allowing commissioning of the autoclave to commence. A DFS Plant Capacity Assessment Study was initiated. Business development activities increased including visit to the Republic of Korea to engage with potential partners. Executed an agreement with LG Energy Solution for the processing of a minimum of 250 tonnes (‘t’) of LIBs. Executed a battery recycling services agreement with Battery World. Placement in excess of $12m. Appointment of Mr Simon Linge as Chief Executive Officer of Lithium Australia. October – December LieNA® 1st gen patent application was granted (Brazilian Patent Application). Further development of LMFP cathode materials. Engineering study completed for a pre-qualification pilot plant assisting development path optimisation and allowing engagement with offtake and joint development partners. Attended the Asia International Li-ion Battery Recycling Summit in South Korea. Meetings with new Mixed Metal Dust ‘('MMD')’ customers were held resulting in a shipment to a new trading company. Binding agreement with Galan Lithium Ltd for the sale of the Company’s remaining 20% interest in the Greenbushes South Lithium Project. Reclassification of ASX listing from mining to materials. January – March Continued engagement with potential commercial partners for the LieNA® technology. Granted patents in Chile and Brazil. LFP product was independently tested against commercially available product by leading battery research, test equipment, and services company, NOVONIX Battery Technology Solutions. Study initiated to assess expansion of battery storage, sorting and processing infrastructure requirements. Water filtration systems upgraded, improving safety, productivity, cost and environmental performance. Commencement of Mr Simon Linge as CEO. Release of inaugural Sustainability Report. April – June Chinese patent application was granted for LieNA® 2nd generation. Amendment to EPA Victoria’s operating licence of 99 years to 20 years. Lithium Australia further developed its ('ESG') roadmap, defining gaps in its policies and practices to align with ('ESG') standards. Binding agreement with Eastern Resources Ltd for the sale of 70% of the Company’s interest in the Lepidolite Hill Project. Battery Recycling 1,347t 552t (24% increase over FY22) (64% increase over FY22) of EOL batteries diverted from landfill of lithium-ion batteries collected 158t of recovered anode and cathode (black mass) materials sold (11% increase over FY22) 462t of combined steel, copper, aluminium sold (32% increase over FY22) Battery Materials 58kg of lithium ferro phosphate ('LFP') cathode powder produce (161kg in FY22) 8 LITHIUM AUSTRALIA SUSTAINABILITY REPORT 2023 LITHIUM AUSTRALIA SUSTAINABILITY REPORT 2023 156kg of lithium manganese ferro phosphate ('LMFP') cathode powders produce (10kg in FY22) 9 SUSTAINABILITY APPROACH Sustainability at Lithium Australia As we progress the development of our sustainable battery business, we aim to simultaneously decrease our environmental footprint. This will be accomplished through our primary activities of battery recycling, development of battery materials, and lithium extraction technologies. All our endeavours are in response to the expanding demand for electric vehicles and battery energy storage, and the global impetus for a decarbonised economy. Our activities will assist in meeting these industry demands by enhancing sustainable energy sources and resource efficiency. Sustainability Approach At Lithium Australia, we remain committed to achieve continuous improvement and strive to operate at the industry standard levels of Environmental, Social & Governance performance. Our approach remains that of ensuring an ethical and sustainable supply of energy metals to the battery industry. Our ('ESG') Framework follows best practice standards, ensuring that outcomes are delivered in the most sustainable manner. This year, we have maintained our momentum in advancing our sustainable strategy and processes. We continue to draw inspiration from the Global Reporting Initiative ('GRI') and the World Economic Forum’s Stakeholder Capitalism Metrics ('WEF') for our sustainability reporting, disclosure, and strategy practices. As our sustainability approach matures, we will aim to better align to these globally-recognised frameworks. 10 LITHIUM AUSTRALIA SUSTAINABILITY REPORT 2023 ('ESG') Roadmap Preceding Objectives Status Established internal ('ESG') project team Completed Conducted peer and industry sustainability review Completed Mapped key stakeholders Completed Conducted initial materiality assessment Completed Developed ('ESG') roadmap Completed Completed carbon footprint project Completed Articulated companywide sustainability positioning Completed Published inaugural sustainability report Completed FY23 Objectives Status Conducted materiality update Completed Completed a gap analysis against GRI and WEF reporting requirements Completed Reviewed all current Lithium Australia policies In Progress Published second sustainability report Completed Developed an updated ('ESG') roadmap and risk profile Completed Established the Safety & Sustainability Leadership Council 'SSLC' Completed Stakeholder engagement survey Not Started Publish climate risk strategy and TCFD roadmap Not Started FY24 Objectives Governance Planet People • Enhance ('ESG') competency via Board and Management training. • Increase ('ESG') focus in organisation including adding ('ESG') as a standard Board agenda item. • Improve transparency by reporting bribery and / or corruption incidents in Quarterly Report. • Enhance Risk Management Framework. • Develop Grievance Policy and reporting mechanism. • Promote compliance to standards through the commencement of ethics training. • Develop Water Management Plan and Policy. • Implement Environmental Policy. • Develop Environmental Management Plan. • Set GHG reduction targets and identify initiatives. • Increase TCFD readiness by further developing an understanding of requirement by Board and management • Develop Permit and Approval Timeline(s). • Develop an Employee • Promote diversity though Retention Guide. enhanced hiring strategy. • Enhance business process • Improve people reporting processes to track key documentation through indicators. review and development of the following Policies: • Improve visibility of social Remuneration; Gender investment via the capture Equality; Health and Safety; of corporate contributions Modern Slavery; and Nonby category including discrimination and Anticommunity contributions. harassment. • Develop strategy to promote and ensure equal pay and assess entry level wage to minimum wage requirements by gender. • Enhance induction processes through improved and consistent processes for operational sites. • Develop a Training register. • Develop Recruitment, Retention and Termination Policies and Procedures. • Implement Employee Training Plan. LITHIUM AUSTRALIA SUSTAINABILITY REPORT 2023 Prosperity 11 SDG Our operations and sustainability endeavours continue to be aligned to contribute to the United Nations Sustainable Development Goals ('SDGs'). Established in 2015, the SDGs are a set of 17 goals and 169 targets intended to be achieved by the year 2030. Focusing on the most urgent economic, social, and environmental global challenges, the SDGs are a key inspiration for the future prosperity of our stakeholders. Stakeholders’ engagement To achieve this, there must be cooperation in developing strategies that encourage economic growth and address a range of social needs such as education, health, human rights, and job opportunities, while tackling climate change and environmental security. We are remaining focussed on making positive impacts on four SDGS, 7, 9, 12 and 13 and will subsequently expand our contributions to more of the 17 goals as our projects mature. Stakeholder Group Specific Indicator or Target Target 7.1 - By 2030, ensure universal access to affordable, reliable, and modern energy services LIT Target: Increasing the availability of battery materials to meet future demand During FY23, we continued to develop LFP and LMFP including customer product testing. A study for a pre-qualification pilot plant (200-300tpa) was completed to assist in the determination of the optimal commercialisation pathway and allow engagement with offtake and development partners. Following customer demand, the Company is assessing this 200-300tpa against a 2,000-3,000tpa facility for its scale up. Target 9.4 - By 2030, upgrade infrastructure and retroft industries to make them sustainable, with increased resource-use effciency and greater adoption of clean and environmentally sound technologies and industrial processes LIT Target: Developing innovative techniques that enhance lithium extraction capabilities and improve resource efficiency During FY23, we advanced disruptive lithium chemicals technology, LieNA®, towards a landmark joint development agreement with Mineral Resources Limited ('MinRes', ASX: MIN), completed subsequent to the period end. LieNA® has the potential to lift lithium resource utilisation by up to 50% and upgrade economic potential of new and existing mines improving the feasibility of existing mining operations. MinRes is an optimal strategic partner for the Company, as it mines substantial quantities of lithium at its own operations. Global licences are being targeted from the joint venture with MinRes. Target 12.5 - By 2030, substantially reduce waste generation through prevention, reduction, recycling, and reuse LIT Target: Reducing disposal of EOL batteries to landfill During FY23, the Company collected 1,347t (24% increase over FY22) of EOL batteries avoiding disposal into landfill. Target 13.2 – Integrate climate change measures into national policies, strategies, and planning LIT Target: Aligning with the requirements of IFRS S1 and S2 to ensure climate-related measures are integrated into our strategic planning During FY23, in preparation for future reporting, key personnel undertook training on the requirements. In addition, the Company continued to measure its scope 1 and 2 carbon footprint. Stakeholder engagement is essential for our business. We are dedicated to ensuring early, active and continuous collaboration and dialogue between ourselves and our stakeholders. We rely on having strong relationships to be granted access to resources, obtain, and maintain our regulatory and social licence to operate, as well as delivering mutually beneficial partnerships with our communities. The Global Reporting Initiative (‘GRI’) framework defines stakeholders as those people or organisations who are directly or indirectly affected by, or have an interest in, our business. We prioritise stakeholders based on their ability to impact our business and our ability to impact their lives or activities. Significant identified stakeholders and engagement during FY23 are summarised below: Priorities Engagement Employees Provision of a safe and healthy workplace; job security; professional development and training opportunities Regular communication and consultation, including Town Halls; regular 1:1's; training and development programs Board of directors Prudent governance; risk management; protection and creation of shareholder value Regular Board and Committee meetings; direct communication lines between executive and Board Shareholders & investors Return on investment and equity; sensible allocation of risk and capital Investor presentations, annual and quarterly financial reports, direct engagement, AGM Industry, Industry groups and influencers Sharing and receiving of knowledge, peer networking and industry development Regular engagement and collaboration Customers Safe, sustainable and reliable products Direct engagement; communications, including site visits Local Communities Provide long term mutual opportunities for employment and contracting Limited activity during the year Government departments Compliance policies and frameworks; access to funding and approvals Direct engagement and consultation at both state and federal levels. Peers & competitors Sharing and receiving of knowledge, peer networking and industry development Direct engagement; communications, including sharing of industry insights Creditors, insurers and grant providers Credit and business protection, including business continuity. Strong relationships and prompt payment Direct engagement; communications Brokers, advisors and institutions Describe business strategy and demonstrate governance principles Annual and quarterly financial reporting; regular briefings and correspondence Suppliers and partners Development of mutually beneficial relationships Direct engagement; communications, including site visits 3. Tonnes per annum 4. Assumes existing mine concentrator is 60%: 60% to 90% Li recovery increase assumes LieNA® recovers 75% of lithium units going to tails 12 LITHIUM AUSTRALIA SUSTAINABILITY REPORT 2023 LITHIUM AUSTRALIA SUSTAINABILITY REPORT 2023 13 Materiality Assessment We continue to measure and report our performance against the same material topics established in the materiality assessment conducted in FY21, which followed GRI recommendations. However, this year we have included Employee Inclusion and Diversity as a material topic following an internal materiality update with key internal executives. The updated topics aim to improve our focus on our relevant ('ESG') impacts and capture the expectations of our stakeholders and the broader external environment. Each topic falls under the sustainability pillars of ‘Environment, Social, and Governance’. We recognise that our material topics will continue to evolve over time as the Company matures and we will adjust appropriately. In FY24 we plan to reassess our material topics taking into consideration our feedback from key internal and external stakeholders and how they rate the importance of these sustainability topics. The results will help inform an updated materiality assessment. Material Topics Watchlist Topics Workplace Health & Safety Pollution Resource Recovery & Circularity Business Model Resilience Critical Risk Management Materials & Reprocessing GHG Emissions & Energy Legal & Regulatory Sustainable Products Waste Management Waste & Landfill Supply Chain Standards & Transparency Employee Inclusion & Diversity Corporate Governance Water, Wastewater & Stormwater Management Community Engagement & Education Our material topics are outlined in the materiality matrix below. The topics plotted within the shaded area are most material to the Company. Watchlist topics continue to be monitored accordingly. Stoyan Ilich and John Worsley at our LFP pilot plant in Wacol, QLD Lithium Australia Materiality Matrix MORE IMPORTANT GHG Emissions Workplace Health & Safety Water, Wastewater & Stormwater Waste & Landfill IMPORTANCE TO STAKEHOLDERS Employee Inclusion & Diversity Waste Management Legal & Regulatory Pollution Materials & Reprocessing Community Engagement & Education Resource Recovery & Circularity Critical Risk Management Sustainable Products Business Model Resilience Supply Chain Standards & Transparency Corporate Governance MATERIAL REPORTING TOPIC AREA WATCHLIST TOPIC AREA LESS IMPORTANT LESS IMPORTANT MORE IMPORTANT IMPORTANCE TO LITHIUM AUSTRALIA 14 LITHIUM AUSTRALIA SUSTAINABILITY REPORT 2023 LITHIUM AUSTRALIA SUSTAINABILITY REPORT 2023 15 OUR COMPANY The Board is responsible for overseeing the implementation of these policies and procedures with honesty and integrity, pursuing the true ethos of corporate governance commensurate with the Company’s needs. To the extent they are applicable to the Company, the Board continues to employ the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations 4th Edition (‘the Principles and Recommendations’). These Principles and Recommendations determines the standards for our Company to follow as we continue to introduce elements of the governance process. More information on how we uphold to the Principles and Recommendations can be found in the Corporate Governance Statement, held on the Company’s website: https://www.lithium-au.com/corporate-governance/ Our Company Lithium Australia Board of Directors Audit & Risk Committee Remuneration & Nomination Committee Managing Director Lithium Australia Corporate Governance At Lithium Australia, we adhere to robust standards of corporate governance and strive to deploy the highest standards of corporate behaviour, accountability, and responsibility. Our companywide Corporate Governance Plan, held on the Company’s website (https://www.lithium-au.com/ corporate-governance/), establishes the basis of this comprehensive system of standards, principles, and policies. Battery Recycling 'Envirostream' Our Board of Directors act in the best interest of the Company and strives to conduct business in a responsible manner that will drive high levels of performance across the Group. The Board maintains oversight of all activities and risk, including those related to sustainability. In carrying out its role, the Board must ensure that the Company complies with all its contractual, statutory, and other legal obligations, including the requirements of regulatory bodies. It is the role of senior management to manage the Company in accordance with the direction and delegations of the Board. To ensure operations are conducted appropriately, the Board will review and approve the Company’s financial status, systems of risk management and internal compliance and control. 16 LITHIUM AUSTRALIA SUSTAINABILITY REPORT 2023 Battery Materials 'VSPC' Lithium Chemicals 'LieNA®' Formalised policies and procedures have been approved by the Board and are consistent with our objectives of acting ethically and responsibly across all areas of business. The Audit and Risk Committee '(ARC') and the Nomination and Remuneration Committee act as sub-committees to the Board, assisting to perform some of its responsibilities. ('ESG') oversight is ma