Dear Valued Shareholders,

Looking back on 2023, although the global economy experienced several negative shocks and increased geopolitical risks, the global economy still grew steadily. The China’s economy is gradually moving towards a critical stage of recovery, transformation and upgrading.

In recent years, China’s manganese industry has shown a trend of gradual optimization and steady improvement. China has increased its efforts to protect manganese ore resources and strengthened the supervision and management of the manganese smelting industry. At the same time, China’s manganese smelting industry is also constantly optimizing to improve the quality and added value of manganese products. The Chinese government has issued a series of policies related to the manganese industry, which have played a positive role in promoting the development of China’s manganese industry, strengthened the control of electrolytic manganese slag solid waste, and promoted the transformation, upgrading and cleaner production of the industry.

The year 2023 that has just passed was the first year for comprehensively implementing the spirit of the 20th National Congress of the Communist Party of China. Guided by President Xi’s Thought on Socialism with Chinese Characteristics for a New Era, the Group consolidates and expands the results of thematic education, deepens the strategic deployment of the “five major business sectors”, and implements the work deployment of “five grasps and one reduction”, unites the employees, and overcomes various difficulties. Despite the difficulties, it has been very difficult to maintain the continued stability of production and operations. Revenue has reached a record high. Each business segment has more confidence and stamina to “withstand the cold winter and gradually develop”.

Hard Work and Steady Progress

The year of 2023 was also the 60th anniversary of the founding of the South Manganese Mine and the 13th anniversary of its listing in Hong Kong. On 21 December 2023, we held a simple but warm celebration at Daxin Manganese Mine, the birthplace of South Manganese. Guests and employee representatives from all walks of life gathered at the mine to review the unforgettable journey of the Company’s hard work, innovation and entrepreneurship, and also look forward to the bright future of the Group. We have systematically summarized the “four major development achievements” achieved in the past sixty years, drawn up the development blueprint of the “five major business sectors”, and refined the unique “six major spiritual pedigrees” of South Manganese. All walks of life have given positive praise. The morale of the majority of employees is high, and we are more confident and determined to inherit South Manganese’s business and start again.

Substantial Contribution and Industry Responsibility

During the year, the Group was identified as the “first batch of leading chain-owner enterprises in Guangxi” and the leading unit of the “Autonomous Region Manganese Industry Innovation Consortium”; the jointly applied “Guangxi Key Laboratory of High-Value Utilization of Manganese Resources” was approved to become a key laboratory in the autonomous region laboratory; the “South Manganese” brand ranked 435th on the list of “China’s 500 Most Valuable Brands” in 2023, leading the national manganese industry; ranked among the top 50 metallurgical and mining enterprises in China Ranked 10th and 42nd among the top 100 enterprises in Guangxi, the Group has made contributions to the highquality development of the manganese industry and local economy.

During the year, the Group as the leading unit in the industry, organized the defense against the EU’s electrolytic manganese dioxide anti-dumping case, and extended the establishment of the Guangxi Manganese Industry Trade Friction Workstation to safeguard the rights and interests of the industry and reflect the industry’s responsibility. We insist on maintaining the work of the Electrolytic Manganese Metal and Electrolytic Manganese Dioxide Innovation Committee, take the initiative to assume the responsibility of maintaining the safety and stability of the national manganese resource supply chain and industrial chain, and successfully hold the International Manganese Institute EPD Nanning Conference and the Manganese-based New Materials Summit Forum Shenzhen Conference, leading the promotion of sustainable and healthy development of the industry.

Strive Actively, Take Root and Work Hard

During the year, we used the spirit of “fighting” to overcome difficulties and expand the market, and the market share of EMD further increased; we used the spirit of “enterprising” to build a strategic platform for the development of new energy materials, and established Wuxiang Lake Research Institute and Guangxi South Manganese International New Energy Technology Co., Ltd. Using a “pragmatic” style to steadily promote the improvement of environmental protection governance, the foundation of green development is more solid; using “work hard” tenacity to promote the development of Zunyi Company out of difficulties, leasing the production of electrolytic manganese metal, achieving zero breakthroughs in resuming work and production.

During the year, Huiyuan Manganese was awarded the title of “National Green Factory” and “National Intellectual Property Demonstration Enterprise”, Daxing Dameng Co., Ltd and Guangxi South Manganese International New Energy Technology Co., Ltd. were awarded the title of “Autonomous Region Safety Culture Construction Demonstration Enterprise”, and Dameng Investment Co., Ltd is the first pure trading enterprise in Nanning to pass the AEO advanced certification. Several members of the group have been awarded the Guangxi Zhuang Autonomous Region May 1st Labor Medal, May 1st Labor Certificate, and Worker Pioneer Award collectively.

Looking Forward to The Future, The Mission is Far from Completion

At the moment of harvest, we should not forget the hard work and sweat. These achievements are the result of the hard work and united hard work of all employees. On behalf of the Board of Directors, I would like to express my sincere gratitude to all directors, management and all employees for their united efforts, concerted efforts and hard work. I would also like to express my sincere gratitude to all shareholders, customers and business partners for their continued trust and support of the Group this year!

The year 2024 marks the 75th anniversary of the founding of China and is a critical year for achieving the goals and tasks of the 14th Five-Year Plan. We will continue to thoroughly implement President Xi’s major strategic requirements for Guangxi, “emancipate the mind, innovate and seek change, strive for strength and open development towards the sea”, and seize the major development opportunities of “becoming the largest manganese-based new energy material base in the country”, with a confident attitude of starting again after 60 years of innovation and entrepreneurship, overcoming difficulties, seizing every day, putting the Group’s major decisions and deployments into action and seeing results. I believe that with the joint efforts of everyone, we will be able to leap forward and move forward bravely!


Li Weijian
Chairman
19 March 2024