Dear Valued Shareholders,
 
In 2025, the global economy navigated a path intertwined with recovery and volatility. Geopolitical tensions and trade protectionism continued to pose challenges to global supply chains. Despite the complex and ever-changing external environment, the Chinese economy demonstrated strong resilience, supported by the Chinese government’s prudent economic policies and the robustness of domestic demand. Notably, in strategic emerging sectors such as new energy and new materials, policy dividends continued to be released, creating vast opportunities for the highquality development of the manganese industry.

Looking back to 2025, the manganese industry experienced a year of significant fluctuations. The year began with rapid price increases driven by supply-demand mismatches, followed by a correction in the second quarter. A resurgence driven by policy and cost factors restarted the upward trend in the third quarter, while the fourth quarter saw a divergence in market performance. The manganese ore market maintained a relatively strong trajectory, whereas the traditional manganese alloy market faced challenges from margin compression. As a major global producer and consumer of manganese, China’s manganese industry
demonstrated strong developmental resilience in 2025. Notably, the explosive growth in demand for manganese products from the new energy sector—a structural shift—is fundamentally reshaping the global manganese industry landscape.
 
Cost Efficiency, Transformation and Upgrading
 
In 2025, in the face of a complex and volatile market environment, our Group united as one, overcame challenges, and embraced the twelve-character guideline of “increase capacity, reduce costs, promote savings, and strengthen management” across the organization. By optimizing production and sales strategies, enhancing governance structures, advancing project construction, and implementing cost-reduction and efficiency-enhancing measures, we achieved remarkable operational results.
 
During the year, the Group also steadfastly pursued the primary task of high-quality development, focusing on its core business and making targeted efforts to cultivate and develop new productive forces. The technical transformation projects at the Daxin Branch and the Chongzuo Branch were successfully completed and put into operation during the year. This milestone not only represents the Group’s deepening transformation towards “green, high-end, and intelligent” development, but also establishes a critical industrial chain connecting manganese resources to new energy materials. It has injected powerful new momentum
into the Group’s evolution from a “resource-exporting” enterprise to an “innovation-driven manufacturer”.
 
Forging Excellence, Leading Innovation
 
Dedication fosters expertise, and innovation drives development. The Group has consistently upheld the spirit of the craftsman as “ten years to sharpen a sword”, and remains deeply committed to its core businesses of electrolytic manganese metal and electrolytic manganese dioxide. Through decades of focused development, the Group has undertaken technological breakthroughs in key areas such as the efficient utilization of low-grade complex manganese ores, clean production of electrolytic manganese, and the preparation of high-purity materials. We have established an innovation system anchored by a regional-level R&D platform and a post-doctoral workstation, while deeply promoting industry-universityresearch collaboration. Through continuous technological innovation and process optimization, the Group has not only achieved a leading position in production capacity within China but has also made industry-recognized breakthroughs in enhancing product purity, reducing comprehensive energy consumption, and overcoming environmental bottlenecks.
 
Regional Cooperation, Global Footprint
 
In early 2026, the Guangxi-Hong Kong Cooperation Promotion Conference was held in Hong Kong. Hong Kong is an international financial center and a crucial window for opening-up, while Guangxi stands as a frontier for ASEAN cooperation. Deepened cooperation between Guangxi and Hong Kong presents new opportunities for the development of Guangxi’s manganese industry. As a representative of Guangxi’s manganese industry chain leader, the Group will leverage the momentum from the promotion conference, carefully review the outcomes of the exchanges, fully play its role as a leader in the manganese
industrial chain, and actively connect with high-quality resources in the Guangdong-Hong Kong-Macao Greater Bay Area. We will continue to focus efforts on the R&D of manganese-based new energy materials, industrial chain coordination, and cross-border investment cooperation, driving Guangxi’s manganese industry towards highend, green, and intelligent transformation. At the same time, the Group will actively build a bridge for manganese industry cooperation between Guangxi and Hong Kong, contributing to the deepening of practical cooperation, assisting Guangxi in building a modern industrial system, and fostering a China-ASEAN community with a shared future.

Concurrently, our footprint extends beyond China’s southern borders to the distant African continent. In Gabon, the Group’s overseas team has overcome multiple challenges, including geographical and cultural differences, advancing project operations with a high degree of professionalism and dedication. Their efforts have laid a solid foundation for the Group’s resource security and internationalization strategy. Their perseverance and contributions in a foreign land embody the pioneering global vision of the South Manganese team, building bridges of cooperation and mutual benefit between China and Africa through their tireless efforts.
 
Community Engagement, Social Commitment
 
During the year, the Group actively participated in social welfare activities, supporting the development of neighboring communities. Our subsidiaries and branches contributed to local infrastructure, new rural development, transportation, and education. During festivals, we procured and distributed goods to support traditional village activities. We assisted local governments in rectifying small-scale, unregulated mining operations and supplied diesel fuel for border police patrol vehicles, helping to strengthen grassroots support. The Group’s foundation made a generous contribution to support post-disaster relief and reconstruction following a fire in Tai Po, Hong Kong. Our overseas operations also embraced their social responsibilities: the Gabon company donated medical equipment and drilled wells for the local hospital, improving local healthcare access, and provided cables to neighboring villages, resolving lighting issues, thus building cross-border bridges of mutual assistance through tangible actions.

We are dedicated to improving both our factory environments and the well-being of local communities. Staff dispatched from the Group’s headquarters, together with nearly a hundred employees from the Daxin Branch, participated in a voluntary “Land Reclamation, Greening the Mining Area” initiative, planting over 500 trees. We promoted the “Three Beauties Factory” initiative (beautiful environment, beautiful workplace, beautiful life), and provided staff with amenities like a workers’ home and a library recreational space, creating a relaxing environment for employees. Our subsidiaries and branches are committed to cultural development, enriching employees’ lives with diverse activities and strengthening corporate cohesion.

United in Purpose, Forging Ahead with Action

On behalf of the Board of Directors, I would like to extend my sincere gratitude to all directors, management, and employees for their dedication, hard work, and unwavering efforts throughout the year. I also wish to thank our shareholders, customers, and business partners for their steadfast trust and support.

The year 2026 marks the beginning of the “15th Five-Year Plan” period. A strong start is crucial for the Group’s future development. Considering the current landscape, the Group will continue to: deepen the integration of Partybuilding culture with production and operations to foster a cohesive force; focus on capacity enhancement and cost management to solidify our development foundation; accelerate the construction of key projects to strengthen our growth momentum; and enhance talent development, leveraging expertise and inspiring talent vitality.

In the new year, we will plan with the foresight of a “thousand-mile horse”, deepening independent mining operations and accelerating project construction. We will act with the dedication of a “workhorse”, steadily advancing digital transformation while reducing costs and improving efficiency. We will move forward with the steadiness of a “sure-footed horse”, firmly securing the Group’s development foundation. Let us continue to embody the “dragon horse spirit”, united in purpose, pragmatic, and resolute, as we join hands to open a new era of high-quality development for the Group.

A year of achievement is behind us; a year of even greater promise lies ahead. With unwavering determination, pragmatic action, and enthusiastic commitment, let us join hands, forge ahead with courage, and collectively embark on a new, brilliant, and splendid journey for South Manganese!

Zhang He
 
Chairman
 
13th March 2026