Anglo American Aktie

Okay. Good morning, everyone, and a very warm welcome to Anglo American's 2025 Results Presentation. Just a few words from me before I hand over to Duncan and John. Of course, first, as always, safety. It's our very first value and our #1 priority, and we are making very, very good progress. We recorded our lowest ever total recordable injury frequency rate last year. But in spite of this great progress, we actually had two workplace fatalities last year, tragic and of course, unacceptable.

Duncan will mention this and talk a little more about it in his presentation, but let me add that we cannot and will not rest until we are consistently achieving zero harm. So now as many of you know, 2025 was a year of transformational progress at Anglo American. We've executed major portfolio changes to unlock substantial value for our shareholders, and that has paved the way for what we now see as the next step in our journey and our strategic phase of value creation. And that is, of course, to form a global minerals champion in the shape of Anglo Teck, setting up exceptional investment exposure to copper in particular.

Now whilst offering compelling value, of course, through the exceptional synergies, both industrial and other, this combined entity will be set up also to create long-term value based on the many things that these two companies have done so well over so many years, focusing on safety and health, being responsible and inclusive, environmental stewardship and social progress for our many stakeholders.

Our Board looks very much forward to progressing this formidable combination towards completion once we have received the final outstanding approvals. Briefly on Board changes, Anne Wade joined our Board at the beginning of last year as a Nonexecutive Director, joining also our Audit and our Sustainability Committees. She's already made a significant contribution to our Board discussions, particularly bearing in mind her deep buy-side capital markets experience. And then in December, Hixonia Nyasulu stepped down after 6 years with the Board, and we thank Hixonia for her many contributions to our discussions over that time. Thank you. That's it from me.

Let me now hand over to our CEO, Duncan Wanblad. Duncan?

Good morning again to everybody, and thank you for that introduction, Stuart. As Stuart said, a pretty big year for us in 2025 and one that I do think was pretty transformational in the context of Anglo American's history. We had significant strategic delivery, laying very strong foundations for the next phase of our journey, which will be in the form of Anglo Teck. Now those of you who are regular attendees at our results will recognize this slide particularly. It is the 3 pillars of our strategy, which is operational excellence, portfolio optimization and growth. And these are the key drivers of how we move this business forward. And 2025, as I said, was a year with substantial execution progress against each one of these three objectives.

My pages got stuck together, so I nearly got to the conclusion. Questions, Jason.

Starting off with operational excellence. Our focus was unwavering here and I believe continues to drive the right results for us. We've got very high-quality assets, and we are running them very well with a focus on maximizing returns for the long run, which is after all and after safety, the most crucial deliverable for our shareholders. Our copper and iron ore businesses have performed very well, delivered on their 2025 production guidance with effective cost control across the businesses, seeing us deliver our cost savings targets, and John will talk about those a little bit later.

Now these cost savings were supported by the delivery of the recent head office transformation program that we ran, which resulted in a 21% headcount reduction. The growing stability in our asset base is allowing us to better identify and manage risks early and also to increasingly realize opportunities within the businesses. The evolution of our culture to prioritize and drive local accountability, where people on the ground actually have the power to shape the best outcomes is enabling these results.

The portfolio optimization also took great strides forward during the course of last year, and I'm thrilled with the execution of the PGMs demerger. The successful demerger of Valterra and the full sell-down of our residual 19.9% stake has helped to unlock material value for our shareholders. And of course, very helpfully, we raised approximately $2.5 billion out of those sell-downs, which went a long way to helping us delever our balance sheet. We continue to work towards streamlining the business, and I'm going to talk a little bit more on that later on when we get to the transactions underway.

Copper is absolutely at the forefront of our growth ambitions. Finalizing the agreement with Codelco to implement a joint mine plan for our adjacent operations, Los Bronces and Andina, was a truly remarkable transaction. It in and of itself unlocks $5 billion of pretax value across the complex and more copper tonnes for both companies as well as for Chile with minimal incremental CapEx. We've demonstrated what is possible when we can come together as an industry and partner with each other, and that translates, I believe, into compelling industrial synergies with huge significant upsides. And finally, we announced the merger with Teck to create a global critical minerals champion. The merger will position us in an increasingly competitive landscape to be able to create substantial value through industrial and financial synergies and cement the combined company as a world-leading copper producer.

Now since announcing the merger in September of last year, we've made very good progress in forming Anglo Teck. Over the recent months, we've achieved several major milestones. First, overwhelming support from our shareholders on both sides. Several major regulatory approvals have already been secured, including the approval under the Investment Canada Act at the end of last year. Our focus now is, of course, moving to integration planning, and that is progressing at pace as we work together with Teck to find the optimal organizational structures, the optimal systems and processes that will make this the most outstanding business in the sector.

We have had fruitful conversations in the context of integration planning. As I said, the new Board and management team will be formed on completion, and we are aiming to hit the ground running in Vancouver from day 1.

I will continue to oversee the crucial integration work together with Jonathan, that our teams are now progressing jointly ahead of closing. I would hope that everyone will understand that this is going to now take some time during the course of this year, which will mean that we're not going to have a lot of new news publicly certainly anyway until we get much further along this process. We still do expect completion around 12 to 18 months from the date of announcement. So closing, our best estimate remains now somewhere between September of this year and March of next.

Real process is still to happen are the regulatory processes, which includes China. So we've got South Korea and China to go. These processes are on track, and we'll update you all as that happens. Once these processes are cleared, we would expect the path to completion to be relatively swift with the $4.5 billion special dividend payable to the Anglo American shareholders of record on or around completion. I remain really excited by the benefits that this merger is going to deliver.

Now moving to safety. And as Stuart said, this is absolutely our first priority and will continue to be our first priority. I've said it before, and I'll say it again, there isn't a single tonne of any material that we produce that is worth the cost of a human life. And during the first half of this year, we sadly had to report two fatalities in separate incidents at our managed operation. One was in Brazil, a projects contractor working on our filtration plant in Minas-Rio, who fell from heights and the other in an LHD accident in Unki in Zimbabwe just prior to the demerger of Valterra. These tragedies weigh very heavily on all of us and in the starkest terms, I think, remind us of the critical importance of running a safe business.

There is always going to be more work to do, but I am encouraged by the improvement that we're seeing in our injury rates across the business with the frequency rates now, as Stuart said, down to the lowest recordable levels in the history of the company and 20% lower than they were last year. We're driving on the right path with the right trajectory, and this is enabled by the critical action programs that we've installed in the business and further strengthen our focus on the most impactful safety actions as well as leaders having the time to spend in the field and more meaningfully engage with the frontline teams and specifically on safety.

In 2026, we're going to continue to strengthen that approach with our leaders and allowing them to spend even more time in the field. We do this by, as I said to you a couple of years ago, ruthlessly prioritizing their work and simplifying the work that they need to do, and that gives them time to properly engage with the people doing the work, not only in a one-way conversation, but in a two-way conversation that helps us understand better how we can design the work for people to execute. These changes reflect our unwavering commitment to safety as the foundation of stable, predictable and high-quality performance. We have more work to do here, of course, but the progress is clear and our focus remains firm.

Turning then to our operational performance and our outlook. I'm very pleased with the performance that we've seen in our copper business during 2025 and the fact that it met its production guidance. In Copper Chile, as you know, Collahuasi will be going through a much lower grade phase in 2026 with performance expected to improve significantly from 2027 onwards as they access the fresh ore in the Rosario pit. Pleasingly, we are also seeing the benefits of our previous reset to the Los Bronces mine plan, and that has restored both optionality and flexibility within that business. The team has delivered really well on the development of Donoso 2. Donoso 2, as you all know now, is the next production phase of the mine, and it is characterized by much higher grades than where we're mining today and slightly softer ores. So coupled with the very strict cost control and discipline that's being embedded across the business, this has enabled us to reassess the economics of restarting the second plant at Los Bronces in light of the current copper price environment.

So we have now restarted that plant, and it will deliver cash-generative tonnes throughout 2026, but we will need to shut it down again, of course, at the end of the year because we need the water that we use to run that plant to move a tailings dam to be consistent with our GISTM commitments. That's the Perez Caldera tailings dam. We will then obviously have a lot more flexibility on restarting this plant again permanently when we combine the two mines, Andina and Los Bronces closer to the end of the decade. Our newest copper mine in the portfolio, Quellaveco, has delivered strong operational financial results with throughput exceeding the design capacity.

And while we continue to increase our understanding of this ore body, which is pretty typical for new mines, Quellaveco remains positioned as a high-quality, high cash flow generative asset, operating stably producing around 300,000 tonnes of copper a year in the coming years. And although Quellaveco is not going to have the same long-term grade benefit that will accrue to the likes of Collahuasi or Los Bronces over time, the mine is an absolutely key asset in the portfolio and provides a very strong base for expansion in Peru.

We are now entering a phase where we should see rising copper volumes without doing too much differently. The stripping at Collahuasi will have caught up, and we will be fully into Donoso 2 at Los Bronces. This should drive around 125,000 tonnes of lower risk growth in the short term. After 2028, we will be approaching the integration for our two major JVs, leading to the next leg of growth, which I'm going to speak about a bit later. And then the new Anglo TecK will also have substantial optionality into the future.

Turning to the iron ore business, which has been demonstrating consistent and strong performance. In South Africa at Kumba, preparations are now well underway for the UHDMS tie-in, which is set to happen later this year at Sishen. That project is progressing to plan and on budget, and we see the production will be down around 4 million tonnes during the course of this year as we do that tie-in because the DMS plant is offline as we do it.

We do, however, have -- I mean we have, however, prepared and do have ample stock available, which we will draw down on during this tie-in period, and therefore, we should see sustained sales volumes to similar levels of those that we achieved in 2025 as a result. This is a project that is going to significantly increase the proportion of premium quality iron ore as it ramps up to full capacity by the end of 2028 and allows for more flexibility in our mining. We retain conviction in the long-term demand fundamentals for higher-quality products, where we expect to see increased price realizations as steelmakers decarbonize and as steel markets evolve.

Our Brazilian iron ore operation at Minas-Rio has really been the star of operational excellence during the course of this year. Despite the impact of the planned pipeline inspection, which was conducted in August of this year, production was broadly flat versus prior year. This is a testament to the focus of the team on continuous improvement to optimize an integrated system. This operational effectiveness will especially be helpful from 2028 onwards when the mine transitions from its current ore body in the soft, friable ores into areas with much more feed variability. Work to integrate even higher quality DR-grade Serpentina resources to supplement the production in 2030 is progressing well.

Turning now to portfolio optimization. In steelmaking coal at Moranbah North, following a very long journey with a number of stakeholders, which include our own workforce, the regulatory authorities in the form of the RSHQ and other industry safety and health representatives were very pleased to receive regulatory approval for a remote start of these operations back in November of last year. And in the couple of weeks -- in the last couple of weeks, so beginning of February, we received the final lifting of the directives by the regulator, which now enable the mine to ramp up in the normal course to full production.

There is also good news from Grosvenor. We secured approval for the first stage reentry back in August, and that enabled visual inspections, which then confirmed limited damage to critical infrastructure as a result of the fire there several years ago. The teams are now developing plans for a restart, which could enable longwall production to recommence from as early as 2027 under new ownership. Off the back of solid operational progress and the strong inbound interest that we have received over the last few months, we restarted the formal sales process at the end of last year. The first phase of the new tender process commenced in early January with us aiming to achieve an announcement of a sale during the second quarter of this year, and we are targeting completion by the end of this year.

There is healthy interest in our steelmaking coal assets. Long-term supply and demand fundamentals remain relatively attractive for this sector and prices have recovered in recent days. In nickel, we signed a definitive agreement with MMG back in February of last year for proceeds of up to $0.5 billion. The regulatory processes to complete the sale for the business are continuing. And now we have the final stage to go, which is the European Commission, but they have progressed this now into a Phase 2 review. So both MMG and Anglo American are working very closely with European Union to ensure that they have a complete understanding of what we believe a transaction -- that this transaction means to the market and one where we believe it preserves and actually may even enhance market competition.

Lastly, a word on De Beers, where we have now a very well progressed and responsible exit in the advanced stages of discussions with a select group of interested parties. All of these parties are strategic, and we are at the back end of our formal processes. We continue to have very constructive discussions with the government of Botswana, who, of course, are going to be crucial in the determination of the endpoint of this process.

With respect to diamond markets, although we have seen stability in the end market for natural diamond jewelry over the last 6 months or so, the diamond market remains very challenged, exacerbated by the increased supply, specifically from Angola and tariffs-driven uncertainty. We are focused first and foremost on achieving a responsible exit, but we will continue to work closely with the De Beers team on the actions required to optimize cash flow performance, both now and over time.

And as I've said before, with some of the best diamond mines as well as resources and marketing capabilities in the world, De Beers is very well positioned to emerge and thrive as the market leader and as the market recovers. We continue to believe that there is significant upside potential to this business for the right owners, and we continue to keep the market abreast of these developments.

And with that, I'll hand over to you now, John, just to take us through the '25 financial performance and the guidance.

Thank you, Duncan, and good morning, everyone. I'm pleased with the financial performance of the business for this year. We delivered on our production and cost guidance as well as our $1.8 billion cost-out program and saw further reductions in working capital. This focus on total cost and cash is now firmly embedded throughout the organization and our performance management processes. These achievements are all evident in our financial results. But of course, as we progress through the portfolio transformation, the financial reporting again is complex. This slide aims to try and help navigate through that complexity. Our continuing operations include our end-state simplified business, but also include De Beers at least until the sales process is further advanced. While our discontinued operations include PGMs up to the demerger in May of last year as well as steelmaking coal and nickel.

So continuing operations EBITDA of $6.4 billion and earnings of $0.9 billion are not fully reflective of the high-quality financial profile of the go-forward business. The simplified business focused on copper and premium iron ore delivered $6.9 billion of EBITDA, 44% EBITDA margin and underlying earnings of $1.6 billion, benefiting from strong realized prices and delivery of our cost savings. De Beers reported negative $0.5 billion of EBITDA, and I'll come back to that in more detail later. The discontinued operations generated $0.1 billion of EBITDA in the year, reflecting 5 months of earnings from PGMs before the demerger, partially offset by losses in steelmaking coal following the operational incident at Moranbah North.

The effective tax rate for continuing operations was 52%. This reflects the impact of De Beers rather than any underlying tax rates with the go-forward simplified portfolio tax rate being 39%, as I'll explain shortly. The combination of continuing and discontinued operations has resulted in underlying earnings per share of $0.54, which translates into full year dividends of $0.23 per share, in line with our 40% payout policy. That includes the final dividend declared by the Board of $0.16 to be paid following shareholder approval at the beginning of May.

I'll now move on to talk through each of these areas in a bit more detail. Starting with the simplified portfolio, we've delivered a strong set of results. Our basket price was up 2% as higher LME copper prices were partially offset by lower benchmark iron ore prices. Realized prices, however, were up in both businesses, benefiting from provisional pricing impacts. Production was down 4%, mainly due to lower ore grades and recoveries at Collahuasi as we process stockpiles while developing the mine towards the sustainable higher grades expected from late 2026. There was also an impact from lower plant throughput at Los Bronces as the smaller processing plant was on care and maintenance.

Despite the lower production, revenue increased by 4% due to the higher realized prices. And when combined with our focus on costs, this flowed through to generate EBITDA of $6.9 billion, a 9% increase year-on-year. As you can see from the slide, copper and premium iron ore contributed $4 billion and $2.9 billion, respectively. Consequently, our EBITDA margin improved 2 percentage points to 44% with return on capital also higher at 17%, underlying earnings increased by 1% to $1.6 billion with higher net finance costs, partially offsetting the benefit from a lower effective tax rate with a simplified portfolio of 39%. This reduction in tax is driven by a lower unrecovered corporate costs and is broadly reflective of the blended rate across our operating jurisdictions.

Looking specifically now at our unit costs. In copper, we benefited from lower TC/RCs, partially offsetting the impact of lower production from Collahuasi. Quellaveco delivered another standout performance with unit costs of only $0.89 per pound. In our premium iron ore business, Kumba was broadly flat year-on-year, while Minas-Rio incurred higher costs from the planned pipeline inspection activities. And as you've heard me before say, I know the industry focuses on unit cost reporting, but we are focused on managing the total cost base. And on that basis, I'm pleased to show only a 1% increase year-on-year, reflecting good cost management across the business as well as the impact of lower volumes, which offset the impacts of stronger producer currencies, CPI and one-off impacts such as increases in rehabilitation provisions.

Looking now into the drivers of our continuing EBITDA after stripping out the impact of De Beers. Favorable realized pricing in copper and premium iron ore resulted in a $1 billion EBITDA uplift. That was partly offset by the stronger South African rand and CPI inflation, which together impacted EBITDA by $0.3 billion, while lower volumes from Copper Chile had another $0.3 billion impact. However, I'm delighted once again with our focus on cost savings this year. We realized gross cost savings of $0.6 billion, while cost headwinds of $0.2 billion, primarily from additional stripping at Collahuasi were fully offset by that $0.2 billion benefit from lower copper TC/RCs. The other bucket mainly reflects the nonoperational impact of increases in long-term rehabilitation provisions for Copper Chile, bringing EBITDA to $6.4 billion.

Over the last 2.5 years, we've committed to delivering total cost savings of $1.8 billion across our business operations, corporate overheads and initiatives. As a reminder, in 2024, we realized $1 billion of savings and at a run rate of $1.3 billion coming into 2025. We targeted to realize an incremental $0.5 billion in 2025 and have managed to deliver slightly ahead of that at $0.6 billion. That reflects $0.2 billion of operational savings from the business as well as $0.4 billion from corporate restructuring and initiatives. So we now stand with realized savings of $1.6 billion, and we've executed all the initiatives needed to achieve the total $1.8 billion, with the final $0.2 billion before the impact of dissynergies also of around $0.2 billion to be realized in 2026. Of course, we've embedded a strong cost culture through the organization and our core processes, which will support continuous improvement going forward, including through the Anglo Teck integration process.

Now moving on to our exiting business, starting with De Beers. Market conditions continue to be challenging, driven by the impact of lab-grown diamonds, U.S. tariffs and increased supply. As we came into the year, we were very focused on ensuring that De Beers was self-sufficient from a cash perspective. This meant that we undertook initial cost-out initiatives and drove inventory down by both managing production closely and responsibly increasing sales. You can clearly see the impact of these actions in the results. Sales volumes and revenues are up despite lower prices, while unit costs are down 8%. These actions could not offset the lower pricing environment, and so EBITDA was a loss of $0.5 billion compared to breakeven last year. However, the fact that we fulfilled a large portion of those sales from inventory meant that we reduced that inventory by $0.9 billion in the year and kept the business at broadly cash breakeven. This means that we now have midstream inventory at broadly normalized levels.

As part of our year-end processes, we undertook an impairment review of De Beers and have recognized a $2.3 billion impairment within special items. This reflects our latest views on the near-term adverse macroeconomic conditions and industry-specific challenges. Since last year, the key changes are largely attributable to an extended period of lower rough diamond prices, driven by a slower differentiation of lab-grown and natural diamond markets, continued weak China demand and increased supply. The impairment, along with other movements in capital employed, brings the carrying value of De Beers as a whole to $2.3 billion, of which our attributable share is $1.9 billion.

As we move into 2026, we will continue to focus on cash preservation. With less opportunity to release cash from inventory, we will be very focused on taking action to reduce structural costs and capital as we transition through this challenging market period and towards exit.

Briefly touching on our discontinued operations, EBITDA was $0.1 billion, reflecting lower PGM's earnings with only 5 months consolidated in 2025 and those 5 months being impacted by the flooding at Amandelbult. This was offset by a loss in steelmaking coal, given the impact of Moranbah and Grosvenor. This translated into an underlying loss of $0.3 billion. There was then a loss on demerger of PGMs that we reported in the first half of $2.2 billion, which drove the statutory loss of $2.5 billion. The net impact from the discontinued operations was a net cash impact, sorry, from discontinued operations was a $0.7 billion outflow for the full year, and I will explain this in a subsequent slide.

We continue to maintain a strong focus on cash generation. Our sustaining attributable free cash flow benefited from $0.6 billion working capital inflow, primarily from that reduction in diamond inventories. Excluding that benefit from De Beers, the go-forward business kept working capital broadly flat, which was a good achievement given the increased copper prices. This resulted in the conversion of operating profit to cash, including sustaining CapEx of 107% for continuing operations as a whole and 91% for the go-forward business. And this left sustaining attributable free cash flow for the year at $1.4 billion.

Moving on to net debt, we've seen a $2 billion reduction to $8.6 billion. The sustaining attributable free cash flow generated by the continuing operations of $1.4 billion more than funded growth CapEx as well as returns to shareholders. Discontinued operations resulted in a net cash outflow of $0.6 billion, reflecting the Jellinbah proceeds, offset by the impact of the PGMs demerger and the negative cash cost of steelmaking coal following those operational incidents. The overall reduction in net debt was therefore largely driven by the $2.4 billion proceeds from the sale of the residual 19.9% stake in Valterra, which happened in September and leaves net debt to EBITDA at 1.3x. Excluding shareholder loans, net debt stands at $6.8 billion.

The group continues to have a strong liquidity position, and I would expect to see leverage come down further as we conclude the remaining portfolio transactions, coupled with the strong underlying momentum in the go-forward business. On capital expenditure, we took decisive action in 2024 to reduce CapEx and rationalize the spend, and we've seen a 16% decrease in our CapEx in continuing operations to $3.3 billion, which was below our guidance. This has been supported by the establishment of our projects group, who manage a significant portion of our spend, thereby driving efficiency and effectiveness benefits across the group. Growth CapEx included $0.3 billion at Woodsmith as well as spend for the Collahuasi debottlenecking and the Kumba UHDMS project with a reduction year-on-year driven by our slowed approach at Woodsmith. Excluding De Beers, the CapEx for the simplified portfolio was $3 billion.

Turning now to our guidance. In 2026, our copper unit costs will increase to around $1.72 per pound from $1.50 per pound. This is mainly due to the impact of a stronger currency where we're assuming CLP 860 and PEN 3.2 to the U.S. dollar and in part due to the change in production mix between Los Bronces and Collahuasi. Our premium iron ore unit cost will be around $41 per tonne, once again, predominantly driven by stronger producer currencies with ZAR 16 and BRL 5.3 to the dollar incorporated, but also reflecting the tie-in of the tailings filtration plant in Minas-Rio.

On our other 2026 guidance, the group underlying effective tax rate for our continuing operations is expected to be between 44% and 48%, subject to the mix of profits and timing of the exit of De Beers from the portfolio. It's not shown on the slide, but our long-term guidance for the simplified portfolio, excluding De Beers, remains unchanged at 38% to 42%, in line with the 2025 outcome that I shared earlier. Continuing depreciation will be between $2.4 billion and $2.6 billion, a slight increase from 2025, reflecting some major projects coming online in copper, such as the Collahuasi desalination plant.

From a cash flow perspective, next year, we're expecting around $0.2 billion of restructuring and merger costs. And from a net debt perspective, we expect a one-off noncash impact of $0.5 billion from the recognition of lease liabilities associated with the Los Bronces integrated water solution project that will ramp up during this year.

Moving on now to CapEx. Clearly, all of our capital allocation decisions for 2027 and beyond will be shaped by the merger with Teck, which will only be determined by the new Board in the period post completion. As such, our CapEx and asset plans will, of course, be subject to revision in due course. But in the meantime, we expect CapEx for the next 3 years for the simplified portfolio to range between $2.6 billion and $3.1 billion, which is very close to our previous guidance. We also expect De Beers's CapEx to be around $0.5 billion in 2026, similar to previous guidance, but slightly higher than 2025 due to deferred spend at Venetia Underground, although we will obviously be keeping that under close review.

Sustaining CapEx for the simplified portfolio over the long term will be around $2 billion per annum with fluctuations over the next few years, reflecting modestly higher stay-in business CapEx across a few of the businesses. On our growth CapEx over the next 3 years relative to previous guidance, we're seeing lower capital spend come through in copper due to the Los Bronces/Andina joint mine plan and the potential Collahuasi QB adjacency as we pursue more capital-efficient options.

On Woodsmith, we will be spending less than in 2025, at $250 million of CapEx in 2026 and 2027, in addition to $50 million of OpEx as we continue to work towards having at least a real option for consideration over the coming years. This is, of course, still guided by our three conditions needed to move towards final investment decision. Those three options -- those three conditions being a completed feasibility study, having the project syndicated and our balance sheet being in robust financial health. This will be in 2028 at the earliest, at which time the Board of Anglo Teck will be able to consider this project within the context of the wider portfolio.

To finish off, I'll recap briefly on the key financial messages. Our focus on safe and stable operations as well as structured cost control is driving strong EBITDA margins across our copper and premium iron ore businesses. We've successfully delivered our $1.8 billion cost-out program with realized savings in 2025, slightly ahead of plan. Strong cash conversion reflects our focus on working capital management and capital efficiency. And together with the proceeds from the sell-down of our stake in Valterra, we reduced net debt by $2 billion with further deleveraging expected as we secure proceeds from the divestments of SMC, nickel and De Beers. All of this means we look forward with confidence as our reshaped portfolio will deliver higher margins, higher cash conversion and higher returns on capital employed.

Thank you, and I'll now hand back to Duncan.

Thanks, John. So turning now to the biggest component of our go-forward business, which is copper. If you go back 100 years and look at the copper returns on capital employed, it helps to contextualize, I think, the current copper price environment. So while copper prices may be at record levels in nominal terms at the moment, the increase is only now just starting to translate to the returns that we've seen in comparable historic situations. This makes sense in the context of the inflation in capital intensity and operating costs that has been experienced, especially since COVID. This is also very unlikely to be a short-term phenomenon given the combination of structural demand growth and the extended length of the capital cycle on the supply side, which has been key to extended upward trend patterns in the past.

This is where the inherent value in our portfolio of copper assets and growth pipeline optionality really shines through. We have world-class assets well positioned to benefit from this upturn. And for Quellaveco, for example, that means it's now on track to deliver a capital payback this year, only 4 years after first production, which in and of itself is quite an incredible milestone.

So this follows on well to the next slide, which says that the copper industry has generally been pretty awful at estimating costs for new projects. The chart on the left here shows that the average milled copper head grade for new greenfield projects is materially lower than the current installed capacity. But despite this, the estimated average capital intensity for new projects is at $19,000 a tonne, and that is materially lower than actual projects that have actually been built since 2010, which are at almost $30,000 a tonne adjusted for inflation.

So we have two key things going in our favor in copper. One is our project development and sustainability capabilities, and I'll talk about that on another slide in a moment. But second is that we have a much lower starting point relative to the intensity of our capital projects than the industry average. This difference in our growth profile where we will have the ability to develop less complex brownfield adjacencies should reduce the risks around the magnitude of the potential cost overruns that have consistently plagued the industry over time.

As we move through the merger with Teck, we will have a host of projects to choose from that further cement this low capital intensity base. One such option is the Collahuasi-Quebrada Blanca adjacency, which we've talked about in some detail when the merger was announced. The industrial synergies are really attractive there, and it is also very capital efficient. There is, of course, plenty of work to do to make this a reality, and that's getting underway now. The focus now is on working towards the right plan to optimize that value, and we are working with our other stakeholders to achieve this common goal. We have extensive experience in negotiating adjacencies, so we are well aware of the commercial considerations that will be required. This is an opportunity to drive substantial value creation for all.

Just to note, as it relates to the broader copper pathway, no decisions have been made about the sequencing of projects in the combined portfolio, and all of this will need to be planned within the capital allocation framework that we will have to put in place for the merged company. However, the slide highlights that we do have the benefit of many options to consider.

Our project delivery and development capabilities are the foundation of how we expect to create value from this growth pipeline. Our approach to project development is a fully holistic one. Our study and project teams are focused on investing both the time and the money upfront on the right type of analysis underpinned by years of expertise and experience in delivering well-sequenced brown and greenfield projects, which inform the optimal development pathways for the growth options that we have.

We believe that this rigor in our studies approach is a differentiator, enabling projects to be confidently delivered at pace. Given the recent uptick in commodity prices, we do expect that the industry more broadly is likely to rush to bring tonnes online. And history has shown that this less mature approach leads to having to build and adjust plans in the field as risks reveal themselves pretty late on in the execution. And therefore, you have less flexibility for adjustment, and that typically is much more detrimental to project returns.

The other side of the project development capability, which drives our differentiated positioning is sustainability. Our capabilities there have been built up over decades. Sustainability is not something that is stand-alone. Environmental and social considerations are deeply integrated into the way that we design and develop our mines, operate our assets, market our products and leave an enduring benefit, we believe, to the environment and the communities at the end of the life of a mine.

As a responsible operator with a long-standing reputation to match, we have the experience and track record, which helps secure our social license to build projects and supports our ability to access future development resources and opportunities, both from the significant endowments within our business as well as more broadly.

In the same vein, our sustainability strategy is designed to enable our business ambitions and is focused on three key themes that will be familiar to you certainly since 2018. These are being a trusted corporate leader, enabling a healthy environment and supporting thriving communities. We have been updating the strategy for our simplified portfolio, ensuring that it is aimed at protecting and creating value for the business and for all of our stakeholders with a real impact tailored at the local level, the communities and the natural environment around our operations where it matters the most.

Now to be clear, our update work has so far only been focused on Anglo American simplify portfolio, and we will now need to work together on the Anglo Teck sustainability strategy. This will, of course, need to follow completion of the transaction. But given the associated time lines of that, we wanted to provide the market with an interim update. And on that basis, a little later today, Helena Nonka, who is our Chief Strategy and Sustainability Officer, will be joined by Patricio Hidalgo, who is the Chief Exec of our Copper business in Chile; and Mpumi Zikalala, who is the CEO of Kumba in South Africa for a webcast panel discussion and Q&A on the way that we are evolving sustainability in Anglo American and why we believe that is a real enabler of value creation. So please do join that session and learn a little bit more about how we're putting all of this into practice.

In conclusion, we've had a truly transformational year. The business continues to embed operational excellence and leaves us well positioned to deliver strong performance in the coming years. We are working hard on the final elements of our portfolio transformation alongside the final regulatory approvals to create a global critical minerals champion. The merged company will have an outstanding portfolio with leading exposure to copper and other commodities and products with a structurally attractive outlook. That includes a variety of pathways to accretive expansion in shareholder value, including some of the most exciting adjacencies that exist in the mining industry today as well as a number of project development options.

We know there is plenty to do again this year, but we are completely energized by the opportunity and the belief that we are creating something very special here indeed.

And with that, Tyler, I'll hand over to you to moderate the questions.

Great. Thanks very much, Duncan. I see Liam is in the Golden Chair here today. So here you are.

Liam Fitzpatrick from Deutsche Bank. Just had 2 or 3 questions on Collahuasi and QB and kind of the timing and process. So I think you originally said you wanted to begin construction from 2028. So can you walk us through when you would hope to reach an agreement with Glencore and the other partners and when you would need to make the relevant permit license applications to meet that deadline?

I think Glencore has said recently that they would like to be a kind of equal owner with you in that future JV if that's where it heads. Is that a deal breaker? Is that on the table? And final quick one, has your team visited QB since the due diligence in the summer? And are you happy in general with how the TMF work is progressing?

Okay. Thanks, Liam. Look, the baseline for growth at Collahuasi is the fourth line. And that has a very key milestone in and around the back end of 2027, where you have to commit to the development of the fourth line. Once you start deploying large amounts of capital into a new plant, that starts to materially impact the viability and the returns associated with the combination of Quebrada Blanca and Collahuasi. So around 28 on current production rates at Collahuasi is when we would need to be sure that we are going down the combined mine path or we are taking a stand-alone fourth line pathway.

I mean it is clear to me that based on all the economics that I've seen of both of those options that the combined QBC option is by far and away the most attractive, not least of all because of the lack of complexity, relatively speaking, in terms of building that plant and infrastructure, but also because of the capital intensity associated with it. And that's a very big driver of returns in the copper mining industry. So on that basis, we really do need to get a crack on and we need to get the ownership arrangements sorted out. We need to get the shareholder agreements in place and move on.

I'm very well aware of Gary's wishes. We have had a conversation. So Gary and I directly, he's been very forthright in terms of what he would like at the end of the day. I have been similarly forthright as to what I would like at the end of the day, and now we are negotiating. I'm not sure what Gary will choose to do here, but I won't negotiate this in public. So we will just keep going until we've got a plan that makes sense for all shareholders and get it done as quickly as we can because the value at stake is pretty high here.

I don't believe we have actually visited [indiscernible] Quebrada Blanca since the diligence in -- just before the announcement in September. But I do know that we have provided some assistance to Quebrada Blanca on the technical side in terms of them working through the most optimal way to manage the paddocks around the development of the tailings dam and provided some advice and information to them on the cyclone modifications that they have just installed and seem to be operating okay.

We'll go to Ian [indiscernible] back and forth with Russouw equally.

Ian Russouw from Barclays. First question on Woodsmith. It would be great to get a bit of details around that and how the feasibility study is going in the shaft. And around the -- I guess, how should we think about this partnership? Obviously, you mentioned a 25% equity stake. Is that a fixed number? Or can that swing around? And then secondly, just on De Beers, obviously, it's been great to see the working capital release sort of help bring that cash flows to neutral. You won't have that card to play this year in a still challenging market. How can you sell a cash negative asset? Are you confident that you can do that? And how should we think about the structure? Should we think about a sort of low upfront value and then deferred sort of number contingent on the recovery in the diamond market?

Okay. On Woodsmith, the progress of the feasibility study. So I think last year, this time, we were pretty clear on the three requirements that we needed to get to a point where we could ever even contemplate a full notice to proceed sanction for the project. One of those was a feasibility study. The second was a syndication and the third was having a balance sheet that was robust enough to carry the development of the project in its syndicated form forwards. Specifically to your question on the feasibility study. So in accordance with the slowdown plan, it's progressed really rather well during the course of last year. So they got to about 30 kilometers on the tunnel of 37 kilometers with a single tunnel boring machine, and we got pretty well into those sandstones.

The outcome of that experience in the sandstones is that we can absolutely mine at more than a meter a day, which was the key determinant point in terms of whether it was going to swing one way or the other. There's more water than we would like in those sandstones for sure, but the drilling rate is fine or the cutting rate is fine to support the current economics in the feasibility study -- in the pre-feasibility study. And then as far as the syndication is concerned, of course, we're delighted that Mitsubishi has taken an option on this thing. They have invested quite a lot in this thing, both directly into the project, but also in their own understanding of the end markets themselves. So Mitsubishi have now got a reasonably well-developed trading desk in fertilizers. They've developed an understanding and knowledge of this. And I think that, that gave them enough confidence to acquire an option for a 25% stake in the project if and when it gets to feasibility study. So I think that that's very positive on a momentum basis, but still a long way to go given the timing to get to feasibility.

I mean just on feasibility, the next hurdle now having understood the sandstones and the impact of sandstones to the project is to get close enough to the ore body, so we can put some lateral long holes on top of the ore body with some deflections down into it, and so we can start to characterize and define the detail of the ore body to help us develop a mining plan that will ensure the payback period if we sanction the project. And I think as John said, given all of that stuff that's going on, I mean, it's running exactly as per the slowdown plan at the moment, no chance of any of that happening before 2028.

On De Beers, regarding the working capital release, yes, I think Alan and the team did a really good job of that. And as John said, we now have inventories that are down more at sort of normal levels, the consequence of which is whilst there's probably still a little bit that we could do there, it won't have the same impact in 2026 as it did during 2025. The consequence of which is Alan and the De Beers team are looking really hard at other mechanisms of cash flow preservation during the course of this year. And some of those are going to be potentially big changes in terms of overhead costs and other areas of that De Beers have under management at the moment.

As far as the divestment process is concerned, I'm not really worried about that because the parties that we have in the divestment process all genuinely understand diamonds and diamond markets. All of them have deep experience in the type of cycles that are experienced in diamond businesses. And certainly, all of them recognize the deep value in De Beers and the quality of the assets that we have in De Beers, so not only the brand in the business, but also the quality of the underlying assets, particularly the Botswana assets. So I don't think that this has a material impact in terms of where we are in terms of the desire for a strategic buyer for the business. Of course, that will play through into the structure of the proceeds that you get for the business because if the business is cash flow negative for a while, it will need to be funded for a while. And I suspect that we will see some form of structure in the consideration of the business. So some upfront payment perhaps and then some contingent payments depending on the time it takes for the industry to recover.

We go to Ephrem?

Just a first question follow-up on De Beers again. I get it that like the participants in the bidding process are our industry veterans in the diamond industry. But at what point in time or at what parameters would you consider a spin-off or a spin-off to shareholders versus a demerger versus a sale? I mean, in terms of how much of that value deferral can you take versus a demerger. So I think just some criteria like the fertilizer, three points that will guide your decision, North Stars would be helpful.

Secondly, on copper, and the thematic in general, streaming has been a big sort of theme for all the diversifieds this result season. And you are one of the few people whose cost is actually going up year-on-year from a guidance perspective, presumably due to lack of precious metals credits. Is there some rabbit in the hat that you have, which we are not aware of where you could kind of stream and surprise the market?

Let me deal with that one first. There aren't really any rabbits in the hat because the streaming of the minor metals is a function of what's actually in the ground and the resources that we have aren't well endowed with silver and gold, unfortunately. The fundamental underpin to the costs going up, as John pointed out on his slide, are driven by two factors. The first of these is that we have strengthening producer currencies relative to the dollar. But at the same time, it also reflects the mix of products that we have during the course of 2026 relative to 2025. But that mix also changes back again in 2027.

So we're producing from the lower grade, higher cost Los Bronces mine more proportionately than we would be from Collahuasi, just given that we're moving through that pushback phase and still reliant quite heavily on some of the stockpile production during the course of the year. But as we move now into in 2027 back into the fresh ore in Rosario, that cost profile changes again because we're in that better, higher-grade ore. And at the same time, in 2027, we will have moved more around the mine in Los Bronces, and we'd be producing predominantly from the Donoso 2, which is a higher grade phase of the ore and so the costs will adjust associated with that too. So those are the two primary drivers. And unfortunately, I don't have enough silver and gold in the ore bodies today. Quellaveco has some silver, by the way, and doing very well out of that.

Can I just add on the cost point on the -- on that point on some silver at Quellaveco, our cost guidance doesn't assume those prices are at sort of current levels. So more consistent with a little bit more conservatism given volatility. So if we were to see silver prices stay up at sort of current levels, then there would be some upside to that cost guidance.

Your question on the spin of De Beers is a good one and slightly complicated in the context of if we were to spin De Beers today, it would be a real challenge in the context of where markets are and where comparables are for a company like De Beers. And therefore, we've chosen to prioritize the strategic sale of the business. This does not remove the option of being able to list De Beers at a time in the future, but it's unlikely to be in the current market environment. And therefore, the sale is the priority that we are focusing on right now.

Go to Myles, and we'll come back after that.

Myles Allsop at UBS. With the demerger, is there anything that could go wrong now? I mean, how have your discussions with the Chinese regulators been progressing? Is there anything kind of that we should be mindful of? And then thinking about the $800 million, obviously, you're doing more work. That was an audited number. How much upside do you see to the $800 million? That's the first question.

Myles, so there is actually nothing to comment about in terms of the China regulatory process as it is at the moment. It's pretty much going as we expected it to do at this particular point in time. There have been no odd asks at all, and we're just in the process of providing the information that they've required under the usual process at this point in time. So as I said, we expected fully that this would take sort of 12 to 18 months. Nothing has changed our view on that at this point.

As far as the $800 million go, I don't have a new target that I'm putting out in the public at this particular point in time. Safe to say that cost management is a very key component of what we think makes a successful mining company going forward. And we are in the process of developing a really strong muscle on cost management throughout the business. And I think you should expect that to continue as we go forward. So whilst there isn't another target at this point in time, we are still absolutely working on bringing the overall operating costs in the business down. As John said, we are less focused on C1 type of costs because it's like a balloon, you squeeze it here, it pops out somewhere else. I care a lot about the total costs in the business, and that's what we manage on a day-to-day basis.

And then maybe just a bit like the streaming question, infrastructure, and other assets in the portfolio, things like water assets, obviously with one at Collahuasi. Do you see -- are you actively exploring other opportunities to kind of optimize value through the portfolio? Samancor as well, I guess that's always one that kind of sits in the shadows and there's potentially a pathway to some restructuring there?

Yes. So I suppose the simplest answer to your question is we look through the portfolio all the time and look for these value-accretive opportunities. And to the extent that they are genuine and are long-lasting in their effect and not just a sugar hit, we will pursue them pretty rigorously. So that includes having a look at the infrastructure options that exist throughout the portfolio too. But very often, you are kind of hooked up on the back of the fact that unless you have multiple offtakers on a particular set of infrastructure, it still all flows directly through to your balance sheet on a look-through basis. So it doesn't really change much other than add potentially a margin that you're going to have to swallow somewhere along the line. But where there are opportunities, where there are multiple offtakers and you can do something with the assets, and it doesn't compromise the viability of the current operations or the potential future viability of expansion or development of those businesses, we look at that very closely.

Samancor, I mean, that's manganese. As I've said it before, that's a wonderful option that we've still got in the portfolio. It's producing really well. So now having come back after the cyclones in Australia a year ago. It's a nice little cash producer. I don't feel like I'm in a great rush to have to restructure anything on that at this particular point in time. I think it provides good optionality within the portfolio on a future basis.

All right. Let's geographically go with Dom.

Dominic O'Kane, JPMorgan. I just want to touch on Codelco. So you have a very strong and a very close working relationship with Codelco. So is there any update you can provide us with on your Andina conversations, but also how do you sense the engagement with Codelco is maybe changing for your organization and the industry more broadly? Do you see more opportunities for your group and the industry more broadly to work more closely and pursue those type of opportunities that Codelco has at its disposal?

Yes. Thanks, Dom. Look, I mean, you're right insofar as we've had a very long-standing relationship with Codelco given that they have been a partner of ours for many, many years now on Anglo Sur, which is on Los Bronces, El Soldado and the Chagres smelter. And certainly, through many years of that sort of partnership, the operational relationships have been excellent. So even before we did the Los Bronces/Andina deal, we had to work very closely with them in terms of managing operational interfaces on the border of Andina and Los Bronces, and that was generally very effectively done by the two general managers and the people working for them.

What we were able to do with the synergy and liberating that wages that exists between the two, dropping the huge expansion CapEx load on both sides of the fence, I think, is very much a function of how Codelco has been thinking for several years, certainly under the leadership of Maximo Pacheco. Given that these were hugely value-accretive opportunities for Codelco, very commercial in the way that they approached it and thought about it and just certainly given how I perceive it has been accepted nationally in Chile and within the various arms of government, I can't really see why that should change in the future.

Of course, we know we are going into a phase now where there's a new government in Chile and there could be some changes in the leadership of Codelco. But I think what fundamentally underpins, what's happened today is a very hard core commercial rationale and Chile is still very, very positive foreign direct investment growth and copper growth, particularly.

Jason?

Two quick ones. First one is on BHP. So you had a brief follow-up with them in November. Some investors were surprised it was so brief. So I don't know if that's a question for you or for the Board?

And maybe for Mike. No, I mean there was -- it was a conversation that was had and neither party felt it was worth pursuing after that conversation.

Okay. Second one, just to follow up on our favorite salt mine. How do you justify putting more capital into this when you're trying to capture a re-rating based on being seen as more of a copper pure play?

So it certainly is completely consistent with the strategy that we laid out and presented to the market in the middle of 2024. There's no new news in terms of this particular story, and it is the best value-accretive option that we've got for that asset. So it just makes sense in terms of option preservation to get it to a point where we rarely do know whether we can or can't take it forward from an investment point of view. Otherwise, it would be a massive write-off and that wouldn't make any sense given the direction of travel and what we understand of that asset today.

Can you just remind us the carrying value and the Sun Capital in the asset, Dunc?

John, can you?

Yes. We've -- the carrying value today is just around $2 billion and total invested capital over the period is about $5 billion.

Matt, please.

It's Matt Greene at Goldman Sachs. Probably just continuing Duncan with Woodsmith. You touched on the fact that you want to get through the sandstones to get to a technical point to underpin the feasibility study. You're now going and seeking $0.5 million to go that little step forward. So it sounds like this agreement with Mitsubishi that you're still taking on a lot of the risk here. So what do they -- do they need to see anything in particular here? And I guess just when it comes to bringing in further partners and syndicating here, are you -- what are you looking for in a partner? Because -- is this just a financial partner? Or are you looking at someone that's going to take perhaps disproportionate risk on the marketing side of this product?

No. So I think Mitsubishi are looking for exactly the same things that we're looking for in terms of a feasibility study. One is continued confidence in an ability to build the market for the product. And as I said earlier, they have developed an in-house capability to test that. So it's hugely validatory from our perspective that it's not just us in an echo chamber about how we think this product is landing in the market and how effective it is in the market. We've got a genuine independent view of somebody else who's trying to look at it through the same sort of lenses that we are. And of course, they are absolutely going to need to understand what the capital cost for development of this project is on a go-forward basis, and what the risk inherent in the development of that project is, and that can only be determined by a quality feasibility study.

They do cost a lot these feasibility studies. I'm completely cognizant of that. And -- but the reality is that this was true for Quellaveco 2, slightly different scale, but we had to spend a lot of money upfront to fully characterize the risk that we had in that ore body and in the development of the infrastructure around that ore body to know for sure that we had a very high probability of meeting the capital costs within the contingency that we had specified for that project. And this is no different, right? I mean these are -- if you want a proper and a secure understanding of what these projects are going to cost and how much they are going to likely to be -- to return to you, you need to do the homework upfront. And so it is this trade-off of how much you spend upfront versus how much of a risk or a gamble you're prepared to take on imperfect information and data to go forward on a project.

We elect to spend a little bit more upfront to get much better security of information and data that then defines not only the execution period of the project, but also the life of the project. And I think that, that was well underpinned by what we saw happen at Quellaveco, not only during the project development and execution phase, which is one of the very few projects in the industry in recent times that was absolutely on time and on budget. But not only that, it did kind of what it said it was going to do on the [ tin ] and reduced an 8-year payback period to a 4-year payback period. I mean that is real value going forward. And that's sort of what I believe Mitsubishi is looking at in the same way that we're looking at, very like-minded, right? Bear in mind, Mitsubishi is also our partner on Quellaveco.

In terms of do we have criteria for other types of investors. So Mitsubishi now have an option to go up to 25%. They're not limited to 25%. So if they chose to, they could go more than that if they would like to. And we are absolutely open to bringing on at least one more partner. The idea here is that it's not only financial. I mean financial risk mitigation is a very big important part of that. That's exactly why we brought on a partner for Quellaveco. But at the same time, to the extent that we can leverage a partner's capabilities, particularly in the mid and downstream of this is where we'd like it to go. And as I said, Mitsubishi is developing that capability. They have a very strong trading capability in that business anyway. So they have access to markets and are learning quite a lot about the product, too. So it's that type of partnership that we would see as very valuable going forward.

That's great. Sorry, if I could just have a follow-on on Collahuasi on the fourth line. Just to get your guidance next year, you had about, I think, $600 million on copper growth. Los Bronces was in there. Obviously, that's not happening anymore, and you had Collahuasi fourth line. There's no mention of that anymore. Should we read into that at all? This fourth line option has been floated around for 15 years or so. You presented your slides of how many options you have in the pro forma portfolio with Teck. If Glencore doesn't come play with QB, is there an option here that we could see the fourth line deferred again?

If Glencore doesn't?

Obviously, you want to get a QB scenario here. But is there a point that you actually decide as Anglo, you do not want to pursue the fourth line because you have alternative options?

No. Look, I mean, we'd never be churlish about this for sure. I mean what we're trying to do is, is mine the right resources in the right way and at the right time? The fourth line is an option, but it's certainly not the preferred option for Collahuasi. As I say, as I look at the pre-feasibility studies versus the concept studies and so on at this particular point in time, there is a much better option in terms of both risk and capital intensity by doing the combination of Quebrada Blanca and Collahuasi. I mean I would hope that all the partners would see it that way as we move forward. And certainly, I mean, that has been fundamentally the driver of the thesis for Collahuasi on all sides of the fence for a long time. It's -- now it is fundamentally how do we set up a new shareholders' agreement? How do we share the value of the synergies, and that's the negotiation.

We go to Chris.

Duncan, it's Chris LaFemina from Jefferies. So first, Jonathan mentioned yesterday on the call that you received U.S. regulatory approvals. You mentioned it again today. Is that like full Hart-Scott-Rodino, DOJ, FTC, U.S. regulatory approvals are done, which, in my opinion, would be a major step forward because of the fact that copper is a critical mineral now as per Congress and Teck's biggest shareholders are Chinese. I thought that would be a hurdle to getting this across the finish line. So are you fully done with U.S. regulations is the first question?

Yes. Well, certainly, all the regulations that we needed to have applied for consent under we have at this particular point in time. The only two outstanding are South Korea and China.

And then secondly, on Moranbah North, I think back in August, you said the run rate was costing you $45 million a month or something that was 6 months ago. In the last couple of months, has it been similar to that level? And then with the phased restart of the longwall now, and I think you referred to it as a structured restart of the longwall, what exactly does that entail? And what are the cost run rates on -- as you're ramping this thing back up?

Okay. John's probably got exactly the numbers, but of course, they will be lower for two reasons. One is from November, Moranbah South -- Moranbah North got back into production in a limited fashion, but there is actually coal being cut and it is being sold. That's point one. Point two, it's being sold into a higher price environment at the moment, which is also pretty helpful. But specifically, to your question about what is actually happening in terms of the ramp-up again at Moranbah North. First of all, the permission that we got to restart the mine in -- at the end of October last year, so really restart in November was conditional on the fact that when we were actually cutting coal with the longwall, we didn't have anybody underground.

Until such time as we got far enough away from what was believed to be the source of the incident. And during that period, therefore, we had to remotely operate the longwall, which is a good thing, right, because that's generally a more productive way of doing it over time. But because if you have a roof fall or anything that sort of impacts the whole chain and the longwall and so on, you have to stop. We had condition that said we had to see what happened to the atmosphere, the environment down there. They had to get to sort of stable levels in terms of carbon monoxide and then we could send people down. And so the gap between a stop and a restart was anywhere between 6 and 12 hours. So it's pretty unproductive.

We are now, as of the beginning of February, in a position that we can run the mine completely unrestricted in that context. We have an agreement with our own workforce to be about 120 meters away from where that incident occurred before we actually start running it in an unrestricted sort of fashion. We're at about 90 meters now. So another few weeks to a month is where we would now then be able to just start ramping up under normal conditions with the natural variations, which are attributable to that type of ore body.

Can we go to Alain quickly, if that's all right. And we keep it to one question from here on, as we've only got a few minutes left, if that's okay.

One question from my side, Duncan, is granted, you've got your hands full with completing the Teck transaction, but you've also got a very capable project team at Quellaveco. Do you see opportunities to leverage their capabilities in exploiting inorganic options such as partnership with other majors in Latin America where you can best utilize this team?

Alain, you are quite right. I have an absolutely capable team across all fronts. And certainly, [ Alan ] and the projects team are looking for every opportunity that they can as well as Helena and the business development team. And to the extent that there are opportunities for us, we would, of course, engage in those. They would have to fit all the criteria that we have in terms of how we allocate capital, how we manage risk in the business going forward. We don't have any external options that are on the table that you don't know about today in that space and particularly not in Peru at this point.

Tony?

Tony Robson, Global Mining Research. Possibly for John. Carrying values for De Beers, $2.3 billion. Could you remind us, please, I'm sure it's in the accounts. Is that before or after any debt within De Beers? Or is it net or gross? And secondly, any -- given it's a discontinued asset and you're much closer now to realizing its value or knowing what its value is, any accounting IFRS rules that say you have to market to market? So is that -- but I still assume it's on future prices, cost discount rates and so on, your $2.3 billion.

Yes. So the $2.3 billion is on an enterprise value basis. So of course, there is some intercompany funding within De Beers, but from a valuation perspective, that sort of nets out that sort of some capital from an Anglo American perspective. So the $2.3 billion, which is 100%, remember, not the Anglo American share is on an enterprise value basis. In terms of the accounting, then you have to sort of look at the fair market value and the value in use when you're doing your impairment assessment. So you have to take both of those things into account. So there is no absolute requirement to mark-to-market, but you, of course, have to take into account information you have around what that market value could be as you are forming the impairment assessment.

And we go to Ben and Alan quickly here.

Ben Davis, RBC. Just on De Beers, I was wondering if you could give us any color on the potential bidders. Has that settled down now? Has that bedded? It feels like we've had a lot of media reports of various government interest, consortium interest and how well financed those are? And also, are those consortium include governments, et cetera?

So they're all consortia that are involved. Some of them include governments and some of them don't. So there is a possibility that there will be -- our share will be sold in three parts potentially or two parts potentially. That depends on where we get to in the negotiation in the next few weeks.

Grant?

Patrick Mann from Investec. Can I just ask a little bit more on the time line? So it looks that the optimal scenario here would be dispose of steelmaking coal, close nickel and De Beers before Anglo Teck closes at the end of the year and pay the special dividend. Are you confident in the timing of that De Beers thing? Or could we see a scenario where Anglo Teck closes and you're still trying to exit De Beers post that fact?

And then I understand that your -- still your best estimate is 12 to 18 months. But given there's only two outstanding regulatory requirements, I mean, what is the soonest this could happen? I mean, could we wake up in a couple of months and it's done?

There is nothing in terms of the Anglo American portfolio restructure that is contingent on the completion of the deal with Teck. So the sequence that you described would be absolutely ideal if indeed we could make that happen. But there's no contingency of that to -- or contingents of that to the completion. So the consequence of that is that it is highly likely if the deal closes in that 12-month window, so around about September or so of this year, that De Beers will still be in the portfolio. I'm targeting, of course, to have it sold at that particular point in time, but it then will be running through its statutory and regulatory processes for completion. So it would be in Anglo Teck's portfolio until such time as it was gone.

In terms of the 12 to 18 months, I mean, I think theoretically, that there's not much change in that 12-month time. And therefore, that is the most likely period where we would expect it to be completed.

Very good. I think is that -- are there any other questions left in the audience? There aren't. Okay. Well, in that case, thank you very much for all of your questions at the end of a very long week. We really appreciate it. And I look forward to following up with you in due course. Thank you.

Thank you.

Ladies and gentlemen, thank you for standing by. Welcome to Anglo American and Teck Resources Merger of Equals Conference Call.

[Operator Instructions] This conference call is being recorded on Tuesday, September 9, 2025.

I would now like to turn the conference over to Duncan Wanblad, CEO of Anglo American; and Jonathan Price, President and CEO of Teck Resources. Please go ahead.

Thank you, Chuck, and good afternoon, good morning to everybody, and thanks for joining us at such short notice. Jonathan and I are delighted to be here together today in Vancouver.

Good day, everyone.

Please do refer to the cautionary statement and disclaimer with respect to certain non-GAAP measures that we will refer to. And further details are clearly available on our press release and on websites.

Today's announcement marks a truly monumental day for our mining sector. The merger between Anglo American and Teck Resources will create a world-leading copper and critical minerals producer that will create many billions of dollars of value for both sets of our shareholders. This is the most exciting corporate transaction that I have ever been part of and I certainly couldn't be more excited for our new joint future as Anglo Teck. This merger will allow us to continue the over 100-year legacy of both of our companies. and importantly, create a base that will allow us together to continue adding material value for our investors and stakeholders for decades to come.

This transaction has been designed to be a true merger of equals, and it is this unique partnership that will allow for optimal value in synergies and adjacencies to be realized from our portfolios for both sets of shareholders. The Anglo Teck will have more than 1.2 million tonnes of annual copper production anchored by 6 world-class copper assets with more than 70% copper exposure, making this one of the world's leading investable copper opportunities with scale. By bringing together 2 of the world's leading miners, we will have an enhanced ability to deliver strong operational performance. And it's not just about what we have been doing. This portfolio holds tremendous growth optionality for our disciplined approach and proven capabilities that will enable at expansion in the right way. and at the right time.

We have identified over $800 million in pretax recurring annual synergies. This is a substantial amount when compared to the size of the combined company. The recent simplification in our respective companies means that we are in a normal position to leverage the best in both of our companies. Anglo Teck deliver substantial operational efficiencies, will allow for commercial and functional excellence and will also benefit from economy sale. This will create billions of dollars of tangible value.

We have shown combining mining assets with industrial synergies is one of the most value-maximizing activities that you can deliver in the industry. The industrial logic of combining Collahuasi and Quebrada Blanca is undeniable. They're running by running higher grade and softer Collahuasi through the Quebrada Blanca plant, we will generate at least $1.4 billion uplift in annual average underlying EBITDA by delivering an incremental 175,000 tonnes of annual copper production on a 100% basis. This will come at very low capital intensity of around $11,000 a tonne. And today's announcement is a massive step forward to unlocking substantial value creation for both sets of shareholders and our other partners.

Anglo Teck will benefit from a strong balance sheet underpinned by a larger, more diversified asset base with increased cash generation potential. Combining these dynamics with a continued focus on capital discipline and operational resilience, we will create a framework that enables us to make the right long-term decisions through the cycle. We will also have an increased global capital markets presence with our LSE listing as well as listings on the Johannesburg Stock Exchange as well as the Toronto and New York Stock Exchanges.

We're also pleased to confirm that Anglo Teck's head office is to be based here in Vancouver. This makes logical sets. Our assets are mainly based in the Western Hemisphere, which means that our senior management will be in the right time zones. Canada is, of course, a country with deep mining expertise and a very rich history in the industry. Under Anglo Teck, we look forward to helping unlock Canada's vast natural resources and further accelerate Canada's economic ambitions. We will preserve and build on the proud heritage and strength of both companies in Canada and South Africa. Anglo Teck will continue to play a key role in the mining ecosystems of both countries drawing on our technical and sustainability expertise to support growth and investment ambitions, and we will leverage London's role as Global Center for Mining Finance.

And with that, let me pass now to Jonathan, who will run us through some of the transaction details.

Thanks, Duncan. Bringing our 2 companies together is fundamentally about driving value and creating a stronger, more resilient company. Anglo Teck will have a premier critical minerals portfolio and a diversified asset base that can better deliver the metals and minerals needed for the energy transition as well as wider economic development for decades to come. We believe that this combination is a perfect fit rooted in shared values -- with an unwavering commitment to deliver long-term value for our shareholders, employees and the communities in which we operate.

This merger creates a leading portfolio of copper assets. The combined business will be a top 5 copper producer with the incredible endowments offering significant scope to grow responsibly in a value-focused and disciplined manner.

We see that as a clear advantage while the broader industry faces challenges from increasing capital intensity and declining grades. Benefits from this transaction are differentiated and as we will unpack in the presentation, amounts to significant value creation with catalysts in the near, medium and long term. As Duncan mentioned, both of our companies have been undergoing significant portfolio transformations and are now well placed to further maximize value through this combination. The timing also allows us to take a definitive step forward in creating what will be one of the world's largest copper mining complexes with Collahuasi and Quebrada BlancaI'm delighted with the work our teams have undertaken to deliver what we believe is a great transaction for both sets of shareholders and wider stakeholders. This creates one of the world's leading copper-exposed mining companies with its headquarters here in Canada, drawing on a wealth of technical and management expertise from this country's strong mining and industrial background.

So now turning to the mechanics of the transaction. This is a merger of equals that will be implemented via a plan of arrangement. Anglo American will issue 1.3301 new shares to Teck Resources shareholders in exchange for each outstanding Class A and B share. Anglo American shareholders will receive a special dividend of $4.5 billion or $4.19 per ordinary share ahead of closing, creating an efficient opening balance sheet and allowing more balanced participation for both Anglo American and Teck Resources shareholders in future value delivery. An exchangeable share structure will be implemented for the benefit of Teck's Canadian shareholders.

Following the dividend, Anglo American and Teck Resources shareholders will have approximately 62.4% and 37.6% ownership, respectively, in the combined entity. From a governance and leadership standpoint, Anglo Teck will be a U.K. corporation with equal Board representation from Teck Resources and Anglo American, including Canadian and South African representation. The combination of our 2 companies' long histories and deep bench of technical skills, combined with very similar purposes and missions, gives us confidence that we will have the right team to drive these assets forward. As this is a true merger of equals, representation on the Board will be split evenly.

Vancouver, Canada will be the global headquarters for the business, with corporate offices to support the group in London and Johannesburg. Anglo Teck will thereby contribute to and draw on 3 key centers of mining finance and technical expertise to support its growth and investment ambitions. Country offices, for example, in Brazil, Chile and Peru will be retained to ensure appropriate direct support for operations and stakeholder engagement in each country.

In terms of process from here to closing, we are working to get shareholder approvals later this year. The Teck Resources vote requires 2/3 approval by both A and B shareholders. Assuming shareholder approval, the plan of arrangement will also require customary court approval in Canada. The issuance of new Anglo American shares will also be subject to the approval of more than 50% of Anglo American shareholders. The shareholder approval is expected to take place in parallel with the Teck Resources shareholder approval. Importantly, we've already secured agreements covering approximately 80% of Teck Class A shares that agreed to vote in favor of the merger and against any competing acquisition proposals.

Once the approvals have been secured, the transaction will then be subject to customary closing conditions, including approval under the Investment Canada Act, competition and antitrust approvals and other applicable regulatory approvals in various jurisdictions globally. The merger is expected to close within 12 to 18 months.

And with that, back to you, Duncan.

Thank you, Jonathan. Anglo Teck will be a true global critical minerals champion. The combined portfolio offers a leading exposure to copper representing over 70% of the business, supported by strong cash generation from premium iron ore and zinc. We will discuss the quality of the copper assets and the growth potential shortly, but this transaction delivers one of the most significant copper exposures amongst the large cap metals and mining universe, positioning Anglo Teck as a global leader in copper and aligning the portfolio and investment thesis far more closely with the top U.S. and LSE copper peers rather than the diversified.

We are very confident in copper's future. Medium-term demand dynamics remain robust, driven by decarbonization, rising living standards and increasingly accelerating demand from AI data centers and power grids. On the supply side, the wider industry faces grade decline with material investment required just to maintain output. Capital intensity of growth projects has also risen quite significantly since COVID, seeing returns on capital employed staying marginal.

For new supply to meet this demand, prices will inevitably need to rise. We are well positioned for the next phase of growth as compared with peers as we have growth options with very low capital intensity. Our combined skill set and large resource base will allow us to monetize the long-term copper opportunity with a greater degree of flexibility.

As you can see on this slide, Anglo Teck would rank fifth in terms of all copper producers worldwide with a path to improve this position through our growth options. However, amongst the primary copper-exposed companies worldwide, we will rank second in terms of true attributable production. This increased scale will also result in Anglo Teck being the largest primary copper producing company on the London Stock Exchange by a long way, while also allowing for global capital to access our unique scale and sector leadership through our other listings in Johannesburg, Toronto and New York.

Together, we bring 6 world-class copper assets into one portfolio. These are high-quality mines in established jurisdictions with large resources and long mine life and optionality for growth that highlight their significant value. While much of the industry invests heavily into offsetting declining grades, we are differentiated through requiring limited near-term capital investment, and this positions us well to generate strong free cash flow. There is near-term growth from the current portfolio as well. We expect that there will be around 10% copper production growth coming through by 2027, driven by the ongoing ramp-up at Quebrada Blanca, a return to higher grade production at Collahuasi and an increase in production coming from Los Bronces as we move back into the softer and higher grade ores there.

I would like to take this opportunity to emphasize our confidence in the long-term value and world-class nature of Quebrada Blanca and that there is a path to resolve these short-term issues. Our portfolio of high-quality assets has a competitive cost profile with a combined second quartile cost position. Our assets include world-class, long-life assets in the bottom half of the cost curve, anchored by ownership in Antamina, Collahuasi, Quellaveco and Quebrada Blanca. Adding on to that, our joint mine plan with Codelco is expected to drive further adjacency potential from as San Andina, which will continue to move us down the cost curve. And as Jonathan will outline shortly, we will also have optionality to move down the cost curve with the Collahuasi and Quebrada Blanca.

Our copper portfolio is complemented by great assets in premium iron ore and zinc through important commodities with attractive fundamentals. Premium iron ore shares a key attribute with copper. They are both critical means by which the mining industry can support decarbonization and economic development. The zinc business provides another essential product for the global steel industry extending the longevity and resilience of infrastructure. In premium iron ore, our strong market position should deliver enhanced structural profitability in the short -- in to the medium term as steelmaking margins normalized and are still making inputs shift towards more demand for higher grade and premium inputs.

The Serpentina resource at Minas-Rio provides a scalable and high-quality opportunity to grow in what we believe is a very attractive premium iron ore niche. And the premium profile will be augmented by the under construction high -- ultra-high density media separation, or UHDMS project at Kumba.

Finally, these entities are generating meaningful cash flow, something we believe will become a further point of differentiation in the coming years, especially as surpluses have the potential to impact iron ores more meaningfully.

Turning to zinc. The Red Dog mine in Alaska is one of the world's largest zinc lines. Operating in a world-class mining district, Red Dog has the potential to extend its mine life well beyond current operations and continuous track record of strong cash flow generation. Zinc is set to benefit from rising global infrastructure spend in a market with limited new supply, and this fits well into the group's enhanced marketing capabilities.

Finally, there are no changes to Anglo American's announced portfolio simplification plans, which based on current expected time lines and subject to market conditions, should be complete by the time the plan of arrangement has been executed.

And now I'll hand back to Jonathan.

Thanks, Duncan. It's undeniable that integrating the neighboring Quebrada Blanca and Collahuasi assets could unlock substantial incremental value by sharing our resources and infrastructure and create potentially the largest copper complex in the world. These are the most compelling industrial synergies in the industry right now. Consistent with the action plan that we communicated to the market, we are currently working through the short-term issues at QB to unlock its full value. That work does not hinder us from driving significant longer-term value from this world-class asset. The combined complex will comprise of 2 extraordinary ore bodies, Collahuasi and QB. Part of the strong industrial logic comes from scaling mining of higher grade ores from Collahuasi. Processing Collahuasi all through 1 line of the QB plant would enable incremental annual output of approximately 175,000 tonnes of copper on a 100% basis from 2030 to 2040. And we expect the benefits to continue for many years thereafter.

There is also further upside if more tons are mined from Collahuasi during the life of mine. This option carries much lower capital intensity of only around $11,000 per tonne and lower execution risk than building additional plant capacity at either Collahuasi or QB. In addition, we could see meaningful cost savings from sharing other assets and infrastructure, including optimizing haulage, port utilization and support services. based primarily on the production uplift though, and before factoring in these other optimization initiatives, we expect that coordinated operations could deliver an average annual EBITDA uplift of $1.4 billion.

Beyond the operational benefits, integrating these 2 assets enhances our ability to plan and develop within the region. It strengthens our long-term mine planning improves environmental management and support better coordinated community engagement. We believe that the economic and industrial rationale for this combination is compelling, and we will continue to work collaboratively with the other owners of both assets to deliver the substantial value opportunity. A compelling aspect of this merger is the value that will be generated from a broader, more diverse project pipeline.

In pursuing these value opportunities, we will remain highly disciplined with our capital allocation. The greater flexibility offered by the combination will allow us to take a portfolio-wide view, allocating capital into the highest risk-adjusted returns. By prioritizing development where we see the greatest value creation potential we can maximize returns from the project pipeline. As we look forward, whether it's near-term production opportunities, brownfield expansion, adjacencies with neighboring assets or longer-term growth assets, we're focused on disciplined investment. We will also leverage our shared infrastructure, proven project development capabilities and joint technical expertise to reduce capital intensity across the portfolio.

That means a focus on lower upfront costs all without compromising safety or sustainability. We will continue to build on both companies' long-standing success in and commitment to global mineral exploration and discovery. Ultimately, this merger strengthens our ability to make smarter, more strategic decisions within a bigger opportunity set to grow margins and deliver value.

By integrating our organizations and leveraging our combined scale, we can realize meaningful value from procurement synergies by securing better terms, standardizing sourcing and cutting input costs across our operations. We can streamline overheads by reducing duplication across corporate functions, consolidating systems and aligning leadership structures to improve efficiency and decision making.

We also see clear opportunities in marketing and trading, a broader portfolio and stronger brand presence will improve positioning in key markets, enhance customer engagement and offerings and support more strategic sales and offtake agreements. When you put these 3 categories of opportunity together, the result is annual pretax recurring savings of $800 million. Strong cultural affinity and values alignment underpin our confidence in realizing these synergies with approximately 80% implementation expected by the end of the second year following completion. We should also be clear that a lot of work has been done between the 2 teams in order to define this path. These savings are not simply lose targets. They are identified, measurable, actionable and will be built into our integration plans. They will strengthen our cost base, improve our margins and support disciplined growth.

We're confident that this combination will deliver real and substantial value to our shareholders, and we will execute with focus and accountability. Underpinned by the high-quality asset base across the portfolios, the merger will enhance the financial and operational resilience of both organizations. The combined portfolio and balance sheets will benefit from a diversified cash flow base and increased financial flexibility, allowing for sustained investment through commodity cycles, funding high-returning projects and maintaining capital discipline.

The combined entity's balance sheet will start from a strong position, and we expect the underlying portfolio to generate stable and attractive cash flow even before factoring in any impact from stronger copper fundamentals. We expect the transaction to support an investment-grade credit rating, benefiting from focused scale, attractive diversification, significant synergies and capital discipline. Operationally, the integration of our teams and assets creates a more robust platform while also diversifying our production base. This positions us to navigate volatility with confidence, invest strategically and deliver sustainable value over the long term.

Finally, while the exact details of the shareholder returns policy will be developed in the period between now and closing, Anglo Teck will be committed to disciplined capital allocation that is balanced between cash returns to shareholders and investing in value-accretive growth. Both companies have a strong heritage. I'll say a few words on Canada's contribution to the merger, and Duncan will talk to the contribution from South Africa and the U.K. This merger will play an enhanced role in the Canadian mining ecosystem and will boost Canada's impact and influence on the global mining stage. We are establishing a new major global critical minerals champion and top 5 copper producer headquartered in Canada with meaningful representation in Canada at the executive and Board levels. Canada has long been the cornerstone of Teck's business with world-class assets and talented teams. It's a country with a strong mining heritage, a stable and constructive regulatory environment and a deep pool of mining expertise and talent. The creation of Anglo Teck, as a Canadian-based company will bring significant benefits with commitments to invest in new growth, innovation and the Canadian economy as well as exploring new opportunities to accelerate Canada towards realizing its natural resource advantage. We're committed to providing wide-ranging benefits to Canada, working with indigenous peoples and local communities supporting jobs and economic growth while maintaining the highest standards of safety, sustainability and transparency. And that commitment is reinforced by the clear and strong undertakings we are making today to generate net benefit for Canada. Canada is part of our identity and with our global headquarters probably based in this country, and that will continue long into the future.

I really couldn't agree more with what Jonathan has just said, Canada is one of the world's greatest mining jurisdictions with a deep history in industry -- in the industry and it makes enormous sense for Anglo Teck to have our head office here in Vancouver.

Looking at Anglo American's history, South Africa and the United Kingdom have played and will continue to play an integral role in our long story. South Africa is home to world-class assets, skilled workforce and deep mining expertise. Anglo Teck will continue to play its role in the fabric of South Africa as a strong, highly valued mining company. We will continue to play our societal role in the communities around our operations in terms of health, education and broader economic development, while also supporting the country's national priorities.

Kumba remains a major part of our global business, particularly with the significant investment that we are making in the UHDMS plant to make Kumba's products even more competitive. Our Johannesburg corporate office will continue to support Anglo Teck's global operational footprint and will also serve as the hub for growth and investment opportunities across Southern Africa. We remain fully committed to our operations, people, partnerships and communities across the country. And of course, our management team and Board will continue to include meaningful South African representation. The United Kingdom will also continue to play a key role within our corporate strategy with strong governance frameworks, access to global capital and a deep investor base that understands the mining sector, we are pleased to confirm that the combined company will maintain its U.K. incorporation and primary listing on the London Stock Exchange. Anglo Teck will also continue to progress the development of the Woodsmith project in Yorkshire with its ongoing potential to be a multigenerational asset in crop nutrients, subject to the 3 criteria around balance sheet, syndication and critical studies that we have previously outlined.

We're proud of our roots in Canada, South Africa and more recently, the U.K., and we're excited to continue building our future from these strong foundations.

Our respective companies are committed to shareholder and stakeholder value delivery through responsible mining. Both companies are building central sustainability and technical capabilities that underpin our respective track records on social and environmental stewardship, indigenous and community relations and responsible resource development. Together, Anglo Teck will continue to prioritize long-term value creation that focuses on safety and health as our first priority is inclusive and responsible and supports environmental protection. We're also focused on transparency and accountability. Together, we'll continue to invest in technologies and practices that improve our environmental footprint while maintaining the rigorous sustainability standards across our operations. This merger strengthens our ability to deliver on these priorities. We can scale best practices, share innovation and drive measurable impact across our combined portfolio. We're proud of the progress we've made individually and even more excited about what we can achieve together.

I would like to finish by saying how thrilled we are to be announcing this merger of equals that we believe unlocks and create substantial shareholder value. Together, we will become a leading critical mineral producer with a top 5 global copper portfolio, backed by premium iron ore and zinc assets and with outstanding margin-enhancing growth optionality in both the near and long term. By combining complementary portfolios and capturing real material synergies, we will deliver tangible value of $800 million per year with a road map to unlock an additional $1.4 billion of annual underlying EBITDA uplift at the QB and Collahuasi complex. And we will have the resilience and enhanced financial capacity to balance shareholder returns with valuable investment opportunities from this incredible suite of assets. This transaction strengthens our position in key markets and enhances our ability to respond to commodity cycles with greater agility and resilience. This further enhances and creates meaningful additional value for all our combined shareholders.

So thank you, and now we will be pleased to take your questions.

[Operator Instructions] And the first question will come from Matt Green with Goldman Sachs.

Jonathan, Duncan, congratulations to you both. I've got 1 question, but I guess, in 2 parts. Just on Collahuasi and QB. What is the proposed agreement with the JV partners that you need to present to unlock these synergies and sort of your discussions to date, has there been a willingness for them to proceed with this? And then just on the $1.4 billion target synergies, you suggest that, say, risk-adjusted, from from a technical, and I guess, operational perspective more so than an economic macroeconomic factors, where do you see the greatest risk to achieving this target? And are there any specific areas that you have presented I guess, particularly concern around in your estimates.

Thanks, Matt. Let me talk to the establishment of the JV So clearly, this is something that is fundamentally driven by the industrial logic of it. I think the market has been talking about this for a very long time. all of us have seen the potential that this offers for value creation. The key materiality of all of this is the combination of Collahuasi's high-grade ore body -- and then processing that through the -- what is today must be one of the state-of-the-art concentrators at QB. So with the infrastructure that's available, water, land, et cetera, this is a really, really compelling value proposition. And I think one that all the shareholders on that asset are desirous of, I mean, certainly, it has been spoken about by all of the shareholders in the last few years. So I'm sure that there's going to be a bit of work to do to agree terms and make it all happen. But just given the nature of this, I'm quite positive that we should be successful in getting that done.

And sorry, Duncan, if I could just follow up. Are you pressing for Anglo Teck operatorship of the complex? Is that what you're proposing to all the partners?

No, absolutely not. So I mean today, Collahuasi is operated as independent with an independent management team. It's very much going to be the same here. I think we will put -- we will put a structure around this where there's an independent management team, and then the shareholders will manage that through the Board of the combined entity.

The next question will come from Orest Wowkodaw with Scotiabank.

The industrial logic of the transaction makes a lot of strategic sense. But my question for you, Jonathan, is why now from a Teck perspective. I mean it's been a very tough year for Teck, obviously, if we look at your share price, it's largely driven by the challenges we've had at QB. I guess why look at a transaction today, especially not just the challenges, but the operational review that you just announced a few weeks ago. Clearly, this opportunity or at least I would think this opportunity would still be here down the road. But I'd love to hear your thoughts on the timing of this.

Orest, thank you for that question. Look, the transaction that we're announcing today is very consistent with our strategy. As you know, we've been working for many years on a path to portfolio simplification with a particular focus on copper. What this transaction offers our shareholders, of course, is a scaled and very high-quality premium copper-focused company with associated high-quality assets in premium iron ore and zinc. So the consistency with strategy is clear. We believe as well through this transaction, as Duncan has just been outlining, we can gain earlier access to QB and Collahuasi synergies than might otherwise be the case. And we do see these synergies as the most compelling industrial synergies available in the industry today.

With respect to QB, I think we spoke last week about the comprehensive operations review. And of course, the QB TMF challenges that we've been encountering. There is still work to be done there. We believe and continue to believe, and I think Duncan would say the same that the QB is very much a world-class asset. We will move through these challenges in the relatively short term. And there's no structural impediment here to value and ultimately, the creation of these synergies in the medium term.

So I think from an investor perspective, on the tech side, I mean, twofold. One, of course, is the access to this incredible and high-quality portfolio of assets that we're putting together here.

And secondly, it's access directly to both the synergies at QB and Collahuasi, but also the synergies of $800 million annually that we believe can be achieved through the combination of these 2 companies.

Okay. And just as a quick follow-up. Does your remaining buyback that you announced about $1 billion left, will that continue through the next year or so? Or is that on hold given the announcement of the transaction?

Orest, we'll place that on hold. We're very focused now, of course, on starting the new company, Anglo Teck with the very best balance sheet that we can. And therefore, we will continue, of course, with our normal distributions through our dividend, but we will suspend that buyback for the time being.

Next question will come from Alain Gabriel with Morgan Stanley.

It's again on the QB, Collahuasi tie-up. Can you talk through the path to lifting the output to $175 tons per annum, so the milestones and the permits that are needed along the journey? Or any capital investments other than the conveyor belt needed to get there? And what does it mean for your Stage 4 expansion at Collahuasi? That's my first question.

Thanks, Alain. Yes. So I guess just from top level, of course, what we'll have to do is is get together with the other shareholders. We'll have to do the detailed design of the combined operations, and then we will have to obviously come to an agreement with them. I suspect that, that could be done in relatively short order. Following that, we will have to then obviously apply for permits against the new design and then be able to start the construction.

So if you sort of roll that through, it's probably knocking on the door of the end of the decade. But actually, in terms of what happens to your question in terms of the capital really fundamentally what we probably need to do is repurpose some of the QB plant. So there's a bit of capital that goes into QB plants to accommodate the different type of ore. One construct here is you would run on stream on the high grade, the other stream on the QB. Alternatively, we would actually look at options of restarting Rosario up at Collahuasi bringing some of that all into the plant, too.

So there is plant CapEx that we've allowed for here. That's in the order of around about $700 million at about $1.2-odd billion is for the connection of the 2 mines under that construct, which will largely be in the form of conveyors. So that's it.

What does that mean for the Stage 4 expansion at Collahuasi?

Yes. So look, I mean, obviously, this is a much more higher value accretion than Stage 4. So if we're able to pull this off, you then indefinitely defer Stage 4. So that would be the outcome of this. That's very clear.

And my second question is on capital allocation. How should we think about the financial leverage versus dividends and buybacks on a go-forward basis? Do you think the combined entity would inherit Anglo American's on frameworks?

This will be a new company. So we will design the capital allocation frameworks to suit the new company. But I think they will be very consistent with the capital allocation framework that both companies have today. which is to ensure that we maintain a strong balance sheet. And then we are balancing the allocation of returns to new growth and high returning new growth. And of course, we'll have the opportunity to optimize that through a broader project portfolio. against ongoing capital returns to shareholders.

So I think we both have very strong track records of returning cash to shareholders. We will look to continue that through the new company. And of course, balance sheet strength is fundamental to what we're setting out to achieve here. This is going to be a quality company in terms of the assets. We also need this to be a quality company in terms of the balance sheet and the optionality that, that will give us.

Next question will come from Liam Fitzpatrick with Deutsche Bank.

Duncan and Jonathan, look, it's really coming down to the -- my question is on the value of the deal. I think we can all see the logic, but the surprise in the market is the lack of premium for the Teck. So -- perhaps firstly for Jonathan, if you could just comment on the QB issues and whether it's fair to infer that it's going to take quite a bit longer to get around these tailings and other issues than the current guidance that you have in the market? And then a question for Duncan is just around the level of diligence that you've done on the QB asset and the comfort that it can actually get to those designed capacity levels and even higher longer term.

Yes. Thanks, Liam. So just on the first point, we've structured this as an at-market merger of equals and you see that reflected beyond the ownership ratios into aspects, for example, the 50-50 appointment of directors to the Board from both tech and Anglo American. You see that from the sharing of management as well across the top of the company. We expect that to be the case throughout the senior management ranks -- with respect to QB, of course, we commented on that last week in terms of the action plan that we have in place there. We noted that the work we have to do on tailings will likely carry through into 2026 as we work to improve sand drainage times with will allow us to accelerate the construction of the San Dan. In the meantime, of course, we continue to build rock benches to assure that we can raise the heightened to crest, so we can continue to operate the mine and the plant.

We're very confident that we'll make our way through the challenges that we're having in the plant right now. But again, as discussed last week, it's going to take us a little bit longer than we previously identified. But it's important we take the time now to do that work really well to ensure that we preserve the value of what is a world-class asset. And of course, that enables the capturing of the synergies that Duncan has just been talking to.

So Liam, let me pick up on your question related to the diligence. Of course, you can imagine we've done extensive diligence on this particular matter. And that, of course, included a number of technical site visits. So we've had our technical experts, both tailings and process engage with the team at Quebrada Blanca. And on top of that, we've had a number of sessions with the independent professionals. -- engineers on record, et cetera, with at Quebrada Blanca. So as Jonathan sort of alluded to, and I am very confident that Quebrada Blanca is a great asset.

Now we have seen what Quebrada Blanca is going through before ourselves. We have experienced that in a similar sort of way. during the Quebec ramp-up. And I completely recognize the challenges that are being experienced here on the ground at QB. The reality is that these major operations do just sometimes take time, particularly in the early phases of setting up a tailings staff. The early years of building a tailings down are absolutely critical to the structural integrity and the safety and therefore, the longevity of that dam.

And therefore, it is important to go at the right pace and set things up the right way for the long term. Done right. then the benefits are there for decades to come. And as I say, at Quellaveco, we had a very similar problem. -- in the context of a very high department of fines to the sands fraction, which is what you use to build the tailings down wall until you get on top of that. your rate of production is limited.

Now the work that the team at QB are doing right now, the approach that they are taking to it is very similar to that, that we took to Quellaveco. So for sure, it will impact production in the first couple of years. but it's absolutely the right approach to take to deliver the very significant and inherent value of that asset.

So look, summary of all of that is I completely share Teck's excitement about the full potential of Quebrada Blanca and the opportunity that we have to take the combined Collahuasi-Quebrada Blanca assets to the next level.

Your next question next question will come from Anita Soni with CIBC World Markets.

Jonathan and Duncan, a couple of questions. So firstly, -- just a follow-up on Alain's questions a little bit on the tailings dam. Maybe talk about Duncan, Anglo's experience with an tailings dams and any of the experiences that you could bring to bear? I'm assuming that the tailings from Collahuasi will be deposited in QB. But is that not -- you're assuming that it will be fixed by the time you actually get these permits to get the transported over. Is that correct?

So look, we'll have -- the 2 operations are separated by quite some distance in elevation. So up at the Collahuasi mine, there is a plant, and there is a tailings down associated with that plant. Down at Quebrada Blanca, there is a plant and there's a tailings dam associated with that plant. So we are in the combined operations going to be running all of the plants and all of the tailings dams. So that means that the ore that is processed through the plant down at Quebrada Blanca will be the source of the material that is used to build the Quebrada Blanca tailings dam.

So it's how it works technically, and the rheology of those concentrates or tailings will determine the rate at the which goes. But we understand those very well. And by the time we get the it really does feel like the ramp-up will be done. So 2027 looks pretty solid.

Okay. Yes. I had assumed that the ore that gets processed through QB is going to be deposited in QB. So thanks for that clarification. I'm just wondering also, is there any time commitments in keeping the head office in Canada and the key management rules as they are, i.e., yourself as Deputy CEO and Duncan as CEO, are there any commitments that you've made or expect to make in order to get through this investment Canada review?

Anita, yes, there are. We, as you highlight, have committed to have the global headquarters for this company in Vancouver. We've also committed to have the majority of senior executive roles based here in Canada. And as you say, that includes the CEO, Deputy CEO and CFO, among other roles, those commitments are expected to remain in place in perpetuity.

Okay. And then -- just in terms of the index implications, have you spoken to anybody? Or do you have any expectation how the primary listing being in London will impact the S&P -- sorry, the TSX index listings. I mean I have some guidance on that from our guys internally. But I'm just wondering if you have any further color to add on that?

Look, the -- I think as we've said, the primary listing of the new company, Anglo Teck will be in London, and that's where the index inclusion will be. I mean, typically, it's unlikely to get index inclusion on other exchanges because that's usually connected to primary listing and domicile.

Okay. And then one final question, just on the the revenue EBITDA? I'm just I'm sure exactly if that includes the transport cost. When you're talking about $1.4 billion on a 100% basis, does that include transport costs or not because it's a revenue EBITDA and I'm not sure what that phrase means.

Yes. It means we're generating this from increased production rather than generating it from cost reduction, for example. So it's that 175,000 tonnes of additional production that we will get from processing the higher-grade softer Collahuasi ores that translate into those those revenue uplifts.

Yes. And I guess my question was, was that also netting off the transportation cost, though, as well.

You mean the movement of the ore from Collahuasi to Quebrada Blanca, the answer is yes.

Next question will come from Chris -- with Jefferies.

Congratulations on creating a structure where 1 plus 1 clearly equals more than 2. And I'm just wondering about different options that you might have had. And just really, first, curious as to how long you've been in discussions. And then whether you also thought about potentially selling your respective companies? I mean Duncan obviously you were in discussions with BHP last year. Jonathan, you've been in discussions with Glencore, you got a deal done on the coal side. You both have increasingly highly coveted assets trading at relatively low valuations. And again, again, this deal is better than doing nothing. But I would think if you ran an auction for the business, you could potentially get very high synergies. So wondering how that was included in the thought process around this. And again, how long have the discussions been going on? And what are the options you may consider?

Chris. Yes, look, so Fundamentally, what we do is always I speak for myself, but I'm sure this would be similar for Jonathan, too, but we always look at all of the options that we have. all of the time to ensure that we are creating the best value for our shareholders. And certainly, in terms of where we were and how we looked at at the option set presented to the company, this by far and away, was the most attractive outcome for us, and that's why we've moved down this path.

Just in the context of how long we've been doing this thing. Well, I mean, as I say, I have been a very big fan of trying to daylight value out of these adjacencies that exists, whether they are directly from the ore body or whether they are from the types of industrial synergies that we're talking about here, leverage of infrastructure, common use of plants. But generally, the idea of lowering the capital intensity of what is an extremely capital-intensive industry.

And so having done Serpentina and Minas Rio and being in a very advanced talks with Codelco -- and Los Bronces. This became a very obvious next driver for us. So I mean, it's probably fair to say that Jonathan and I have been speaking for quite some time around how we make the asset synergies work and whether that at all would be possible. Those have been sort of on and off conversations for the last year or so. But in the last few months, became increasingly clear to us that actually, there was an enormous amount of value in the combination of the 2 businesses per se in addition to the value that can be won from the asset synergies.

And so I suppose in all ones the last few months is where we've been working on putting this deal together.

Yes, that's right. And Chris, if I can just add from a tech perspective here. of course, myself and the Board, we always test any proposed transaction or proposed corporate action against the available alternatives. Of course, we start with our strategy, then we understand what options exist, consistent with that strategy to maximize value for our shareholders. And then part of that, of course, is the options we look at have to be capable of execution. As we said at the top of the call here, we think there are a range of reasons that this provides great value for both sets of shareholders, including this highly scaled and high-quality portfolio of assets that we're going to bring together and then the attractiveness we see for that in capital markets. And then both the $800 million of synergies, but also the $1.4 billion of EBITDA uplift at QB, Collahuasi, truly compelling and then to many extent, you need in terms of the value creation that we can deliver together.

And just secondly, quickly on regulatory review and approval. You said this has to get approved by China as well, right? And just wondering if there's a risk around -- back when Glencore bought Strata and MAVCOM tried to block that. And that was before copper was a critical mineral, the fact that copper has become so important to governments around the world, do you see any challenges in getting regulatory approvals to get this across the finish line.

Yes. Thanks, Chris. I mean we have to go through the normal course regulatory approval here, sort of antitrust and competition related. And to your point, yes, China will be one of those jurisdictions. It's impossible to speculate at this point in time. how that process will unfold. But ultimately, we expect to get this transaction over the line. It did start with the shareholder approval, which we'll want to get done by the end of this year. And then, of course, the big one in Canada is the Investment Canada Act and then it's the other approvals, as you've referenced across a range of jurisdictions. .

Next question will come from Dominic O'Kane with JPMorgan. .

A question for Duncan. So the completion action is contingent upon a number of things, including the Anglo American $4.5 billion special dividend. So arguably, the transaction carries some market risk, i.e., commodity price risk. Could you just maybe talk to us about whether you have additional funding arranged on the Anglo American side to help you navigate that special dividend? And is there any -- is there any link digital to that special dividend with the coal and disposal? .

Thanks, Tom. Look, we looked at this very carefully and stress tested quite materially what we expected to the markets to bring forward in the next couple of years. And as we did this, we had absolutely the opening balance sheet of the new organization in mind. And very clearly, what has changed in terms of what we were doing with the Anglo American portfolio on a stand-alone basis is the fact that this combination creates a materially new and strong balance sheet. The consequence of that is that we will be able to return to the Anglo American shareholders now, some of the proceeds from the ongoing portfolio transformation. And that is reasonably consistent with what Teck did with their shareholders when they did the EVR transaction.

In looking through all of this, we still have proceeds from the -- to come. We still have proceeds from steelmaking coal to come. And as you saw last week, we had some really, really good proceeds coming in from the Valterra AVO. So we -- in setting this all up, we're absolutely targeting a strong balance sheet with a solid investment grade rating. And on that basis, we came up with the dividend.

And particularly, there's no conditionality on the 4.5% with regards to star the proceeds from coal or to beers. They are mutually exclusive

Yes. There's no conditionality related to the sale of those assets.

Next question will come from Myles Allop with UBS.

Great. congratulations. So maybe firstly, just on that regulatory risk -- could you just confirm what discussions you've had so far with investment in Canada and how confident you are, we should be around the concessions that have been proposed being sufficient to that approval? That's the first question. .

Myles, thanks for that. We have had a number of engagements with key ministers in Canada and including the Minister responsible for the investments Canada Act to ensure that they understood what was coming. We put together what we think is a very compelling package here for Canada. Of course, the commitment to the Vancouver headquarters, the commitment to have senior executives based here in Canada is a very important component of that as is the $4.5 billion that we've outlined here to be invested over 5 years in Canada, which, of course, includes the already sanctioned Highland Valley Copper mine life extension. It includes the work we've been doing in the trail operations regarding strategic metals and a whole range of other commitments as well. We've extensively benchmarked these commitments. We understand what is required to get a transaction through Investment Canada well. We saw a sort of release from the government last night, just sort of noting the transaction and noting some of the things that will be important to them through this process. Those discussions lie ahead of us. But I think what we've outlined here are very consistent with what Canada will want to see and would expect for a transaction of this nature.

Okay. That's helpful. And then maybe just for Duncan, obviously, the processes around De Beers met coal continue. Could you give us a quick update where we are with De Beers should we be hopeful that it will be some before the end of this year or or should we wait for the results of the next update and with -- how close are we to restart?

Okay, Myles. Let me start with De Beers. So progressing with the divestment process. Obviously, I said to you at the half that we were continuing to keep the demerger options alive. That remains true, but we are now through the first round of the divestment process. And we're into second round, which includes engagement with the government of Botswana -- so that's where we are moving pretty much as we had hoped that it might be at this particular stage.

And then as far as steelmaking coal is concerned, making pretty good progress with the restart of the longwall at Mamba. A few things that we need to do with regulators. There's been a number of stages for the approval to the restart 4 of those stages, a number of subsets to those stages. We are now at Stage 3F. Stage 4A is cutting coal for production. So we've come a very long way with the regulators, with the employees, with the unions. -- to get to the point where we are now. We know absolutely for sure that there is no damage at all to the ore body. There's no damage at all to any of the equipment. And so hopefully, still targeting a little bit later this year, maybe early next year for a full restart.

Maybe just for Jonathan as well around Zaldivar. Should we assume that there's going to be no approval until this Anglo merger is complete or if the tailings issue is fixed? Could we still see Zaldivar approved during the first half of next year?

Yes. Thanks, Miles. I think you mean Zafranal, which is our project in Peru. With bringing these 2 companies together, our intent would be to relook at the entire project stack here, we will have significant portfolio optionality in that regard. And then we will identify what are the very best projects to be progressed with an eye on maximizing shareholder value and returns. So we did say last week, we would not sanction projects -- new projects until such time as the QB tailings issues. -- were resolved. But I think we have to look at that again in the context of this combined company and what will be best for the shareholders.

Next question will come from Ian Russouw with Barclays. .

Just a follow-up on the Collahuasi, QB. You mentioned that the synergies you provided in the production uplift just looks at putting Collahuasi or through one of the QB lines. What prevents you from putting Collahuasi through both of those lines? Maybe if you can speak to water availability, I guess, material movement infrastructure. Just trying to get a sense of whether you're just being conservative and there is actually more upside over the medium term.

Yes. Look, we've clearly got to get into the detailed work, and we need to be able to do that with Collahuasi. So I think you would expect us to be thoughtful as to how you do that. I mean, ultimately, we don't think this is a water constraint issue at all. It will just be the rate at which you can sync the mine at Collahuasi for the grade of ore that optimizes the output. So as I said, quite a bit of work to still do at a level of detail, but reasonably confident, very confident of what we've described as a synergy value yes.

Okay. Great. And then maybe just on the sort of Zafranal question to you, Duncan, on Woodsmith. Does that does the same hold for that sort of relook at the portfolio or the combined portfolio? And could that potentially change the time line for Woodsmith?

Yes. Look, Ian, Woodsmith is still very much part of this portfolio strategically and all the conditions that I set for Woodsmith remain the conditions here. So absolutely, got to get to a feasibility study that we're very comfortable with the returns on relative to everything else that we've got in the portfolio, we've got to get syndication done and we have to be very, very well progressed through the transitions with a strong balance sheet to move forward.

Do you think that changes the timing on that? You said, I think, not before 27?

That's right, not before '27.

That's unchanged.

That's unchanged for now.

Your next question will come from Craig Hutchison with TD Cowen.

Just in terms of the approvals, I think that you said in your opening remarks, you had over 80% of a share approval. Is that correct? And what does that work out in terms of the overall vote that you guys have sort of depending on the deal?

Yes. So Craig, the 2 classes of tech shares A and B will vote separately, with a threshold of 66 2/3. So for the A shares, of course, that irrevocable commitment with respect to 80% of that essentially takes care of the vote of the As, and then we have to have the same vote for the Bs on a 66 and 2/3 basis.

Okay. Great. And then just getting back to the QBE coast, but the synergies there I know there's 2 different tax agreements. Is there any way at this point to kind of quantify what the after-tax synergies would be, assuming the 175,000 ton production.

We'll get to that, Craig, I mean you're right in that QB has a tax stability agreement through until 2037. Those things need to be factored here into the context of the cooperation and combination of the assets. But as Duncan has pointed out, that's the work that lies ahead of us. Now we've identified what we think is a very compelling investment case here through the combination of these sites and all of the detail, whether that's related to permitting or whether that's relating to tax stability is ahead of us.

We are out of time for further questions. I would now like to hand the call back over to Mr. Duncan Wanblad and Jonathan Price for any closing remarks. Please go ahead, gentlemen.

Thank you, Chuck. This is a monumental day, and I am incredibly excited about this combination and the future of Anglo Teck, which I'm absolutely certain is going to drive outstanding value creation for the benefit of both of our shareholders here. Jonathan?

Yes. Just to echo that sentiment from Duncan, this is a unique and compelling opportunity to drive real value, and I'm excited of what we can achieve together as Anglo Teck. Thank you.

This concludes today's conference call. You may now disconnect your lines. Thank you for your participation, and have a pleasant day.

Well, good morning, everybody, for those of you who I haven't spoken to in person. Welcome, and thanks for joining us again today. So a pretty busy first half following on from a pretty busy last year, but a very exciting one nonetheless for us, and I think definitely marking the transition as we deliver this accelerated strategy for Anglo American.

On a go-forward business in both copper and iron ore, I think we continue to deliver excellent operational performance, which is building now on the groundwork that we laid over 2 years ago. This focus on operational excellence is, by and large, driving stable and cost-effective production. In a world that is just getting more and more complex with some unprecedented volatility, it is more important than ever that we remain focused on what we can control, which includes driving operational excellence to get the most out of our business.

I really am very pleased to say that completing the first and the biggest component of our portfolio simplification, which was the demerger of Valterra has been really successful, unlocking material value for all of our shareholders. It took a tremendous effort from both the Anglo and the Valterra teams, and this was a really big step forward towards the goal of becoming a focused, high-quality copper and premium iron ore producer with substantial growth options.

We're going to talk a little bit later today about the coal transaction with Peabody. But regardless of the outcome of this specific deal, the portfolio simplification is progressing well, and we continue to work incredibly hard to unlock what we believe remains substantial inherent value within this company. The new Anglo American provides an exceptionally high-quality base and sets us up to benefit from high return growth in the right commodities with our collection of Tier 1 mines, our vast resource endowments and further long-term asset optionality.

Safety is, of course, our #1 priority and the primary focus in everything that we do. So of course, it saddens me greatly to report the loss of two colleagues in two separate incidents in the first half of this year at our managed operations, one in Brazil and the other at Unki in Zimbabwe. This is a profound reminder of how deeply safety matters.

Although we still have a lot of work to do on this front, we have indeed though made some significant progress in reducing our injury frequency rates across the whole of the business. In the first half of this year, these rates were reduced by 24% from the end of last year and have actually almost halved in the last 3 years. At the same time, our high potential incidents have continued to decline, which is a result of disciplined execution, some strong risk analysis and mitigation and the commitment of our teams on the ground.

As a result of our efforts to simplify and prioritize work, our leaders are able to spend much more time now in the field, engaging directly with their teams, fostering this accountability that we were after and encouraging now a culture of proactive reporting. Our commitment to safety is unwavering. It's a journey. We still have a long way to go, but I am confident that we are making progress. And we intend to end up with an environment where it is safe to come to work and leave work every day in the same way in which you arrived.

Our operating model is the foundation of operating excellence. It is a structured approach, which underpins the development and the delivery of our plans by connecting our strategy directly with the underlying assets. This disciplined execution ensures that we deliver the right work at the right time, but more importantly, in the right way. It also allows us to better understand potential problems much sooner and lets us address these proactively in order to maintain and drive longer-term value maximization.

The operating model is underpinned by our commitment to sustainability and also extends into our capital management capabilities, and this enables us to translate our endowments into -- and our wider exploration program, of course, into value at the right time. Our operating model translates more into stability and in turn, supports safety in the operations and options to pursue incremental improvements, and this helps us to generate the higher margins that we're now seeing, and the return on capital employed as well as enabling the delivery of value-accretive growth and capital returns.

I really am delighted by the performance of both our copper and iron ore businesses during the first 6 months of this year, and our guidance is unchanged for the rest of the year. In Copper Chile, we've seen some strong performance from Los Bronces, which has come in actually ahead of our plans as we continue to open up the Donoso 2 area and put that mine back into the right shape. The strong performance at Los Bronces is increasingly setting us up well as we head into an even better version of this mine once it adopts a joint mine plan with next door Andina as part of our agreement with Codelco. We're continuing to work on getting that agreement finalized and hope to do that later on this year.

Los Bronces has performed -- Los Bronces' performance, and in fact, El Soldado's performance alongside Los Bronces has fully offset the variability in the grade and the recoveries that we saw coming out of Collahuasi, which is, I think, a remarkable achievement in and of itself, considering that both of those mines are overall lower grade, and it shows how much the team have turned both of those assets around in the last couple of years.

Lower copper production was planned at Collahuasi for 2025 as the mine transitions between phases in the main pit, which is Rosario, and this is expected to be complete by the end of 2026. The stockpiles, which we had planned to use to supplement production during this period, turned out to be quite a lot more refractory than was expected. And as a result of that, we ended up with lower recoveries. This was compounded in the first half by the variability in the metallurgy and the water constraints that the mine suffered, which affected both throughput and recoveries.

Now in terms of the water, Collahuasi has started to receive additional water. So we've just commissioned our own desalination plant. And as of the end of June, we are now using that water. And of course, that plant will ramp up during the course of this year and on into 2026. And this should help to mitigate this issue of lower grades as we go through the development work on the mine itself for the rest of this year. So therefore, we are expecting significant improvements from the second half -- in the second half from Collahuasi.

We're also now having a look at next year's plan from the independent joint venture team and are working with our partners to see how we can best optimize the ore feed and minimize the impact of these recoveries until we get that next phase into production later on in 2026. Now this may include having to accelerate the mine development to manage ourselves through this transition. But let's not forget that Collahuasi is one of the world's very best copper endowments with over 2.6 billion tonnes of reserves at almost 1% copper. It is an outstanding asset by any measure.

Now our newest mine, Quellaveco in Peru continues to perform very well. In just its third year of operation, it's still reaching above capacity throughput rates. Great cost management from the team on the ground there and strong byproduct credits helped to bring the costs in at Quellaveco at just $0.88 a pound, which shows the very high-margin nature of this particular asset. Our high throughput rates are now unfortunately putting some pressure on the recoveries from the coarse particle recovery plant, and we are continuing to work on debottlenecking and drive improved stability and recoveries there.

And then turning to our premium iron ore assets. These assets underpin a very solid business, generating strong cash flows with upside optionality as the world steel industry moves to higher quality iron ore as an input to help them manage their own emissions. Our Brazilian iron ore operation at Minas-Rio is delivering stable production, showing continuous improvement quarter-on-quarter. In South Africa, Kumba's performance benefited from improved rail availability and port performance, supporting very strong sales volumes. We also are continuing to realize the benefits of the reconfigured mine plan there with some excellent cost control by Mpumi and the team. And we still have, of course, the UHDMS margins to benefit from as that project is going into implementation.

So turning now to our portfolio simplification. Really pleased that we've delivered the biggest single element of this transformation journey with the successful demerger of Valterra on the 31st of May this year. And that was, as we remind ourselves, only just a year after having announced the accelerated strategy. We worked extremely hard to structure this demerger, including the prior distribution of part of our holding, the retention of the 19.9% stake and in parallel, an Anglo American share consolidation.

The Valterra team has also been on an extensive marketing campaign, including global shareholder engagement and the Capital Markets Day, which I believe showcased that business extremely well. All of the elements here structurally and proactively have addressed the flowback concerns and have helped, I think, to set Valterra up to succeed in the capital markets.

I am delighted that we've also been able to share directly in their success alongside our shareholders with the residual stake having benefited now from quite a material rise in PGM prices in the last couple of months, increasing by value of about $0.5 billion to around $2.6 billion as of yesterday. And as previously stated, we are looking to responsibly exit that position over time and hope that the Valterra team can continue to move from strength to strength.

The PGM's demerger was clearly a major milestone on our simplification journey, but our efforts continue unabated on the remaining processes. In Nickel, we signed a definitive agreement with MMG back in February of this year for proceeds of up to $0.5 billion, and we are now working through the final regulatory approvals. And in Steelmaking Coal, we completed the sale of Jellinbah for $1 billion at the start of the year, too.

Now as you know, at the end of March, we had this unfortunate incident underground at Moranbah. Most importantly, the mine was safely evacuated with all of our processes and procedures working exactly as they should have. The incident itself caused no damage to the mine, and there's no damage to any of the equipment in the mine either. And we are now going through a very rigorous process to work out the right approach to restarting the mine with all the appropriate regulatory approvals and safety considerations every step of the way.

Our team in Brisbane has gone about this work in an excellent manner, I believe. So we have now over 2 decades of experience in operating this mine and the team in Australia, combined with the technical capability and the experience across the group are working diligently on the restart in partnership and in collaboration with all of our stakeholders.

So as part of that process, we've set up a tripartite industry forum. So that's basically a forum that's constituted of business, government and labor stakeholders to discuss this incident and be sure that we are transparently sharing the learnings from this incident. This is a first, I believe, for the mining industry in Queensland and sets a new benchmark for both transparency and industry collaboration. We will continue to work very closely with our workforce here, with the industry safety and health representatives as well as with Resources Safety & Health Queensland under a commonly agreed set of principles to progress a staged approach to recommencing production as soon as is feasibly possible in a fully risk-assessed manner.

Now I want to be very clear that as we have worked through the different options, our primary lens, as it always is, has been safety. We got back underground in mid-April, and we developed the plans for a staged restart. We had approval to start maintenance and development activities in early June, and work is now well progressed to prepare the longwall panel for a restart. Just last week, we received the approval to move the shearer from the tailgate, which is where it was at the time of the incident, all the way back to the main gate, and that is in order for us to undertake some specific longwall maintenance activities. And in so doing, of course, we're going to get the benefit of the provision of some very useful data for validating our control systems as we move towards a safe and a structured restart of production. Now subject to the final approval from the regulators, we intend to use remote operations at the restart for a period of time just as part of this plan.

In regard to the sale process for Steelmaking Coal, Peabody was, as we know, the successful bidder and signed a definitive sales agreement at the end of a highly competitive process. While the Moranbah incident is unfortunate, and we are working constructively with Peabody, knowing what we know today in terms of the condition of that mine, the equipment as well as the progress that we are making on a daily basis with the various stakeholders, as I've described, we remain confident in our belief that the event does not constitute a material adverse change under the sales agreement. We have been constructive, flexible and open with Peabody as we work towards completion. And should Peabody ultimately decide not to complete, we remain confident of that legal position under the contract.

We ran a very competitive process last year and the strong inbound interest that we have received over the last few months, I think, is a reflection that these may very well be the last Tier 1 Steelmaking Coal assets to come to the market for the foreseeable future. And I think it also underpins the fact that the supply-demand fundamentals remain very attractive for that industry. Therefore, if we are forced to remarket the assets, we are confident in a successful sale process, but this would potentially push back completion into 2026.

Lastly, on De Beers, our commitment here to exit De Beers is unwavering, and we are progressing with both a trade sale and listing options in parallel. Primarily due to the complexity of the shareholding agreements and more importantly, the challenging diamond markets over the last couple of years, this was always expected to be the final step in the portfolio transformation journey. We continue to make good progress here on both tracks. The finalization of the sales agreement and mining licenses extension for Debswana with the government of Botswana back in February was a critical enabler to move forward with the separation process.

On the trade sale route, we are currently engaging with a credible set of interested parties in a formal process now. In parallel, we have been engaging with the government of Botswana in respect of its interest to increase its shareholding in De Beers. A trade sale absolutely remains our preferred exit route for the business, but only if we can find the right buyer on the right terms. In parallel, we are progressing preparatory activities for a capital markets process should that become the preferred route for our shareholders.

As far as diamond markets are concerned, we have started to see the early signs of stabilization, we certainly hope so anyway, over the last 6 months. I think this is notable considering the increased volatility in the sentiment from potential tariffs. We continue to monitor the situation really closely and remain focused on managing De Beers business to optimize cash -- the cash generation of that business while at the same time, preserving the value of the iconic nature of this business.

The De Beers team has a clear response plan ready to ensure that cash generation would be preserved should the market take a lot longer to recover. De Beers is such an important company to the country of Botswana and indeed, to the other countries where De Beers operates. And so throughout the process, we are, of course, engaging with all of these stakeholders with regards to pathways forward as you would expect us to do.

With some of the best diamond mine resources and best marketing capabilities in the world, De Beers, I believe, is well positioned to emerge and thrive as the market recovers. We continue to believe that there is significant upside potential in this business for the right combination of owners, and we will continue to keep the market abreast of developments as appropriate.

And with that, I'll hand over to John, who will help us make sense of some of the financials in a really noisy half, and then I'll come back and close out. Thanks, John.

Thank you, Duncan, and good morning, everyone. I'm pleased with the underlying operating and financial performance during this period. But of course, as we transition to our new end state, the financial reporting does become very complex. And so I've tried to set out on this first slide as simply as I possibly can, the basis on which our numbers are presented.

Firstly, accounting rules require us to present our businesses as either continuing or discontinued depending on where in the sales process they sit. At this period end, that means that PGMs, SMC and Nickel are discontinued while De Beers continues to be a continuing operation. I've then set out our own defined pro forma, which is our best estimate of the ultimate end state for Anglo American, including the divestment of De Beers and associated corporate cost savings.

The results are clear. Our discontinued operations have suffered losses in the period, and this reflects the South African flooding earlier in the year affecting PGMs in the 5 months before demerger and the non-operation of both Grosvenor and Moranbah in SMC. Meanwhile, our continuing operations have performed well, albeit down slightly on last year, with that shortfall being almost completely due to De Beers and the continuing weak diamond market conditions.

The combination of continuing and discontinued operations resulted in total group earnings of $0.15 per share and a dividend of $0.07 per share, in line with our 40% payout policy. This lower payout reflects the losses from those discontinued operations. Looking at our results on a pro forma basis clearly shows the higher-margin nature of our go-forward business.

Lastly, on this slide, on net debt, there's been a slight increase in the period to $10.8 billion. And with EBITDA from discontinued operations excluded from the calculation, this results in net debt-to-EBITDA of 1.8x. Of course, that ignores the expected proceeds from the sale of our remaining 19.9% stake in Valterra and sales proceeds from SMC, Nickel and ultimately De Beers. Adjusting for those, we see our net debt-to-EBITDA below 1x.

Moving on and starting with the results for the continuing operations. Production was down 9%, mainly due to De Beers managing production to match lower demand and the second plant at Los Bronces being on care and maintenance since the middle of last year. Our basket price was down 1%, largely due to lower iron ore prices. While EBITDA at $3 billion was lower than last year, largely due to De Beers, with margins similarly impacted. And that translated into a continuing earnings per share of $0.32.

Drilling into a little bit more detail now on that continuing EBITDA. You can see De Beers had a $0.5 billion negative impact compared to the first half of 2024. This reflects the prior year inclusion of a royalty sale of $0.1 billion and ongoing challenging market conditions. Our focus on reducing inventory in the period also resulted in some diamonds being sold at lower margins. But while De Beers' overall EBITDA was negative $0.2 billion in the period, our focus on working capital meant that the business was cash neutral.

The lower volumes that you can see here were mainly in copper due to the smaller Los Bronces plant being on care and maintenance, together with lower volumes at Collahuasi as the mine transitions phases and realizes lower recoveries on the ore from stockpiles.

I was delighted once again with the strong cost focus. Commercially, our supply chain teams are doing well to manage CPI, while our cost savings are coming through exactly as planned. The net $0.2 billion cost benefit shown here reflects $0.3 billion of gross cost savings, offset by $0.1 billion of higher costs, mainly at Collahuasi, as we accelerate development work to ensure we minimize this period of lower recoveries.

Staying with costs, you can see here that we remain firmly on track to deliver our committed $1.8 billion of cost savings. In February, I said we would realize an incremental $0.5 billion savings in 2025, $0.3 billion from run rate savings achieved in 2024 and $0.2 billion from new savings to be delivered as we further streamline our corporate costs. At the half year, we've realized $0.3 billion of that full year target of $0.5 billion. And with restructuring activities continuing, we are exactly where I would want us to be.

Standing back, you can see here that all of our EBITDA in the period came from copper and iron ore. Copper EBITDA represented $1.8 billion with margins at 48% as higher prices largely offset lower sales volumes. Notably, Quellaveco delivered a standout performance with unit costs at $0.88 per pound and an EBITDA margin of 68%. Iron ore EBITDA was $1.4 billion, flat on this period last year, but this holds a strong underlying performance, considering that lower prices were offset by higher sales and a strong cost performance at Minas-Rio.

And as you can see here, the cost focus that I've just talked to is evident in our unit costs with iron ore down 5% and copper just slightly higher, reflecting the reduced contribution from the lower-cost Collahuasi in the period.

The underlying effective tax rate for the continuing business for the first half was 49%, reflecting the mix of profits with a higher proportion from Peru, where effective rates inclusive of mining taxes are around 41%, while still carrying corporate costs in the U.K. and we expect the full year ETR to be between 44% and 48%. Over the longer term, we expect the ETR for the end-state simplified portfolio to be somewhere between 38% and 42% as Collahuasi gets back to normal volumes and U.K. corporate costs are reduced.

Touching briefly now on discontinued operations. Firstly, PGMs had a weak first 5 months before demerger, mainly due to the flooding in South Africa in the first quarter. The insurance costs associated with that flooding will also result in a cash cost to Anglo American in the second half of around $0.25 billion, given that it was self-insured. Secondly, SMC was loss-making in the first half, reflecting the fact that Grosvenor was not operating throughout the period and Moranbah has not operated since the incident at the end of March.

And finally, you should note the loss on the demerger of PGMs. This reflects a gain of $2.9 billion on the assets demerged, being the market value on the date of demerger, less the net asset value at that date. This gain was then offset by a recycling of historic foreign exchange losses of $4.6 billion on the translation of rand underlying assets to dollars as required by accounting standards as well as taxes and transaction costs incurred of $0.5 billion, and all of that was in line with our previous guidance.

You will also note in our balance sheet that we have a financial asset investments of $2.3 billion in respect of our residual nonstrategic 19.9% holding in Valterra, which was the value at the 30th of June. The net debt impact from discontinued operations was an increase of $0.1 billion, and I'll come on to that in a little bit more detail shortly.

Looking next at our cash generation from continuing operations, which is another area of focus of mine. We again saw an inflow from working capital of $0.4 billion. As expected, our go-forward businesses managed to maintain the good working capital position achieved at the end of 2024 with the inflow largely driven by a reduction in diamond inventories in De Beers. This reflected a combination of diligently matching production to demand and a focus on selling down all categories of diamond inventory even if some lines were at lower margins. While we continue to manage the situation closely, De Beers' diamond inventories are getting closer now to normal levels.

The working capital inflow and close management of sustaining CapEx resulted in conversion of operating profit to cash of 108%. After tax, interest and distributions to noncontrolling interest, our sustaining attributable free cash flow was $0.6 billion.

From the sustaining attributable free cash flow from continuing operations, we then funded growth CapEx of $0.3 billion, mainly comprising the debottlenecking initiatives at Collahuasi, the UHDMS project at Kumba and the Woodsmith spend to progress the critical studies. We then also paid the 2024 dividend.

Proceeds from the Jellinbah disposal were $0.9 billion, while the impact of the PGMs demerger was an increase in net debt of $0.4 billion. This reflects a neutral outcome on the demerger itself, reflecting the net impact of the debt demerged and the special dividend received. We then paid taxes and transaction costs of $0.4 billion in the first half with a further 0.1 billion still to come, all in line with the guidance that we gave earlier this year. There is then a net $0.5 billion impact from discontinued operations. This reflects the trading results and CapEx for SMC and Nickel as well as Platts up to the point of demerger, offset by the transfer of SMC and Nickel finance leases to held for sale.

So this all left net debt at $10.8 billion and net debt to EBITDA at 1.8x. And as I mentioned earlier, this is largely an arithmetic output rather than indicative of the group's position. This excludes EBITDA from exiting businesses and the proceeds for those businesses have yet to be received, including the monetization of the $2.6 billion as at today's value stake in Valterra. As those transactions conclude, I would expect to see leverage come down below 1x.

Just touching briefly now on CapEx. We took decisive action last year to reduce the CapEx, and you're seeing that come through here in these numbers. CapEx at $1.6 billion is $0.5 billion lower than this time last year. We've been rigorous in our capital allocation and prioritization of spend without, of course, compromising on safety or the underlying asset integrity. And with the exit of De Beers expected in due course, we would see that come down lower on a pro forma basis to around $1.4 billion for the simplified portfolio. And looking ahead, we expect sustaining CapEx at around $2 billion per annum with lifex and growth options on top of that subject to meeting our hurdles, of course.

Finally, it's worth briefly looking at the pro forma results for the go-forward group without De Beers and including the full benefits of our cost savings. As you can see, it continues to show strong margins, cash conversion and return on capital employed, demonstrating the positive outcomes from our transformation strategy.

So rounding out then on the key points. Our go-forward businesses are performing well, delivering strong EBITDA margins. Our focus on cost is unrelenting, and we're perfectly on track to deliver our committed $1.8 billion of cost savings. We continue, of course, to focus on cash generation. Our attention to detail on working capital and CapEx has ensured another period of very strong cash conversion. Our net debt will benefit significantly from transaction proceeds and the sell-down of our remaining 19.9% stake in Valterra, after which our leverage will be below 1x. We continue to be excited by the financial outcomes from our simplified portfolio, higher margins, higher cash conversion and higher return on capital employed.

Thank you, and I'll now hand back to Duncan.

Thanks, John. So there are a number of elements here which make our simplified portfolio stand out from the rest. The first of which, of course, is our commodity mix, which is now entirely future enabling products. We are fortunate in that we have some of the best copper assets in the world, which are set to represent more than 60% of EBITDA by 2027, all of which have significant expansion potential. Our iron ore business supplies premium iron ore to the steelmaking industry, and that positions us well as that sector decarbonizes and as new steelmaking centers emerge.

The newly positioned Anglo American, as John has just pointed out, will be higher margin and more cash generative. We are continuing to prioritize value accretion over volume growth as at the end of the day, it is the value that you are creating from a unit of capital that should be the measure, not just simply the tonnes of production. And I think that the Los Bronces-Andina joint mine plan that we announced in February of this year is a great example of that. By working to solve for value and to generate meaningful synergies, we have created an outcome that is designed to provide substantial benefits for all of our investors.

Our strong market base of assets, which is -- which are all competitively positioned on the cost curve and in many cases, set to improve their relative positioning over the next few years will be key to generating higher free cash flow. This should support consistent capital returns for our shareholders over time.

Now you've seen this chart on the left before, and we continue to believe that it's a really important one and the underlying story in it is important. It helps us to understand why despite an optically high copper price, industry returns remain modest. The cost and the capital of building new projects has grown faster than prices. This lack of a price response is very unlikely to continue in the coming years, considering the challenges that the industry is facing just to keep up with the expected medium-term demand trends. This will also, we think, shine a brighter light on those few companies that have long-life, high-quality expandable assets with lower capital, lower risk growth options, which will be able to then generate higher returns.

And it is not just the longer-term growth that will drive improving conditions for Anglo American. As Collahuasi recovers from its current low-grade phase later this year and at Los Bronces, as it improves on its own before we even do the tie-in with Andina, industry consultants WoodMac expect that by 2030, we will have seen the biggest improvement in the cost curve positioning of the business as compared to our main peers.

Our high-quality endowments also underpin our growth optionality. As this chart shows, we remain well placed to deliver copper production in excess of 1 million tonnes per annum.

Now all of these projects in this slide are advancing in both the studies and the permitting processes. Rest assured that we remain very focused on optimizing for value rather than simply production growth at any cost, as I said. The Los Bronces plant decision, the prioritization of Los Bronces and Andina joint venture, amongst others, are examples of that, and we'll keep chasing down those adjacencies.

Quellaveco's pathway in the short run will be through a throughput of 140,000 tonnes per day, all the way up to 150,000 tonnes per day, and we have now got the permits for that. Sakatti in Finland has also seen an optimization that -- and at the lower end of prices, we'll see copper equivalent production of around 60,000 to 80,000 tonnes per annum. We continue to evolve and progress our studies on all of these projects. And this, alongside our substantial copper endowments and any further adjacency optionality, I think, reinforce a real pathway to 1 million tonnes and beyond.

Turning to our premium iron ore business. Now while we understand that there is a real focus on -- in the market on copper these days, iron ore, specifically the premium quality iron ore segment is one that we fully expect to generate substantial returns for shareholders. The material produced at Minas-Rio and Kumba is high grade and high quality and compares favorably to our peers. Not only that, but the quality of our products is also improving over time. At Kumba, the UHDMS project will triple the proportion of premium quality production volume at Sishen from 18% all the way up to 55% and serves as a valuable addition to the mix of products already produced by Kumba.

At Minas-Rio, the Serpentina resource provides us with the option to potentially double our production there, and that would be production of high-quality DR-grade iron ore. While there may be some temporary short-term pressure on pricing as new sources of iron ore supply come into the market, when considering the declining grade in the Pilbara, coupled with China's commitment to decarbonization, we continue to have conviction in the short -- in the long-term fundamentals of iron ore. The optionality in our iron ore portfolio only enhances our ability to drive value from it.

At Woodsmith, we are continuing to progress the three conditions that we need to be met before we would proceed to FID for this project. We have had some great learnings to date from the SBR moving into the Sherwood Sandstone and the team have embedded these learnings and are setting us up very well, I think, to continue to sink 1 of the 2 main shafts. We are also making good progress with the syndication with discussions going well with a number of strategic partners. And lastly, our balance sheet must be appropriately deleveraged at the time that we would be prepared to take this to the Board for an FID approval.

And on the market development front, we are continuing to see very positive market sentiment and strong inbound interest from the agricultural industry. Now while Woodsmith remains a compelling opportunity and has the potential to be a flagship asset in this portfolio, we only see these three conditions being fulfilled by 2027 at the earliest.

In conclusion, our focus on operational excellence is delivering stable performance in our simplified portfolio with both our copper and our iron ore businesses tracking to full year guidance. Our cost savings targets remain on track, and we continue to drive efficiency through CapEx and working capital. We remain committed to our portfolio simplification and reached another milestone with the successful demerger of Valterra earlier this year. We are continuing to progress our respective exits from the remaining businesses as expediently as we can, and we'll continue to focus on optimizing value.

Looking forward, we remain on a clear pathway to transform this company and are set to emerge as a highly differentiated business that is well positioned to deliver consistently through the cycle with significant growth optionality.

And with that, I think John and I are very happy to take your questions. And Tyler is going to moderate just so that I don't call you by the wrong name. But Myles, I saw your hand.

And I think as well, I'm going to take the easy way out here and not pick a favorite and just go with the geographic question snake, I guess, is what it will be called so. Ian, if you'd like to ask a question. We do have some questions on the line as well, which I'll come back to when the mic gets back.

Ian Rossouw from Barclays. Just a question on De Beers around the $2 billion of inventory, John, you've mentioned previously. It looks like that you were saying the inventory release of $0.6 billion, a lot of that was from De Beers. Could you maybe give a bit of details where we stand now? And what is normalized levels per your comments?

Do you want to do that, John?

Yes, sure. No problem. Thanks, Ian. So when we look at the total inventory in De Beers then at the end of 2024, then that was about $2.3 billion, something like that. And as you see, the majority of that working capital inflow for the group was in respect of De Beers inventory. So when you roll that through, then the sort of inventory that remains in De Beers is probably about $1.8 billion, something like that. Not all of that, of course, is rough diamonds. There's various other things in there across the industrial businesses and retail stock and so on and so forth. But when we look at the rough diamond inventory, then that's pretty much getting down to about the levels that we would consider normal for De Beers.

And is that all carried on the balance sheet or is some of it off balance sheet?

All on balance sheet.

Okay. And how does that impact the book value of the business?

Well, it's within the carrying value of the business. So relative to the $4 billion that we had before, then there will be a movement in that to reflect the reduction in the inventory in terms of what sits on the balance sheet, not necessarily a material difference in the overall valuation of the business and a willing buyer, willing seller scenario. But yes, the -- what's on the balance sheet would be lower by the reduction in inventory.

It's Liam Fitzpatrick from Deutsche Bank. First question, just on met coal and the sale process there. Just trying to gauge your level of confidence on completing with Peabody. And I think their position has been that they need to see sustainable -- a return to sustainable longwall mining to complete. Is that a shared position? Do we need to see some sort of restart before completion can happen?

Yes, Liam. So look, fundamentally, under the contract, there's no real damage at all to the ore body at all. Obviously, the cash flows are delayed in terms of the restart. And what I am very confident on is the process that we followed to get it to restart and the progress that we're making within that process. So on that basis, we believe that the contract should complete under the normal conditions, and we've been working quite hard with Peabody to make that a reality.

And then just a quick follow-up on the costs. The $500 million remaining, how much of that will flow through into the unit cost that we eventually see for 2026 versus kind of general overhead?

In terms of the $0.5 billion, the majority of that, that's still to come through sits in corporate costs. So I would say that less of that will be coming through in unit cost, more sits corporately. Just by nature of where we're at in the restructuring that, of course, we've divested these businesses. We still have a corporate center that has to service all of that, do all the accounting, the legal, the treasury while working through that process. And then once those businesses are divested, the corporate costs come down commensurately.

It's Matt Greene from Goldman Sachs. Duncan, I have a question on Collahuasi, if I may. You touched briefly on the challenges around refractory material and the variability of the ore feed. I appreciate you've guided this year as a trough production year, but this is a world-class Tier 1 asset. So I'm quite surprised to see it end up in this position with such little operating flexibility. So if we could take a step back, what have been the contributing factors that have led to this? And are you comfortable that the JV can deliver operational excellence over the medium term and I guess, to go ahead with the fourth line expansion?

Yes. Sure, Matt. And it's a great question, of course. But -- and the short answer to that is, yes, I am confident that the JV management can deliver sustainable and good outcomes. But if we step back to specifically answer your question, Collahuasi fell behind in its stripping. I mean we knew that from a while ago. So it wasn't immune from any of the issues that we were dealing with in Anglo generally at the time. So it was hard yards to push to catch up. And generally, they've been making good progress on doing so.

However, this year, they had planned to utilize that low-grade stockpile. Now for many of us, of course, we say low-grade stockpile, and we think it's really low grade that at Collahuasi, the stockpile there is running grades higher than some of the biggest copper mines that are sitting in the industry today. Unfortunately, when they got into that, stockpiles are notorious in terms of the homogenization and your ability to effectively assay them and so on and so on. The grade is clearly there, but the recoveries are not. So it's more oxidized than they expected it to be.

And then they did have that double whammy effect of the fact that they ran out of water. So very cash-strapped part of Chile. The solution there was to build our own desalination plant. For years, we've been struggling with water abstraction there. So the desalination plant was very well progressed, but wasn't in time to cover off the deficit of water in the first half. So as I say, a bit of a double whammy effect. That shouldn't exist in the second half of the year. What will continue to exist in some way, shape or form is the fact that our reliance in this bridge period on the stockpile means that we're likely to get lower recoveries from it going forward.

So what do we do now? We work really hard with the management and try and help them to find ways to accelerate that stripping so that we can just open up the back end of the mine again. To that extent, both Glencore and Anglo have found equipment that we've got at our existing operations that we're not utilizing that we're happy to send up to Collahuasi to help them get going with that. But that's the fundamental background to it.

Duncan, Jason Fairclough, Bank of America. Two quick ones. First, in terms of the costs associated with the coal mine not being running, can you frame that for us? I mean you mentioned earlier $250 million costs associated with the Valterra problems. I mean, is this hundreds of millions of dollars that it's costing you to not have this run?

Yes. Jason, so I think roughly the dimensions here are it's about $45 million a month to keep Moranbah on hold, and it's about $10 million a month to keep Grosvenor on hold. So that is the shape of it. Still looking to hopefully get a restart later this year, early next year on Moranbah and of course, making some quite good progress at Grosvenor, too. So in the next couple of weeks, hopefully, we'll get the permission to go back underground and so on, but that's sort of the dimension of it.

Okay. Just a small other one. Did you guys used to have a manganese business?

We still have a manganese business. Doing really well. So the recovery of the Groote Eylandt resource and the port infrastructure and so on doing good. So hopefully, looking forward to some really positive cash flows from that.

Where does this all -- where does it fit into this? Because I don't really see it being mentioned on any slides today.

Yes. No, it's because it's not a fundamentally main part of the business going forward. So we hold a minority stake in that in Samancor, as you know. At the right time, we'll decide what we need to do with it, but we've got a lot on our plate right now. And so we're pretty much focused on dealing with the major elements of the portfolio change.

Ben Davis, RBC. Quick question on Valterra. Obviously, it's quite a sizable stake for the 19.9%. Can you give any sort of preference, envisage how you're going to dispose of that? Is it going to be a series of consecutive blocks, a strategic sale, Valterra buying back stock? Any ideas just would be interesting.

John, do you want to take that?

Yes. I mean, listen, as we said, the whole reason for holding the 19.9% was to manage the flowback. That's worked pretty well with a 90-day lockup period, which obviously comes to an end around about the beginning of September. We're open-minded on various options, but our primary objective and priority on this has always been to ensure the successful trading of Valterra. So we'll look at our options. Clearly, we sold down previously through some accelerated book builds that's probably an option that would be the simplest going forward, but that's not to exclude any other options. And then we'll consider the conditions as we move through later this year and into next year for when exactly the right time to do that is.

Alex Pearce at BMO. Duncan, could you provide us an update on the situation with Transnet and Kumba at the minute? Next year is a lower production year for the asset. And I see in the results, you got some penalties from a take-or-pay situation from Transnet, I believe, this half. Are you able to comment on the kind of levels at which that could be triggered going forward?

You mean the penalties to us or the penalties to Transnet?

Yes, yes, to -- Transnet paid you.

Yes, Transnet paid us. So no, Alex, I think really positive progress being made within Transnet on the restoration of those assets. Still slow, if I'm perfectly honest with you, but certainly much better availabilities this year than we've seen in previous years. So they went through a very big maintenance program at the end of last year, which was by and large, successfully completed, and we're now seeing some of the benefits of that.

Of course, the next major step for this particular corridor is very likely going to be some form of concessioning. The government is in a process right now of running an RFI process, request for information process. So they're gathering a lot of inputs from various infrastructure players, industry players, et cetera, et cetera, as to what a concession line would look like. And then depending on how that all rolls out in their analysis, either later this year or early next year, they'll issue a request for quotation, an RFQ for people to bid on a concession.

So I think that, that's sort of the pathway of travel. In the meantime, the mine in amongst the other user group, so four or five main users on that line, working really, really closely with Transnet to manage all the reliability and the safety issues on that line and so far, so good. We'll have to see what happens when the RFQ comes out and what the interest is. But hopefully, we get a very solid operator who knows what they're doing in terms of running infrastructure projects to take that over and run it.

As far as the penalties are concerned, I mean, it was a technical issue. So we will get the money back, if you like, in terms of the tariffs on the way forward. So...

Alan Spence from BNP. It's an election year in Chile and some candidates seem to have some very different views of what Codelco should look like. Any early thoughts on maybe some new options for you in the country?

No. Look, I mean, election is every 4 years in Chile and government does change every 4 years in Chile. I think the most important thing for us to do is just being a good company within Chile. And generally, that's been the secret of success. We haven't heard anything specifically that would materially impact what we're doing there or what Codelco is doing, particularly on the Andina-Los Bronces asset. So hopefully, still, as I say, looking forward to getting that deal fully inked before the end of this year.

And Sakatti, what drove the downside and the kind of scale of the opportunity you see there? And does that do anything to the time line?

Yes, it was -- no, I think time line is good. So real material progress with Finland and the derogation for the permits there. Particularly having had the project declared by Europe as a strategic project for Europe, I think that, that was a really material milestone forward. So probably a little bit more optimistic now on time line than we were at the last time we spoke. The delta in the number is predominantly driven actually by the nickel price because that's a copper equivalent number.

Richard Hatch from Berenberg. Just a question on Collahuasi. You talked about accelerating the mine development. I just note in the costs, you mentioned this in your commentary that the costs have stepped up there, about $480 million a half now from $420 million in H2. So how long should we think about this kind of period of increased costs at Collahuasi? And then second one is just can you just remind us on the capital intensity of the fourth line? My mind isn't good enough anymore.

John, can you do the capital intensity one? My mind is not good enough for that -- just as far as the Collahuasi costs are concerned, as I said, we're going to be working pretty much through to the end of next year. And if we're going to accelerate stripping, that's going to be more trucks. So I think probably through to the end of next year is what you should be figuring on there.

Does it step up from this level? Or does it stay at this level?

No, we're going to work really hard not to let it step up from this level.

And capital intensity, I mean, obviously, we're not at sort of final decisions or anything on fourth line, but we know it's -- as a sort of very straightforward brownfield expansion, then it's going to be at the lower end of a typical range. So I'm not put a number out there right now, but I think the returns on that project will certainly be attractive from what we can see today.

Grant Sporre from Bloomberg Intelligence. It's actually just a follow-up on Alex's question. The way you answered it on Transnet and the operator, it sounds like Anglo American wouldn't be interested in -- or Kumba wouldn't really be interested in becoming an operator of that line.

Grant, I think our very, very strong preference is that an infrastructure operator gets that concession and runs it. Obviously, we don't want to be too far away from whatever is happening there because it is important. It's one of the most important lines in South Africa. But absolutely, our preference is that an infrastructure operator who knows about running train sets and ports, et cetera, et cetera, is the successful bidder there.

Grant, can you pass the mic to Myles. Myles, Chris, I'll let you guys get first dibs...

Yes. Myles Allsop, UBS. A couple of questions. Maybe firstly, on the joint ventures. Could you give us a sense as to with Serpentina, when will we see the benefit coming through? What the kind of impact on unit costs and realized pricing in theory could be just to help us model it out as we look out over the next kind of 5 years or so. Also, I mean, with Andina and Los Bronces, how should we model out? Should we just assume that volumes go up and unit costs go down? That was the first question around joint ventures.

Okay. On Serpentina, the critical path here is running through getting the permits, Myles, for opening up that ore body. And as you know, the first step there is just to displace the ore from the existing Minas-Rio mine with this. Why? Because this ore is definitely not as hard as the material that we're going to be moving into by the mid-'30s and certainly is of equivalent or potentially slightly higher grade than what we've got.

So that's a full-on permitting process. And in Brazil, that takes 4, 5 years to kind of get that done, but the team is on with it. But I just think that the -- what we are offsetting by that is potentially a couple of billion dollars of CapEx which would be needed to adjust the front end of our current operations with additional crushing, additional milling, et cetera, et cetera, because we can just put this material, which is much more equivalent to what we're operating now through the plant. Again, really important date there is kind of middle of the next decade. So that's what you should be thinking of. And then that should enable us to kind of keep the cost pari-passu in terms of where they are today in real terms.

And with Los Bronces?

Yes. And at Los Bronces, so how to think about this. So steps going forward, we hopefully finalize the agreements with Codelco later on this year. We then go immediately into a set of processes around standard regulatory approvals and so on, following which we have to start permitting the combined mine.

In Chile, the conventional wisdom is that permitting of mines of this nature, just given the work that you need to do on them is 3 years plus or minus for the EIA, 1 year for the sectoral permit that happen after that. But of course, the fundamental logic of this is not only just the value associated with the deferral of significant components of CapEx on both sides and access to ultimately that big blocked up wedge of copper that sits between the two mines. But also environmentally, it's a much friendlier solution, too, because you're not -- you're sharing a lot of infrastructure, you're managing more effectively the inputs such as water and so on and so on.

So hopefully, we can do a bit better than that 4 years that I've just described. And Chile is one of the countries that is putting an enormous amount of effort into the acceleration of the administrative processes of permitting. So that's the big benefit there.

So massive deferrals of capital. So Los Bronces underground now then whilst it's still a fantastic asset, don't forget that, that resource still is 1.3% copper. There are not many ore bodies out there that are still that level of copper. It would go to a bit further back in the queue in terms of its development, of course, unless copper prices went through the roof and we could substantiate its own plant, et cetera, et cetera. And then just -- you can just imagine the efficiencies that we brought about what is effectively running one pit rather than two pits. So I'm expecting a material cost benefit at a unit cost basis as a result of doing that. And we try and bring that on as quickly as possible, the rate-limiting step will be the permit.

And will the old concentrator be restarted broadly at the same time as [indiscernible] joint venture.

We continue to run options on when and how to restart that concentrator. As I said, it was predicated on a number of things. The first thing is the right grade of ore going into it. The second thing is water. We are now using some of that water that we've got there to remove Perez Caldera which is a tailings dam that we want to relocate. And so the combination of those two things and copper price ultimately determine when it's going to start.

All things being equal, in terms of where we are today, we were planning to start it closer to the back end of this decade, unless, as I said, copper prices went through the roof. And, and this is an and, we'd removed enough of Perez Caldera to satisfy ourselves that it was going to be compliant without any further hassle as far as GISTM considerations and so on are concerned.

And just maybe one quick one for John on the balance sheet. So 1x is kind of broadly where you look to be, so $6 billion of net debt. Is that kind of the top end of the range? Or how should we think about where you want New Anglo leverage to sit? And when can we expect kind of cash returns to step up even more aggressively?

Yes. Thanks, Myles. I mean the reference to 1x was really the arithmetic of saying we're at 1.8x today, you take the proceeds across assumption on Steelmaking Coal, on Nickel, on Valterra and De Beers, then very clearly, you can see a strong pathway towards sort of, as you say, net debt of sort of $6 billion and therefore, 1x.

Where would I want to run the balance sheet? Clearly, our policy at the moment talks about sort of not beyond 1.5x at bottom of cycle. Clearly, we've said as you go through that temporarily, that's fine, we'll take action to bring back. That's clearly where we are just now. As we think about New Anglo, somewhere between 0.5x and 1x, I think, is a good place for the company to be running. Of course, at certain points that it would be right to be a little bit lower or right to be a little bit higher, but I think that's the right place.

Why is that? That's commensurate with a good investment-grade credit rating, which I think is the right thing for a company such as ourselves to have and just ensures that you've got access to liquidity at all points in the cycle and allows you to be strategically consistent at top of cycle and bottom of cycle, which, again, for a mining company in the markets that we're in is really important.

Duncan, it's Chris LaFemina from Jefferies. I just wanted to ask some follow-ups on the coal sale. So you used the word flexible in your ongoing discussions with Peabody. And is that flexibility about timing of the transaction? Is it about structure? Is it about price? Maybe all of the three?

And maybe second to that, in the initial agreed deal, you have contingent deferred payments on Grosvenor for that mine potentially restarting. Is that the kind of structure you might consider on Moranbah North? Because it sounds like the timing of a restart on Moranbah North is far past the kind of the termination date of the transaction. So how does it work? I mean the deal has got to close in September, right? And if you're not restarting the mine early next year, it's not clear to me how this actually progresses from here.

Yes. Chris, look, as I say, I mean, I don't want to get into too many details of the commercial discussions that we're having with Peabody today. Suffice it to say that I think that it's both of our preference that this deal can complete. And so we're going to work really hard to try and make that happen. As I say, to the extent that it can't happen for whatever reasons, it won't be because we don't believe that this mine can restart and that there's real value in the mine going forward. So this will ultimately end up being a Peabody decision, not an Anglo American decision as to whether they choose to complete or not.

It may be too hypothetical to answer the question, but let's assume that it goes to arbitration. You indicated earlier that where you could -- there's interest in these assets from other potential buyers. If you were to sell to another buyer at a large discount to what you've agreed with Peabody, doesn't that strengthen their argument that it was a MAC because it's kind of evidence potentially that the value of the assets is lower due to the incident, even if it's a function of coal prices being lower, I would assume they could use it as an argument that this did indeed have a material impact on the value of the assets.

I'm sure they'll prosecute many arguments if we end up in arbitration, Chris, and I definitely don't want to try and preempt what those might be at this particular point in time.

And just one last one on this. In terms of the timing, can you just walk us -- like what happens next? What is the time line of getting this to the finish line?

Yes. So as I said, we've now got all the way to the point where the regulators are really happy with the fact that we are back underground. We're doing some meaningful maintenance. We're doing the development work in terms of the future panels of the mine and so on and so on. We have also cleared that belt, and we've done a whole lot of roof repairs with [indiscernible], et cetera, et cetera. We've addressed the cracks in the face, which happened as a result of the mine standing for a really long period of time. We've spun the shearer. We've moved it out of where it was located, so we can get access to a gearbox that we want to do some big maintenance on.

So you can see, by and large, all the steps of what it takes to operate the mine are in place and progressing. What happens next is we do a number of risk assessments with the regulators that go through the operating processes and procedures of the mine going forward. This is all manifest in a document that's called the second workings document. It is, by and large, the rules against which you run your mine by, and you do that in agreement with the authorities. So that's the process that's underway with the authorities at the moment. But as I say, physically, we're in good shape.

Duncan, Alain Gabriel at Morgan Stanley. Back to Matt's question on Collahuasi, you mentioned you're working with your JV partners on optimizing the mine plan into next year. Are you able to share with us some of the key parameters that you expect for the mine, the latest parameters in terms of grades, throughput or production? What's your latest thinking there?

Well, so look, I mean, as I say, fundamentally, no major changes at all. What we've got is this period now where the same as Los Bronces in a way, Donoso 2 had to open up so that we could get access to faces that would then provide the material into the plants. So Collahuasi has got exactly that. The only difference is Collahuasi now has really big stockpile that it can use as an offset as we go through this. This is work that they've been doing for a couple of years now. Got caught short a little bit by the fact that the stockpiles are not going to perform as they thought that they were going to perform.

But that said, the work that's actually going on with the guys on the mine and Glencore and so on now are saying, there are other places in stockpiles we might be able to go to. Could that make a difference? There are other places in the mine that we could go to. Does that make a difference? What we really don't want to do is fundamentally change the shape of that mine because that mine is set up for very, very good high performance in the long run. So very important, we don't make short-term decisions here that compromise the viability of the mine going forward. And so I think all of us very focused on doing that.

I reckon by -- through 2026 is where all this development work needs to complete. And from 2027, we would be sort of back on track exactly where we had planned to be.

Okay. And the follow-up is Collahuasi again, your neighbors there appear now more keen on moving this adjacency forward. What are the remaining stumbling blocks in your view? And how realistic is it to expect a deal announcement in 2026?

Look, I think what's really good news is that everybody realizes that there's material value locked up there, and it's definitely worth chasing down. Those discussions are ongoing, and we need to find a way to do that.

As I said to you before, when you think about this, what is the playbook, step 1 is recognize that there's value. So I think that's check, okay? Everybody now recognizes there's an enormous amount of value here. Step 2 is then there's a lot of work. You put a lot of effort into working out what this would look like, how it would look, what the value deltas would be. I mean you understand that it's big because the industrial synergies are huge, but what these value deltas will be, then how they distribute amongst the parties and so on. So I don't believe any fundamental stumbling blocks, but an enormous amount of work to happen -- to make it happen.

Maurizio Carulli from Quilter Cheviot Investment Management. We are shareholders. First of all, congratulations for the progress that you have done on the transformation of the company in the past 12 months, which has been really significant. I have two questions about De Beers. One probably for Duncan and the other one probably for John. Can you give us -- because there has been a lot of news about the bidders. It's possible to get more color on the characteristics of some of the bidders for -- current bidders for De Beers. And also separately for John, how have you valued the inventory component in De Beers, the $2 billion -- roughly $2 billion?

Okay. Thanks for those questions. Without giving anything away in the context of actually who the buyers are, as you can imagine, just as a bit of background history when we made the announcement that we were planning on divesting our stake in De Beers, we had a number of inbound interests. How do we sift through those interests is you look for people who genuinely understand the market, who are serious buyers, who absolutely have the wherewithal and the backing to be able to complete a transaction like that. That then sort of sifts down into a much smaller group of people that you would take through into a formal process. So that's where we are now with this smaller group of people that we take through into a process.

All of the players that we have in our process at this particular point in time are absolutely credible in terms of, a, their understanding of the industry; and b, their ability to be able to run and operate a business such as De Beers. So they are associated with and aligned to and have experience of industry and market in this space. And that fills me with a huge amount of joy.

So that's the type of buyer that we've got. Of course, this is a very big business, and therefore, probably will need multiple balance sheets to support the acquisition of it. And therefore, I think probably reasonable to assume that in the process, there will be consortia and consortia formations that ultimately hopefully would prevail at the end of the day. Okay.

And in terms of the inventory, then we're required to carry all of our inventories at the lower of the cost, i.e., what it cost us to get those inventories or the realizable value, how much could we sell that inventory for. So on the basis that the majority of our diamonds are mined by ourselves, then the cost is clearly relatively low compared to what we could sell those diamonds for. Of course, we buy some diamonds as well, and we buy diamonds from Debswana, our joint venture with a margin on them. But at every period end, we look and see for those diamonds as with any inventory, is the cost that we have those on our balance sheet at more or less than what we could sell them for. And as long as it is less than what we can sell them for, then that's the carrying value. So we're very comfortable with what the carrying value is.

If I could get the mic back. I need the mic to be able to ask the operator if we could go to the phone lines if there's any questions on the phone.

[Operator Instructions] Our first question comes from the line of Bob Brackett with Bernstein Research.

In the context of Woodsmith, you mentioned some great learnings involving the Sherwood Sandstone. In my personal life, great learnings have sometimes come with painful lessons. In that vein, can you give us an update on progress there?

Thanks for the question, Bob. Yes. So look, Sherwood Sandstones always recognized as a really, really tough part of the strata that we have to navigate to get to the bottom. Fundamentally here, this was for every meter a day that it took longer to get down there, you were kind of adding like a year to the production, right? So we had a base case plan that said that we could navigate this at around about 1 meter a day. And if it took -- if you could only do 0.5 meter a day, well, you could add a year to the production to the project. If you were able to progress at 2 meters a day, of course, you make massive capital savings. So these are the learnings that we were hoping to get.

And this is not just the rate at which you can penetrate that strata. It's the full cycle rate, i.e., you go down a certain number of meters, then you have to tub the shaft, line the shaft basically, you have to dewater it, et cetera, et cetera, and keep going. So these are the learnings that we've been going today.

So when we started off on this thing, we had really difficult time with the picks on the head. So just like a head on a continuous miner. Rock was so hard. It was sort of beating the picks up, but then we did a lot of work with De Beers and ended up with lab-grown diamonds as one of the abrasives in the pick. I just can't think of a better use of lab-grown diamonds. And the penetration rates improved phenomenally. We've also now done a cycle or two of understanding what the tubbing rates, the dewatering rates, et cetera, are going to be. Some lessons definitely in terms of the dewatering, but we're now at the point where I think we feel relatively confident that we are not going to be below our baseline 1 meter per day rate through the mine.

Our next question comes from the line of Dominic O'Kane with JPMorgan.

I have three questions. So going back to De Beers, could you maybe also give us an insight into what the net debt position is at De Beers currently?

My second question on Moranbah. You mentioned that a restart would contemplate remote operations. Could you just give us an indication of what utilization -- capacity utilization you can run at using remote operations? Can you run at the full previous longwall capacity utilization?

And then my third question relates to strategy. So I mean, Anglo over the last 12 months has done a remarkably good job in being a master of your own destiny. Arguably, the hard yards have now have been completed. And so looking forward, do you think as a management team, you have the head space to consider other strategic future options, including potential M&A options that might be available to you?

Okay. Thanks, Dom. John, do you want to deal with the net debt?

Yes. I mean the -- to be honest with you, the net debt on De Beers is sort of a function of how we internally finance. So I'm not sure it's really a sort of relevant number. It's not as if they're a stand-alone financed business today. So if you're trying to work between an enterprise value and equity value, then it's not really a relevant measure to look at. So it's really all intercompany financing. There's a small external revolving credit facility that sits at various levels within De Beers. But I wouldn't say that in the round, the debt number that sits in De Beers today is a tremendously important number.

Then Dom, on Moranbah, in terms of the remote operations. So the short answer to the question is, no, they are not as productive as the combination of remote and manual operations, only simply because you need a part of a crew underground at all times to deal with maintenance and so on. And as we go through the restart here, we want to be appropriately cautious as we determine what the atmosphere is in the gulf behind us going forward. And on that basis, we don't -- we prefer not to have anybody underground, including the maintenance crews while we take the first few runs at the face.

But we don't expect that, that will be the end state of this thing. This will always end up as a combined automated production, manual production facility, but it will just be moderated in its ramp-up by the fact that we'll run it on an automated basis. We'll then have to stop the shearer. We'll have to then wait for all our telemetry to tell us that we've got a stable atmosphere down there. We'll get the crews down. They'll do the maintenance that they need to do. They'll do whatever else the crews do down there, and then they'll come back up again, and we'll take the next cut.

So that just sort of, hopefully, in a little bit of detail gives you what -- we've had some great success with this, by the way. I mean we created the system. We developed the system. It's been implemented at Aquila for a number of years now and is working extremely well. I mean the productivity out of this system when it's in automatic mode is just improving every day. So it will be good on all fronts in terms of our ability to convert this into sort of a more stable operating method for the mine on a go-forward basis.

So yes, a little bit slower from a productivity point of view to start, but the intention is that then gets back into normalized operations in the same way that we're running Aquila today.

And then on strategy, do we have the head space? We've got loads of head space. There's a lot going on. There has been a lot going on. But of course, we are always looking at what we can do in terms of improving value in this company. Absolutely, our #1 priority was operational excellence and remains operational excellence. It doesn't matter what you have in your portfolio, you have to run all of these assets extremely well all of the time. And that remains a #1 priority for us.

The second, of course, is there is a lot of work to deal with these transitions. And of course, while we have these businesses under management, we still have a key responsibility in terms of the proper management of these. And so we absolutely remain focused on doing that. But very important for us to be sure that this transition concludes as successfully as possible. And of course, with that came a massive reorganization of the company, both just in terms of the shape of the company as a result of the number of assets it was going to have, but also in terms of our own operating model, what makes us genuinely effective. How do we continue to underpin our operational excellence, our project performance excellence, our marketing excellence. And so that also remains a very important part of management's mindset at the moment.

And then, of course, we have a number of wonderful endowments, all of which have real organic growth options and possibilities on. Many of them are now in relatively advanced stages of studies and permitting processes. And so that's tangible, in-our-control deliverable, and that's where we're putting an enormous amount of effort. To the extent that there's anything else available there, we will, of course, look at that and understand that relative to the rest of our options at the time that we need to do it. And I can promise you that if we needed to make head space for it, we absolutely would. But I think that there's a lot going on that's highly value accretive at the moment that we're very focused on doing.

That now concludes the question from the phone line, and I hand you back to the room for Tyler's closing remarks.

Great. Actually, I will hand it back to Duncan for Duncan's closing remarks.

Yes, that went bad quick. Thanks, Tyler. Look, thanks, everybody. Really do appreciate the time and the questions. We really are focused on delivering our strategy. Every day, we're making really good strides in doing so. Of course, there are a lot of things that we don't control. But if we don't control them, we'll find a way around them and get the results delivered. So thanks very much. Have a good day.

Good morning, and thank you for taking the time to join us this morning. On behalf of Kumba's executive management, I'd like to extend a very warm welcome to everyone in the room with us and those on the line.

My name is Penny Himlok, I'm Head of Investor Relations. And I'm joined by our CEO, Mpumi Zikalala; and our CFO, Bothwell Mazarura, who will present our interim results.

As you know, your safety is important to us. And before we continue with today's presentation, please allow me to take you through our safety procedures. Kindly note that there are no safety drills scheduled for today, so please follow the safety instructions in the event of an emergency announcement. Calmly make a way through to the exit from which you've entered the room and proceed outside to the front of the building to await further instructions from the safety marshals.

[Operator Instructions] Also, please note the disclaimer, particularly in reference to our forward-looking statements. And now turning to the agenda for today: Presentation will follow the usual running order. Mpumi and Bothwell will take you through our performance, and we'll follow that with the Q&A. We also have members of our executive team in the room with us, who'll be on hand for any questions at the end of the presentation.

Thank you, and I'll now hand you over to Mpumi.

Thank you, Penny. Good morning, everyone, and thank you for taking the time to join us this morning. Over the past few years, we've all navigated a period of heightened volatility whether that's macroeconomic headwinds, supply chain disruptions and now once again rising geopolitical tensions.

While the specific challenges continue to evolve, one thing has become clear, and we've been saying this over and over again, change is constant and we must stay agile and focused on what we can control. This principle has guided our decisions and it's helped us to remain resilient as a business.

Steel is not just essential for low-carbon infrastructure and manufacturing today, but also future innovations, economic growth and sustainability. Our world-class asset base and the quality of our resource endowment continue to stand out in a market that depends on steel produced with a better environmental footprint.

Kumba's high iron ore content products help steel producers minimize emissions while boosting productivity. These strengths are not just technical, they are strategic, and they matter more now than ever in the environment that we face. During the first half of 2025, we've continued to execute on our priorities, particularly unlocking value through safe, reliable and cost-efficient production. By focusing on operational excellence, we've delivered consistent production despite operating with a leaner workforce and certainly a smaller truck fleet, I'll touch on this a little bit later.

Importantly, we did so while holding our costs flat. We've also continued with our investment in UHDMS technology, which is an important step in this journey, optimizing the value of our rail capacity and positioning us to compete even more effectively in the global market for high-grade iron ore.

On the logistics front, I'm very pleased to say that we have seen performance stabilizing and that's thanks to the value-adding collaboration we are seeing with our partners and those include the National Logistics Crisis Committee, the Ore Users Forum, Transnet as well as our government. There's clearly more that we still need to do, but we certainly believe that we've got a solid foundation that we can continue building from.

Above all, our people are at the very heart of our business. Upfront, I just want to say a big thank you to our Board and to all our Kumba teams, and as always, that includes our service partner, employees as well. We are one team. We are making real progress with consistent delivery on our near-term priorities, while also holding -- or while also positioning the business for a more resilient and certainly sustainable future.

Now turning to our business overview. By focusing on operational excellence, we've achieved consistent production despite, as I said, using less equipment and having a leaner workforce. Importantly, and I'll say it again, I said it earlier, this performance was achieved while keeping our costs flat. EBITDA of ZAR 16 billion largely reflects lower iron ore prices, offset by higher sales volumes and the benefit of other income.

Our attributable free cash flow was ZAR 7.9 billion. And we also continued to create enduring value for all our stakeholders of ZAR 25.9 billion, and we have delivered an interim cash dividend of ZAR 7.2 billion to our Kumba shareholders, with ZAR 1.9 billion of this total dividend going to our empowerment partners.

And now to take a closer look at the safety and well-being of our people. Let me begin, as we always do, with safety because it is and will always be our first value. It's part of who we are, and it underpins everything that we do. For us, operational excellence is not just about the tonnes produced, it's about safe tonnes and making sure that each and every person who comes to Kumba goes back home safely every single day.

This year, we have now achieved 9 consecutive years of fatality-free production at Sishen and just over 2 years at Kolomela. These are remarkable milestones and a credit to our entire workforce who live our values every shift and every single day. That said, we are not where we want to be. Our total recordable injury frequency rate of 1.18 certainly shows us that there's still more work that we need to do, and it reinforces the importance of our fatal risk management and contractor performance management programs and our unwavering focus on continuous improvement, starting with what matters most.

On the health and wellness front, I'm equally pleased to report that we've had over 9 years without a single level 4 or 5 health incident. That's an important indicator because we care for the occupational health of all our people. Over and above this, our journey to wellness program for employees and all our service partners is an initiative that takes a holistic approach to health, looking not just at physical health, but also looking at mental wellbeing because, as we know, the safety and wellness of our people are 2 things that are deeply connected.

This is a journey, and we are committed to this. It's certainly part of our culture at Kumba. It is for our people. And again, I say this over and over again, our people include all our service partner employees as well. Now let me talk you through some of the real-life impacts of our commitment to sustainability. Sustainability is integral to our strategy and not just a corporate responsibility, it is certainly core to how we create long-term value. Through our sustainable mining plan, we work to make a meaningful difference in the communities we serve and reduce our environmental footprint.

We are seeing clear results. Through our ongoing mine optimization work, we've made measurable improvements in our water efficiency and carbon emissions, both key indicators of environmental health. And our thriving communities pillar, we've created over 670 employment opportunities outside our mines, and we are proud to have supported more than 10,000 learners and over 300 teachers across 19 schools in and around our communities.

One initiative I'm especially proud of is the launch of our Collect & Go Smartlockers, the first of its kind in our province, the Northern Cape province. These lockers bring chronic medication closer to the people who need it safely and on time. It's a practical solution that reflects the kind of innovation and compassion we want to be known for.

As a business with deep roots in South Africa, we also recognize our responsibility to help shape a more inclusive and equitable society. That's why I was so pleased that Kumba has achieved a Level 4 broad-based black economic empowerment accreditation, our third consecutive year of improvement. It reflects the real progress we are making, particularly in areas like gender diversity and inclusion. And finally, on the policy front, we continue to advocate for structural reforms that benefit the country as a whole, not just Kumba, but everyone. As many of you know, Kumba, alongside the Ore Users Forum, has been long-standing advocates for private sector partnerships on logistics.

This is something we'll return to a little bit later in the presentation. Taken together, these outcomes reflect our deep commitment to sustainable development through action, through partnership and certainly, through accountability.

Now moving on to stakeholder value creation. In what has been an extremely tough macro environment, I'm proud to say that Kumba continued to deliver meaningful impact, creating ZAR 25.9 billion in enduring stakeholder value, and this shared value goes to all our stakeholders. This is not just a number, it's a reflection of our deep commitment to inclusive performance.

It's also a key reminder that while we've had to make some pretty tough decisions over the past couple of years, those decisions have been critical to creating a stronger and more resilient business capable of delivering this performance.

Our economic contribution to the national fiscus amounted to ZAR 3.1 billion through income tax and mineral royalties. These are critical revenues that support essential services and infrastructure for all South Africans. We are also returning ZAR 7.2 billion in dividends to our shareholders, of which ZAR 1.9 billion will go to our empowerment partners.

And as a reminder, the empowerment partners include our communities, through our Sishen Iron Ore Community Development Trust (sic) [ Sishen Iron Ore Corporation Community Development Trust ], and they include our employees through our Semela employee share ownership scheme. And that's sharing the value we create in a tangible and equitable manner.

To support sustainable livelihoods, we continue to draw strength from our deep connection to the Northern Cape province, where 80% of our employees reside. Our investment in the UHDMS project and the extension of Sishen's life of mine ensures that we can continue to add value to all our stakeholders for many years to come.

On the procurement front, we spent ZAR 8.2 billion on goods and services with BEE suppliers, including ZAR 1.4 billion with businesses from and amongst our communities, helping to build local economies and grow entrepreneurial capacity. And finally, we invested ZAR 135 million in direct social investment focused on the areas that matter the most: health, education, enterprise development as well as skills upliftment in our local areas. These are foundations that enable our communities to thrive, and we remain deeply committed to walking this journey alongside our communities.

This is what shared value in action looks like, and it's how we are building a more resilient, inclusive and sustainable future together. Now I will take you through our operational performance. Waste mining was lower in the first half, as we continued the sequential execution of our optimized mine plan, a plan that also included rightsizing our mining fleet and workforce last year. We produced 18.2 million tonnes, which reflects our flexible and integrated approach to production. We took advantage of improved rail performance and proactively drew down on the high levels of stock at Sishen and at the same time, we increased production at Kolomela to maintain overall output and balance our system.

Despite experiencing 2 derailments during the period, we managed to increase ore railed to the Saldanha Bay Port by 4%, reaching a run rate of 83% of contractual capacity, and this compares to the 79% that we achieved for the same period last year. This also meant that we were able to double our finished stock levels at Saldanha Bay Port to 1 million tonnes. Having optimal stock levels at the port is critical, and the combination of higher portside stock and improved equipment availability supported a 3% increase in sales during this period.

On the next slide, we'll take a closer look at our operational and cost performance. Our forecast for this year has been unlocking in the benefits of the reconfiguration that we implemented in 2024. We are also managing Sishen and Kolomela as an integrated mining complex, and we found the incremental flexibility helpful in optimizing performance across both sides.

Against the second half of last year, we've increased waste mining by 19% and production by 5% in the first half of 2025. As we move into the second half, we expect to make further progress, particularly as seasonal weather conditions begin to improve. We are also seeing continued gains in equipment efficiency, thanks to the optimized mine plan. For example, we've been able to reduce our truck fleet by 27%, while increasing operating time by 4% and haul truck availability by 3%. This has also allowed us to maintain the run rate of savings attained last year with the once-off restructuring cost not recurring. We realized an additional ZAR 661 million in cost savings, bringing our cumulative savings, since the reconfiguration that commenced at the beginning of last year to now, to a figure of ZAR 5.1 billion.

All these elements have contributed to our C1 unit cost at $39 per tonne, and we believe that we can continue to mitigate inflation and hold that cost level for the full year. Bothwell will take you through the details of the savings and the financial impact in just a moment. But just before that, let's turn on to Transnet's logistics performance.

Overall, we've seen encouraging signs of progress in the last 6 months. In terms of rail performance, that improved to 83% of contractual volumes, which together, with improved equipment availability at the Saldanha Bay Port resulted in the 3% increase in our sales. This progress is a direct result of the partnerships that we have in place, particularly the technical support that's provided to Transnet and that's done by Kumba in collaboration with the rest of the other users.

And as you know, we call ourselves the Ore Users Forum. That said, we still need to close a significant gap to our contracted volumes, and this is on both rail and port. And bridging that gap remains a key priority for us. To support that, the Ore Corridor Restoration program is expected to unlock further improvement over time.

I'm also pleased that we've now finalized the mutual cooperation agreement between Transnet and the Ore Users Forum. And this is an important milestone. It formalizes the working partnership and enables urgent maintenance work to be delivered faster, more efficiently and with greater alignment amongst all of the partners. In addition to the Mutual Cooperation Agreement or MCA, further long-term funding mechanisms are being evaluated by government. Steady progress also continues to be made on the logistics structural reform aimed at increasing long-term private sector partnership.

Lastly, Kumba, as part of the Ore Users Forum, is in the midst of working through government's recently announced private sector participation process. At the end of May, the Ore Users Forum submitted a response to the request for information phase and that response was submitted to the Department of Transport, and we now await the release of the commercial request for proposal process that will commence a little bit later this year.

I will now hand over to Bothwell, who will take us through the numbers. Thanks. Bothwell?

Thank you, Mpumi. Good morning, and thank you all for joining us. You've just heard Mpumi speaking on the progress we have made through the operational excellence and our focus on efficiencies. Our work on cost optimization and maximizing our product premia was further supported by increased sales volumes on the back of improved logistics.

The average realized FOB price of $91 per tonne was 7% lower than H1 2024. This is as iron ore prices decreased by more than 14%. Despite the drop in prices, I am pleased to say that our premia made a positive contribution overall. I will elaborate on this in the next slide.

While the lower pricing environment impacted revenue, the progress we have made in reducing costs, together with other income contributed to our EBITDA margin increasing to 46%. Our breakeven price, which includes all-in cost and stay-in-business capital, net of our quality premiums was $64 per tonne, and it benefited from less pronounced timing effects as well as lower freight rates. Headline earnings were flat at ZAR 22.26 per share, and our returns were maintained at 48%.

On the back of our financial performance, the Board declared an interim dividend of ZAR 16.60 per share. Now let's take a closer look at the market environment. China's property markets remain persistently weak. This was partly cushioned by strong exports as steel output contracted by 2% in the first 6 months of the year. However, these strong exports display steel output outside of China, which fell by 4%.

Prices have been supported by iron ore supply remaining flat. Increased shipments from Australia and Brazil were offset by nonmainstream miners reducing production as iron ore prices declined. Despite the pressure from trade tensions, prices are averaging around $100 per tonne, and we continue to see prices supported at the marginal cost of production, which is around $90 per tonne.

On a more positive note, our lump premium continued to find support despite lower prices, and this was primarily due to falling coking coal prices. However, the headwinds are likely to persist given the uncertain global trade environment.

China steel exports are trending down and output could fall further if production cuts are implemented in China during the second half of the year. Now let me turn to our product quality and customer strategy. Our qualities position us well to achieve market-leading realized prices through the cycle. Over the long term, we continue to target sales of between 45% and 55% to markets outside of China. In recent years, we have seen weak demand in these markets compared to Chinese demand. For the first 6 months of the year, we have seen a similar trend.

Sales to China rose to 58%, reflecting relatively higher Chinese steel production underpinned by strong exports to markets outside of China. The chart on the top right shows the premium against the equivalent Platts FOB index. If we break this down for the half year, Kumba's product Fe was 64.1%, and this is above the Platts 62 index and ahead of our peers.

This earned us a quality premium of $4 per tonne. Our lump proportion, which increased from 64% to 67%, gave us an additional $7 resulting in overall quality premia of $11 per tonne. Our ability to place products outside of China and negotiate margins was impacted by weak steel demand outside of China.

Consequently, we saw a negative $4 price premium. Of this, $2 relates to a negative marketing premium, while the remaining $2 were due to the timing effect of our shipments; as you know, these arrived 2 months later at our customers in China. It was also impacted by provisional pricing effects of unpriced sales late last year. Overall, we achieved an average FOB export iron ore price of $91 per wet metric tonne, which is the $7 of quality premia earned above the benchmark iron ore price of $84 per tonne.

If I turn to our EBITDA. In the first half, we can see the benefit of our focus on operational excellence. Higher sales volumes, together with continued cost savings had a positive impact on our EBITDA. I'm pleased that we continued to see a savings benefit from our optimized mine plan and operational excellence, which has kept operating expenses broadly flat.

This is helping us to offset much of the impact of the iron ore price decline. As I mentioned, we saw a lower iron ore price and the rand strengthened against the U.S. dollar, which, coupled with cost inflation and lower shipping revenue, weighed negatively on our EBITDA. In this period, we also received a boost from other operating income and this relates to compensation for logistics underperformance.

Now let's turn to our breakeven price on the next slide. As I mentioned, our breakeven price reflects our all-in costs. This includes sustaining capital and is net of the premiums we earn over and above the Platts 62 index. Compared to 2024, our breakeven price has improved by $10 to $64 per tonne. This puts us in a more resilient position to withstand market headwinds. This year, we kept costs flat and lower sustaining capital helped to offset the negative marketing premium resulting in a dollar per tonne increase in the breakeven price before we take into account the external factors.

Lower timing effects, which I touched on earlier, coupled with the higher lump premium and lower freight rates reduced our breakeven price by $11. Our goal is to maintain or improve our breakeven price by being more proactive on our cost-out program and focusing on improving product premia.

Now let's take a closer look at our cost savings. Let me start by clarifying our cost reduction targets. Our cost savings target for 2024 was between ZAR 2.5 billion and ZAR 3 billion. In February, I then stated that we would target a further ZAR 2.5 billion to ZAR 3 billion of savings for 2025. This brings the cumulative savings to between ZAR 5 billion and ZAR 6 billion for the 2 years.

Our actual savings achieved are made up of: firstly, ZAR 4.4 billion in 2024, as we reconfigured our business; and secondly, ZAR 661 million saved during the first half of this year. This was largely comprised of reduced contractor mining volumes and the nonrecurrence of contractor settlement and termination benefits. This brings our cumulative savings for the 1.5 year to ZAR 5.1 billion, which is within the 2-year target range.

We expect to maintain this level of savings for the remainder of the year, and this positions us well to achieve both our C1 and mine unit cost guidance. Other cost elements related to freight and distribution, royalties, the impact of stock movements and capitalization of stripping costs also had a negative -- had a positive impact on our operating expenses. This was partially offset by an increase in owner mine volumes; noncash costs, which include depreciation and other costs.

The net result of all of this is a 1% reduction in total operating costs compared to the same period last year. We achieved this outcome without compromising on the safety and health of our people, while also maintaining essential costs such as repairs and maintenance, and this -- they help us to drive equipment reliability and operational efficiency.

In February, I also said that for the period 2025 to 2027, we have set a target of between $39 and $40 per tonne for our C1 costs. We remain committed to achieving this and expect to end the year at $39 per tonne. This will be driven by an increase in production at Sishen and continued improvements in operational efficiencies, sourcing and the efficient use of consumables.

Now let's move on to the impact of these savings on our mine unit costs. Sishen's unit costs increased by 3% to ZAR 557 per tonne. This was mainly due to a 6% decrease in plant production. The cost of inflation was more than offset by the continued benefit of optimizing our mine plan.

In the second half, we plan to increase mining volumes as we replenish our stockpiles as well as increasing plant production. This will account for the improvement in H2 unit costs to conclude the year within our guidance of between ZAR 510 and ZAR 540 per tonne. Kolomela's cash unit costs improved by 23% to ZAR 329 per tonne.

Being a smaller mine, Kolomela's unit costs are more sensitive to volumes produced. As a result, cost inflation of 3% was more than fully offset by a 12% increase in production. Our cost optimization initiatives, coupled with higher capitalization of deferred stripping costs and lower work-in-progress utilization provided a further boost. Kolomela's unit cost is currently well below the full year guidance of between ZAR 430 and ZAR 460 per tonne. In the second half, an increase in iron ore mined and lower plant production will result in Kolomela's unit costs ending the year closer to the lower end of our guidance.

If I turn on to CapEx. Capital expenditure for H1 totaled ZAR 3.8 billion and is broadly flat compared to last year. It's made up of the following: firstly, expansion capital of ZAR 650 million, and this is being phased in line with the implementation of our UHDMS technology project.

The second part is stay-in-business capital, and this was ZAR 1.3 billion. It's mainly from spend on capital spares and mining fleet replacements of about ZAR 800 million, and this is to sustain the business. The balance was spent on safety, regulatory and infrastructure projects.

Lastly, deferred waste stripping CapEx of ZAR 1.9 billion was mainly driven by the higher stripping ratio at Sishen's North mine. Our full year CapEx guidance remains unchanged, and it's between ZAR 9.5 billion and ZAR 10.5 billion.

In terms of expansion CapEx, the construction of the first modules of the UHDMS project is on track, and we expect to spend between ZAR 1.4 billion and ZAR 1.6 billion for the year. Stay-in-business CapEx is expected to be between ZAR 4.2 billion and ZAR 4.6 billion and will be spent mostly on our fleet and capital spares as we improve HME reliability as well as on plant infrastructure. Deferred stripping CapEx is expected to increase to between ZAR 3.9 billion and ZAR 4.3 billion due to mining in higher strip ratio areas in comparison to the life of mine strip ratio.

Now if I turn to our capital allocation. Our disciplined approach to capital allocation remains unchanged. We have a high cash-generating business, and we continue to prioritize capital to sustain our business. This is followed by consistent returns to shareholders before we allocate capital to discretionary options. These include high returning capital projects and additional dividends.

For the 6 months under review, we generated cash of ZAR 10.5 billion after paying for sustaining capital. ZAR 5.2 billion was used to pay base dividends to shareholders before allocating ZAR 3.9 billion to discretionary capital. This was largely focused on progressing the UHDMS project together with additional dividends paid over and above the base.

Our dividend policy remains unchanged. We continue to target a payout ratio of between 50% and 75% of headline earnings. We delivered a healthy return on capital employed of 48% and attributable free cash flow of ZAR 7.9 billion. This has underpinned our Board's decision to pay out ZAR 16.60 per share of dividends for the first half.

This results in a 75% payout of our headline earnings and an annualized yield of 12%. Our focus for the rest of the year remains on reducing our costs, maximizing the value of our products and sustaining our competitive position. Our strong balance sheet positions us well to navigate current market uncertainty and continue to deliver key projects, while sustaining returns to all our stakeholders.

Now before I hand back to Mpumi, I'd just like to say a few words. Now I must say Penny refused to give me a physical microphone for this moment because she thought I might use it as a mic-drop moment. But this is my last set of results. And I would like to thank Mpumi, my colleagues on the ExCo, the Kumba Board, my finance team and all of our stakeholders for all of your support. I have enjoyed every moment of the journey, and as a shareholder, I look forward to seeing Kumba's continued success. Thank you.

Thank you, Bothwell. I'm not sure about the drop-the-mic moment. Bothwell is young at heart, that's why he talks about the drop-the-mic moment. But jokes aside, Bothwell before I continue, I would actually like to take this opportunity to thank you on behalf of the Board as well as a personal thank you from me for your contribution to Kumba over the last 8 years. You've been an integral part of our leadership team and under your financial stewardship, Kumba has not only delivered strong operational and financial performance, but we've also advanced critical work around our sustainable mining plan.

And all of this, and this is especially important because finance people are not known to have a heart, say, sometimes. I think for me, the biggest thing is this -- is that this was supported by your big heart and a genuine care for people and a relentless pursuit of value creation, and so from all of us, a big thank you to you, Bothwell. Please give Bothwell a hand.

But then coming back to the room. As a reminder to all of us, this may be Bothwell's last set of results presented, but he is not leaving us just yet. He remains fully committed to the strategic delivery of our business for the second half of this year. And as announced a couple of weeks ago, we will have a structured handover between Bothwell and our incoming CFO, Xolani Mbambo.

Now let's then come back to the presentation and look at the rest of the year. As we showed earlier, our focus on operational excellence continues to gain momentum, and it's helping us unlock more value from our existing assets. Through our integrated mining complex, we are also capturing opportunities to increase our shared learnings on safety and operational execution.

Our UHDMS project at Sishen is another example of how we can benefit from our learnings by applying a phased execution approach. Now let me provide you with an update on how we are progressing with our critical project, the UHDMS project. As you know, we resumed work on the project in November 2024, beginning with the fabrication and construction of the long lead items, including the modular substation, which is now well underway.

To date, we've awarded all major construction packages. The dismantling of the first coarse module is complete, and the assembly of the new UHDMS beneficiation equipment and associated infrastructure is actively underway for this first module -- the first coarse module.

In parallel, we started work on the first fines module, which is also on schedule. Construction of the new coarse modular substation is in progress and is expected to be installed during the third quarter of this year. We've also completed the fabrication packs for the next coarse module with dismantling and construction for that next module set to begin in the fourth quarter of 2025.

The 3D model in the center of the slide indicates the progress we have made as we prepare to convert the first coarse module. And on the far right, we can see the construction of the fines modular substation. Overall, we plan to convert 6 out of the 8 coarse modules and 5 out of the 7 fines modules.

The main tie-in of the project is scheduled for the second half of 2026, that has not changed; and we expect the plant to ramp up steadily, reaching full capacity by the end of 2028. As we are following a modular execution approach, we'll be able to keep the remaining modules and the existing jig plant at Sishen fully operational during the construction of the project.

We will be supplementing production with finished stock, product stock, to ensure sales consistency during the entire period. And from a capital perspective, we remain very disciplined. The ZAR 1.5 billion allocated for this project is fully aligned with our phased execution plan, and I'm pleased to say that we are on track and we are on budget.

We are excited about what this project represents for Kumba. UHDMS will significantly improve the quality and yield of our ore allowing us to triple the volume of premium production. It is also a vital enabler of our future and a key part of how we will continue to create sustainable value for all our stakeholders.

Let's now take a closer look at the broader market development for premium grade iron ore. Now let me take a moment to highlight how we see Kumba's position improving in the context of global iron ore market dynamics. If you take a look at the left-hand graph, you'll see that Australian producers have faced increasing pressure on product quality over the past 2 years.

The majors are increasingly shifting from 62% to 61% Fe, reflecting a broad trend of declining resource quality. By contrast, Kumba's average product quality is set to improve further through the implementation of the ultrahigh dense medium separation project. That positions us extremely well in a market where high-grade iron ore is increasingly valued for its efficiency in the blast furnace technology as well as for its role in reducing carbon intensity.

Globally, over 70% of blast furnace capacity is less than 20 years old, and most of it will remain in service for at least another 20 years. Blast furnace steel making will, therefore, remain important as shown in the right-hand graph. Together, blast furnace and DR steelmaking will continue to account for more than 60% of global production. Both Kumba standard and premium products are very well suited for the blast furnace route.

Higher grade ore helps reduce carbon emissions for blast furnace steelmaking, therefore, tripling our volume of premium products will help our blast furnace customers reduce their carbon emissions. In addition to blast furnace steelmaking, we see more of our premium product grade ore going towards DR steelmakers for use in DR production, which is a carbon-light method of steelmaking.

In short, as mentioned before, the UHDMS project will triple our supply of premium grade material giving us the scale and flexibility to meet the growing demand for high-quality iron ore as the industry evolves. This is where our product quality, our technology investment and our long-term strategy come together, and it's a key differentiator for Kumba in the years ahead.

And that then brings me to our full year guidance. Subject to logistics performance, total production of between 35 million to 37 million tonnes is expected to be made up of an estimated 26 million tonnes from Sishen and 10 million tonnes from Kolomela. We have maintained our sales guidance of between 35 million to 37 million tonnes, and our C1 unit cost guidance remains unchanged at $39 per tonne. And as you've heard from Bothwell, capital expenditure is expected to remain between ZAR 9.5 billion to ZAR 10.5 billion for the full year.

Now before moving to the Q&A, I would like to yet again remind you of our value proposition. As we look ahead, focus remains critical in this dynamic market environment. For the remainder of the year, our priorities are clear. This is to deliver on our guidance and continue to drive improvement where it matters most: in waste mining, in production and in cost efficiencies with a particular focus on Sishen.

In terms of our logistics performance, we remain committed to the partnerships that are making a positive impact, and we are also doing work around private sector partnerships ahead of the potential request for proposal phase. Certainly, we can't share more around this because all of us are waiting for government to rivet back around how that phase will look like.

And as I've just talked through, we are on track with our UHDMS project, and we expect to reach an important milestone as we complete the first module conversions in the fourth quarter of this year and push towards the completion of the major tie-in in 2026. Beyond UHDMS, we are developing a strong pipeline of options to make sure that Kumba is well positioned to meet evolving market demand and long-term value creation.

At the core, Kumba is built on strong fundamentals. We have great people, committed partnerships across all our stakeholder base, world-class assets and a commitment to perform. I have no doubt that we will continue to face unexpected turns in the path ahead, that's something that we've seen over time. However, I have real confidence in our future because we are focusing on the right things.

With that, I will now hand over back to Penny, who will lead the question-and-answer session. Thank you. Penny?

Thank you, Mpumi. Before we open for questions, I'd like just to take a few moments to express my sincere appreciation to Bothwell. Your leadership has been invaluable, Bothwell, from navigating volatile markets to steering our financial strategy with clarity and conviction. You've really been a steady hand on the wheel.

Thank you for your guidance, your integrity and your unwavering focus on what really matters most. I and my colleagues throughout Kumba, I think I speak for a lot of people at Kumba and really look forward to making the most of the next few months, as we deliver on the targets set out for the rest of this year. And of course, I, certainly, and I'm sure a lot of other of my colleagues look forward to favorable engagements with you as a long-term shareholder.

We'll now open for questions first in the room, followed by the conference call line, and then we'll move to the questions sent through on the webcast.

Just I voice my thanks from an analyst community to Bothwell as well. I think your guidance and your financial -- the financial work that you've done has been exceptional. So you've been a real asset to Kumba.

Let me just ask an operational question, I'll give you a break, Bothwell. So just an operational question. Just on Kolomela, you've got quite low cost ZAR 329 for the first half. You sort of indicated you want to get to the bottom end -- or you expect to get to the bottom end of the range for the year. That means the second half is quite a lot higher.

It's quite a significant jump up. And I wonder if operationally, if you could just talk about what that means? What is actually going on in terms of stripping and in terms of production? It seems to be quite volatile at Kolomela.

And then I just noticed in the life of mine on the last slide, on your guidance slide, Kolomela has gone from 11 to 16 years, Kapstevel was in the previous slide. It's in this slide, and it sort of speaks about a lower stripping extension to life of 5 years. So I just wonder if you could speak about that a little bit. Is that production profile flat? Because we seem to be talking about a second half with high stripping and then a life of mine extension on lower stripping and it's all a bit sort of up and down. I'll leave my question there.

Thank you. Thank you, Tim, and I'll ask Gerrie to add to this. So firstly, you would have seen that from a Kolomela perspective, we have actually not changed guidance. So the mine plan that we started with when we set our guidance still remains exactly the same. You would have seen that clearly, Kolomela from a production perspective produced significantly more in the first half and that being the denominator clearly has led partially to Kolomela having a lower unit cost, but we've guided to still end the year at the same levels of guidance because ultimately, we still mine -- want to mine exactly the same quantities that we set up to mine at Kolomela.

So I don't see it as volatility. I actually see it as the Kolomela team really having done well from an efficiency perspective, but with us being very much focused to ending of the year in the same position. Gerrie?

Thanks, Mpumi. So Tim, I think what's important here is the life of mine strip ratio for Kolomela is higher than the current stripping ratio. So if you then consider over the life of mine, the waste stripping will increase, and of course, when we look at this year, the stripping is in line with the optimized mine plan.

However, in future years, it will increase. But on the other hand, Sishen will reduce. So it does balance over the life, and that's why we use both operations to manage the overall stripping as well as the cost base. So when you look at the life of mine strip ratio, you'll see that will increase over time as it obviously ramps up to those levels.

And then later in the life, it reduces again to obviously balance out. So I don't know if that answers your question. This was built into the update that we did at full year results. So Kapstevel South was fully included and is fully included in the resource and reserve statement.

Makes sense.

Absolutely.

And I think the key one, Tim, is the resources and reserves statement that we published then has actually not changed. And that was aligned to the increase in LOM.

We have a question from Brian.

Timo to you, if I may. The marketing premium for this period, minus $2, I assume that's got to do with Europe-China mix. If you could just run through that? And then that slide on Page 25 is quite interesting with the scrap DRI, blast furnace, just wondering if you can just chat to that a little bit more in terms of also what sort of growth numbers you've got for China in that?

Not an entirely unexpected question, Brian. But you're exactly right, that marketing premium turning negative has got everything to do with the split between China and ex China sales. China has been under pressure, minus 2% for the first half of the year, that's led to record exports of steel from China, more than 120 million tonnes.

All of that steel is finding its way into other markets outside of China. So it's been putting a lot of pressure on those markets outside of China. There, we're seeing steel production in Europe down 4%; in Japan and Korea, down 5%. I mean, those are important markets for us, so that pressure has led to a different mix between the China and ex China sales.

We are not at the 45% to 55% range where we'd like to be. Outside of China was only 42%. And that's a pity because outside of China, we're realizing better prices. So if that ratio is low, that has an impact on our marketing premium, and that's exactly what we've been seeing in the first half of this year.

Your other question on the blast furnace, DRI mix. I think Mpumi actually explained as well, so blast furnaces are going to remain important for many, many years to come. The average age of a blast furnace globally is 17 years. They're going to be around for at least another 20 years. So that blast furnace proportion is always going to remain very, very important.

DRI will see a very, very significant increase, but it's off a much lower base. So even at the end of the horizon that we were showing, it's still going to be a relatively small portion, but DRI and blast furnaces combined that's going to be fed by iron ore. That's not the scrap that you're seeing at the top. So more than 60% of the steel production, raw material mix will be in the form of iron ore.

And we are well positioned there, right? With that mix, our Kumba product is primarily a blast furnace product.

As Mpumi points out, blast furnaces need to decarbonize to do that, a higher grade ore is going to be very helpful to do that using a lump where you don't need to incur the emissions from sintering or pelletizing, that's also going to be helpful. So we are well positioned to serve that blast furnace market. And some of our best quality premium iron ore might also make its way into DRI production. That would be the icing on the cake. That's not a pipe dream because we are selling to DR steelmakers, but that's a relatively small portion of our overall sales, but clearly, if we can expand that further, that will be a further positive.

I have a question from Thobela.

Yes, Bothwell, I'll start with you and will not let you off the hook yet. Just a question around that other income on that EBITDA waterfall, could you just sort of give us a breakdown of what contributed to that other income? I mean I'm not sure if I've seen that number before in one of your slides, maybe if you could just take us through as to, I think, what is in there? And then perhaps also maybe to clarify for me. I think there was a mention that it was related to compensation due to lower rail. If you can just maybe explain to us as to going forward, how should we think about that particular number?

And then Mpumi, for you, just -- I know you can't talk too much about Transnet, but maybe if you could just explain what is this sort of Mutual Cooperation Agreement that has been signed with Transnet? What is it expected to deliver? Because there's been a few things that have been happening around Transnet, we just need to get clarity on that.

Great. Thanks, Thobela. So the other income is compensation from Transnet for the logistics underperformance. We do have a take-or-pay contract with Transnet, which means that certain volume thresholds if they don't provide the required volumes, they have to pay us penalties. If they provide and we don't take up those volumes, we have to compensate for them.

So as you can imagine, over the last few years, we've had a lot of underperformance in terms of that contract from Transnet. The way the contract mechanism works is that at the end of each year, we do a reconciliation of the volumes delivered, and we agree that reconciliation between the parties and agree on who needs pay who in terms of that take-or-pay agreement.

Now as you can imagine, with the years of protected underperformance, those conversations have not been easy and the reconciliations have not been straightforward because you do talk about real underperformance versus things that are outside of their control, like force majeure issues and so on. So it has taken us about 3 years to get to a settlement in terms of what that entails and that's up to the end of 2024 and that's why you see a number of ZAR 940 million coming in as other income, and it's quite significant because of the significant underperformance, but it's a culmination of -- it's an accumulation of a few years of penalties.

Again, the way we account for it, we don't account for that until we've reached agreement and we are certain that we are going to be able to collect that amount. And therefore, I wouldn't start modeling that every year or every 6 months, I think it's something that we do on an annual basis, as I said.

Yes. Thanks, Bothwell. And then Thobela, on the Mutual Cooperation Agreement, so we have been working together with Transnet as Kumba and as part of the Ore Users Forum, and we've previously spoken about the partnership around the independent technical assessment, and now the partnership around the co-creation of the Ore Corridor Restoration program.

What the Mutual Cooperation Agreement does. And this is an agreement between the Ore Users Forum and Transnet, clearly, we are part of the Ore Users Forum, is that it will allow us to step in and execute urgent maintenance work on behalf of Transnet. Clearly, we will be refunded. But this essentially brings in a more structured approach just around the approach when it comes to the execution of urgent work. So we're excited about it. But as I indicated, there are additional engagements that are taking place, and that's led by government, just around how other work should essentially be funded in the short term. Yes.

Okay. I don't see any other hands. Can we please go to Tim.

Yes. Sorry, I was looking at the wrong life of mine on the previous slide. Just on CapEx, the SIB is bumping up quite a lot in the second half. Is it -- is there particular SIB programs that are coming to the fore? Just that one. And then secondly, we just noticed that amongst the global miners is that the benchmark seems to be moving towards 61. You've mentioned that it was a very helpful slide with the [indiscernible] elements noted. Do you think, Timo, that's going to give you additional premium or do you think that's just discounts that have been sitting in their sort of product mix that kind of it's almost a lost -- or it's already accounted for?

With the SIB question. So you are quite right. If you look at the profile of stay-in-business capital, it's lower in the first half and higher in the second half. That sort of profile is not unusual. We saw the similar profile last year as well. In terms of the full year guidance remains exactly as we had guided and that profile is usually sort of determined by the timing of deliveries.

We have got some long lead items, which typically we order at the beginning of the year and they tend to be delivered in the second half of the year and also some of our execution in terms of maintenance programs and so on. We also try -- so plant maintenance, for example, during the shut with Transnet in the second half of the year. So that determines the profile of CapEx, but we will come in within the full year guidance as we had guided.

Timo?

Tim, certainly, because we start measuring against some -- another index, doesn't mean that the value of our product goes up all of a sudden, right? So that shouldn't have a direct impact on the realized price. But if you then start measuring against that lower index, the premium against that index should be high, but that index itself will be lower, right? So net-net, it doesn't actually change.

But it does give you an opportunity to more clearly differentiate yourself in terms of your product quality when everyone else is moving to a lower index. So indirectly, there is a bit of an opportunity, but the value of our product as such isn't going to change because of this happening.

So that's sort of slow change...

Maybe, maybe.

All right. I really don't see any further hands at this time. Could you please move to the conference call line?

We have a question from Richard Hatch of Berenberg.

Just one question for me. Just on the reduction of your fleet capacity, I just wonder if you can just give us the confidence that you're not cutting the fleet too close to the bone and therefore, you'll have issues in the next couple of years just in terms of truck availability and such like. I just wanted -- just perhaps if you can just give us more -- a bit more confidence on the fact that the fleet hasn't been cut to the point where if you do see some unexpected failures that you'll be -- you have flexibility issues?

Yes. Thanks, Richard. So the cutting of the fleet and for our own fleet essentially means that we've parked the fleet, and we are maintaining it in order to make sure that when we do ramp up or if we do ramp up, we should be able to go back and actually restart the fleet.

And Andre, who looks after the operations for us is here, he has essentially made sure that this is kept under a safe area because miners can sometimes go and scavenge parts, but I'm comfortable that that's not the case. So the fleet is there, but we are doing the right thing because essentially, we're sweating the fleet that we are running. And that's why if you look at the operating time measure, which essentially says that for the fleet that we are running, are we actually getting more value from it, that measure has gone up.

And you would have seen that we spoke about truck availability specifically and spoke about the 3% improvement in availability. That's actually good. So for me, how I look at this is the fact that our teams have got a slightly reduced fleet that they are maintaining, but it actually gives them more time on that fleet and in turn, that actually allows us to get better value from an operational excellence perspective. So it is absolutely the right thing to do.

Next, we have Dominic O'Kane of JPMorgan.

I just have a quick question on capital allocation and the dividend. So the first half, you paid at the top end of your dividend policy range. You have a very significant net cash position. How should we think about the dividend as you move into the second half of the year?

And I suppose, specifically, we saw your former sister company, Valterra Platinum, during the first half payout a very large special dividend. Is there any consideration given at the Board level as to whether you're carrying an appropriate level of cash on the balance sheet?

Yes. Thanks for that, Dominic. You're quite right, we have paid at the top end of our target range. We target 50% to 75%, we paid 75% this time around. And we have shown that we still kept just under ZAR 9 billion of cash on the balance sheet at the end of that.

I think the usual consideration is just around the cash that we hold on the balance sheet. First, we have a certain amount of restricted cash that we do have to hold for some of our margin variations from a marketing entity perspective, that remains unchanged.

The other thing we typically look at, and, especially at interims, is the profile of our cash flows. So as I was talking about CapEx, early, I did mention that CapEx is back-end loaded and we see more cash outflow in the second half of the year, so we take that into account.

We also look at what our working capital movements look like between the 2 halves, but I think overarching that, which we can't ignore in thinking about this dividend is just the general environment that we are operating, and it's a bit uncertain from a global dynamic perspective. And we have seen the iron ore price come under significant pressure lately.

So it's that period of uncertainty that has dictated that we'd be just a little bit more cautious, and given that it is still interim and we still have the rest of the year to see how it unfolds. So we think paying at the top end of our range is a good balance for our shareholders and with us being a bit more cautious.

The next question comes from Ian Rossouw of Barclays.

Just 3 quick questions from me. Just on that restricted cash, Bothwell, can you give us a sense how much that is in isolation? And then just on the Transnet shut in the second half of the year, do you mind just giving us an update whether that's 2 weeks or 3 weeks and does it -- some of it falls still within Q3 or is it mostly in Q4?

And then just on the contractual rail performance. You said that -- sorry, the utilization of that rail, which was much better, was that due to overall volumes in the rail for other users as well going up or was it more Kumba taking a larger market share? And just thinking over the medium term, whether that's an opportunity to get more market share if some of the other users on the rail line is not, I guess, delivering on their plans or volumes?

Okay. Thanks, Ian. Restricted cash is around ZAR 2 billion.

Yes. And then Ian, the Transnet shutdown will take place in October, beginning of October, and the period is similar to what we've seen in previous years. It's typically been 10 days. We are looking at 11 days, so it's the same period. And similar to before, we are, as part of the Ore Users Forum, working with Transnet on the planning of that shutdown. And what pleases us is the front-end loading of that plant.

Because if you plan significantly, then the execution will actually go well. So we are essentially repeating a recipe that's worked for us. And then on the real contractual performance, it's actually equitable. So all the users have got their volume allocation, and if there's underperformance, that's applied consistently across the board. And for us, that's absolutely the right thing to do. And as you can imagine, clearly, everyone has got a contractor, so everyone gets impacted in an equitable manner.

At this stage, we have no further questions from the lines.

Thank you. We can then switch over to the webcast questions. I have a question from Nkateko from Investec. This is for you, Mpumi. Your messaging on Transnet progress feels positive, how should we think about the production guidance for FY 2027, which currently reflects 0 improvement compared to FY 2024? I'm not looking for a number here, but just directional trend.

Yes. Thanks, Nkateko. So I keep saying that what we are seeing is greater stability. So essentially, we come from a period where we saw significant declines in performance. And we're actually encouraged by the stability that we are seeing. And then if you think ahead, the gaps that we identified during the independent technical assessment are still there, and that work still needs to be done. And for that work to be done, you can imagine the system will have to essentially shut down for the work to be executed.

Up until the significant portion of that work has been executed, I don't see us gaining significantly more levels from an operational performance perspective. So how do I see guidance? It's exactly how we've guided. As you note, we've guided flat for the 3 years, and that's to allow for the fact that the fundamental work still needs to be done, and certainly, the system will have to be stopped to conduct that work.

So I think what you most probably should think about is the fact that historically, we've spoken about the high levels of uncertainty and the high levels of volatility that you've seen from a performance perspective. So what encourages us is the greater levels of stability. And we'll actually continue working with Transnet, the Ore Users Forum and all the other partners to make sure that the execution of that Ore Corridor Restoration program takes place.

Thanks, Mpumi. We have a question from Shilan Modi from HSBC. How do you anticipate Simandou volumes entering the market to impact Kumba's price realizations going forward? That's for Timo.

So Simandou volumes, we're going to see the first volumes later this year and then a 30-month ramp-up to take it to 60 million tonnes. Sometime in the middle of 2028, we should see that run rate. For us, what's good is that Simandou is almost all of it is fines, no lump. So our position in lump is not going to be impacted by Simandou. So where you see in our price realization chart, always a big contribution from our lump premium, that will continue, and it's not going to be affected by Simandou.

So Simandou, it's going to be mostly fines, almost all of it is going to be fines. It's going to be very good quality fines. That will be another premium product entering the market. But frankly, there will be demand for better quality ore given the need to decarbonize, and these blast furnaces are all going to need to decarbonize. So I think that decarbonization trend is going to underpin quality premia. And therefore, the emergence of Simandou in the market, I don't see as a direct threat. It complements the offering of better quality ores.

Thanks, Timo. And now we have a question from Bheki Mthethwa from Bateleur Capital. How much finished stock should we expect will be drawn down in 2026? And what are the key considerations that we should keep in mind?

Yes. So, Bheki, in the second half of 2026, we'll do the major tie-in, which essentially says: We've taken a modular approach in terms of the projects. I spoke about the number of coarse modules that will convert, so 6 out of the 8 and the number of fines modules that will convert, 5 out of the 7.

But in the second half, we'll do all the major tie-in work that connects all the infrastructure around that circuit, connection to the crushers, both primary crushers, quaternary crushers, which are just after the UHDMS and change the around to allow us to actually start getting the benefit of better products because we'll start getting that post the tie-in. So that will happen in the second half.

And what we essentially have guided is the fact that our 2026 production will drop simply because we'll stop the DMS circuit. But as I said, during the time, we will continue running the jig plant at Sishen and clearly Kolomela will be running and will then supplement additional volumes from a sales perspective from stock. So the current stock levels of around 7.4 million tonnes, I expect that to remain roughly in the range. Slight ups and downs, I'm not too concerned about it, but that's good because clearly, we'll sell down on that stock in the second half.

And I then expect us post the DMS shut to go back to normal levels of stock that we'd like to keep, which is in the range of around 3.5 million to 4.5 million tonnes, post the shut. And then just one last thing. The split from a stock perspective. You saw me smiling when I spoke about the increased levels of stock at the port, so clearly, it's not just about the overall stock volumes, I definitely would like to see us continuing with higher levels of stock at the port.

Thanks, Mpumi. We have another question from Nkateko and Myles Allsop, both on premium for Timo. Timo, she's -- we want to -- which is just actually -- Nkateko is asking about the marketing premium difference in Q1 versus Q2. It seem that marketing premium was negative in Q2 in addition to the negative timing effects. And Myles is looking at an indication of what marketing and lump premium will look like going forward?

All right. No, these are tough questions. I don't think there is that much of a difference in our sales split Q1, Q2, China versus ex China. So I'm also looking at Ebrahim. If you know more, please say so, I think it's pretty much the same. So I would expect that there hasn't been too much of a divergence between the 2 quarters.

Lump premium going forward, I think was your second question, pretty much in line with what we're seeing now. The lump premium has recently been supported by the much lower coking coal prices. That's been a positive. Lump stocks in Chinese ports have also come down quite significantly in the first half, and that's also been a factor that's supporting the lump premium. So we would expect the lump premium to pretty much continue at the level that we see now for the second half of the year. So we're now at $0.18. I think if you have to pick a number, that's a good number to take for the second half.

Thanks, Timo. A couple of questions for Bothwell. The first one is from Mpumelelo Mthembu from Absa Capital. Lelo has asked what did labor and maintenance increase at Sishen compared to H1 2024? His second question is, why is the timing difference or effects that's higher, whereby breakeven price timing effect is negative 6 and FOB realized is negative 2? The next question is on the CapEx side. So perhaps I'll pause there and really deal with the income statement questions first.

Just pause there. What are we talking about labor, the first question?

Labor and maintenance costs.

Labor and maintenance costs. Yes, so our staff costs have remained fairly stable from -- if you compare versus H1, especially at Sishen. And overall, there's only been a percentage change in labor costs, so fairly flat.

From a maintenance perspective, slightly higher. So repairs and maintenance is about 6% higher than last year. And we always talk about the importance of maintenance and making sure that we keep up with maintenance. So that's in line with our expectations there. The question on the breakeven, I didn't quite understand what he was comparing.

I think it's from looking at the slides where we show the timing effect in the breakeven price. And then we also spoke about the timing effect on the product and clients customer strategy slide.

Okay. Okay. I think I understand the question. So these are 2 different views. When we talk about timing effects versus the index price, what we are comparing is the index price versus what we realized as a price. So that will be the difference there or the timing effect.

On the breakeven price, we're comparing last year's breakeven with this year's breakeven. So what you will see there is the difference in timing effects. So the timing effects that we saw this time last year against the timing effects that we are seeing. So the 2 numbers are not the same.

The other question, actually, we -- it's regarding CapEx from Myles Allsop, but it is asking -- he is asking about CapEx expected in 2026 and 2027, which we normally just guide for this current year. So -- yes.

Yes. So yes, we do guide for the current year. But if you do look on our CapEx slide, we did talk about in the medium term, what do we expect. We've guided to the profile of the UHDMS project because that's clear. And we've also guided to what we expect from an SIB perspective in the medium term. So that's on the CapEx slide.

Okay. Thanks, Bothwell. And then we have another question from Nkateko with regards to the solar. She has mentioned, if there would be any anticipated impact on operating costs from the solar and wind program, which will reduce emissions significantly?

Thanks, Timo. So I guess the short answer is yes. There is a clear benefit in the solar in addition to the carbon reduction. It is a lot cheaper. And because of that, we do get a significant reduction in our electricity bill at site. And this is specifically for Sishen from a solar PV perspective. Thanks, Penny.

Thank you. I've got one question here from Myles as well on the public-private partnership or we actually call them PSPs, where could volumes normalize from 2028 onwards, assuming the PSP is concluded? And should we expect volumes to get back to between 40 million and 45 million tonnes?

Yes. No, thanks, Myles. So overall, Myles, I mean, we've spoken about the fact that we are excited about the fact that at least volumes have stabilized in the short term. And clearly, maintenance work needs to be conducted to catch up on that maintenance.

In the longer term, the reason why we are working in partnership with Transnet and why we've always advocated for PSPs is because we do believe that, that line in terms of the ore export channel can actually go back to most probably closer to historical levels. It's about catching up on the maintenance, clearly, in a phased manner because otherwise, you'd have to stop the entire infrastructure for an extended period of time, which would essentially not work.

So that's what we're fighting for, Myles, yes. And that's why, to be fair, these partnerships are critical to us. It's simply because clearly, an improvement in the overall line will not just impact Kumba, but it will actually impact the country as a whole. We've always spoken about the impact that the logistics challenges are posing to the country as a whole, whether you're talking about this line or frankly, the coal line, the chrome line, the manganese players and the rest of the country. So that's why PSPs, you've called them PPPs, but that's why we actually are excited about them. Thanks.

Thank you. We have no further questions on the webcast. We'll now close the presentation. Thank you very much for joining us today, and wish you the rest of -- a good day for the rest of the day and look forward to further engagements this afternoon. Thank you.