Thank you for standing by, and welcome to the Nickel Industries Limited 2022 half year results call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Justin Werner, Managing Director. Please go ahead. Thank you, welcome everyone to the first half results call for Nickel Industries. If I could just ask the webcast operator to move the presentation to page two. I'm sorry, the next slide. Thank you. It was a record half operationally and financially. Pleased to report gross profit $161 million, operating profit $140 million, profit after tax of $118.4 million. Really a continuation from last year. Continued strong conversion of EBITDA to free cash flow, and that's really because we pay no tax currently, and we have very little sustaining CapEx. In terms of the tax breaks that we've received during the half, both Angel Nickel and Oracle Nickel received tax holidays 10 years in duration, with a further two years post the 10 years at 50% of the Indonesian tax rate, which will be about 11% or 12%. Also pleased to declare another AUD 0.02 per share interim dividend, which is maintaining the dividend from last year. It was a record half in terms of production, 26,733 as we just caught Angel Nickel commissioning in the Q2 of this year. Nickel Industries attributable production was 21,386 tons. RKEF sales revenue $511 million, EBITDA $158.6 million. We'll look at how that compares with last year, but certainly a significant increase. Also a very strong EBITDA margin at $6,122 a ton, so significantly higher than last year. The Hengjaya Mine is really starting to become a material contributor to the Nickel Industries' cash flow. Mine production of more than 2.3 million wet metric tons. EBITDA of $27.6 million for the half. We have recommenced in April selling our limonite ore to the recently commissioned HPAL plants next door. We're also seeing the benefits of the cash flow contribution from the sales of that limonite ore. That will allow us also to monetize a portion of the ore body that was traditionally just treated as waste or overburden. We're also working on a haul road to connect the HN mine with the IMIP. Once that haul road is completed, we expect that around sort of Q2 of next year, we will start to see significant ramp up again in the Hengjaya mine and the associated significant contribution in terms of cash flow. On a corporate basis, we completed the $212 million capital raise. Successfully commissioned and ramped up ANI again ahead of schedule. We've acquired an initial 30% interest in Oracle Nickel, which is under construction and scheduled for commissioning in October of this year. We finalized a definitive agreement for acquisition of the Siduarsi Nickel-Cobalt Project, and drilling is currently ongoing there. We were pleased to release our maiden sustainability report, and we signed two MOUs for two solar projects, and we've recently converted one of those into a binding term sheet. The total of that solar capacity is about 440 megawatt peak, and that's part of our decarbonization plan. We changed the name to Nickel Industries, which is more reflective of the nature of the business. If we could just move to the next slide, please. Just to summarize the first half, as I said, strong, consistent RKEF production from both HNI and RNI, and we started to just initially see some results from ANI. You can see significant improvement from first half of 2021 to first half of 2022. Revenue up 78%, profit up 73%, operating profit up 58%. That's really a result of increased margins. Those margins, I should point out, have been achieved despite cost inflation, you know, elevated coal prices. You know, it really is a very strong result. As I said, we've had material profit contribution from the Hengjaya Mine and happy to maintain the AUD 0.02 dividend. If we just move to the next slide, please. In terms of the balance sheet, still very conservatively structured, you know, with significant flexibility for the future and for future growth opportunities, as they arise. Total debt stands at about $500 million, comprising $325 million of senior unsecured notes with an April 2024 maturity. We just recently announced a $225 million debt package of senior secured notes with an August 2025 maturity. There's a lot of runway in terms of when that debt has to be paid down. As I mentioned, we're still very conservatively geared, which leaves us the opportunity to capitalize on future growth opportunities as they arise. If we could just move to the next slide, please. In terms of the RKEF operations, again, a record half-year result. We're able to increase total nickel production or nickel tons by 32.3%. We started to see Angel Nickel, which came online in April, starting to contribute to our nickel tons. Pleasingly, as I said, if you look at the bottom line, RKEF EBITDA margin per ton has increased to $6,122 in the first half of this year versus $5,022 the same time last year. A 21% increase in the face of rising inflation, rising costs. We think that's a tremendous result. If we could just move to the next slide, please. In terms of the RKEF operating performance, you can see there in the light blue the contribution from Angel Nickel, particularly in the Q2 of this year. Pleased to report that Angel Nickel is now fully ramped up and is operating in excess of nameplate capacity. You know, we expect to achieve the 130% capacity that we've been achieving from both HNI and RNI. If you could just move to the next slide, please. I mentioned the record EBITDA per ton margins, and that's been also assisted by an increase in the nickel tons that we've sold. We did see a significant increase in realized contract prices. As I said, happy to report that we were also able to capture an increased margin on top of those increased realized prices. If you could just move to the next slide, please. You can see the NPI pricing here over the course of the year. That has allowed us to obviously achieve the record EBITDA per ton margins that we've been able to report. It has come down recently, and that's really off the back of, you know, what's taken place in Ukraine, as well as, you know, some a slowdown in stainless consumption in China, which is mostly being driven by their zero COVID policy. We expect that policy won't continue for too much longer with, you know, with upcoming re-election. You know, while we are in a period where NPI prices have declined, you know, our margin remains quite robust. If we could just move to the next slide, please. I mentioned the Hengjaya Mine. It's been a record half year. Production of over 2.3 million wet metric tons, which consisted of 1.6 million wet metric tons of saprolite and 784,000 wet metric tons of limonite. EBITDA of $27.6 million. That's a 140% increase from the same time last year. Given the strengthening LME nickel price and the linkage of ore to the LME, we are seeing higher realized ore prices currently. We're also reaping the benefits of the sale of our limonite ore and the margins that we're making from the sale of that limonite ore. As I mentioned earlier in the call, haul road is under construction, and the plan is to, once that haul road is operating, ramp up the Hengjaya Mine to well in excess of somewhere between sort of 8-10 million tons per annum. It will be a material contributor in terms of the cash flow to the business. If we could just move to the next slide, please. On a corporate basis, we completed an equity capital raising. There was two components to that. Institutional placement, we raised $106 million, and that was very well supported. Then we completed a placement to Shanghai Decent for the same amount, $506 million, which followed FIRB approval and has moved then to 21%. We're obviously very happy to see Shanghai Decent take a considerable amount of the consideration as Nickel Industries shares. We think it's a strong endorsement of the company and their belief in Nickel Industries. We announced the successful commissioning and ramp up of ANI well ahead of schedule, and we saw a small part of the contribution of Angel Nickel in our half-year results, about 7,466 tons. As I mentioned, that's now operating in excess of nameplate capacity at around 130%. We expect to see that operating at well in excess of sort of 40,000 tons per annum on an annual basis. We also just recently commissioned the power plant, and so we expect to see an improvement in the cost structure for ANI moving forward. The ownership interest in Oracle Nickel, which is under construction and due for commissioning in October of this year. Funds from the placement to institutional shareholders and also to Shanghai Decent were put towards acquiring an initial 30% interest in Oracle Nickel. With the debt package that we've just recently completed, that will allow us to fund the move to a 70% ownership. As I said, we expect first NPI production in October of this year, so that's also been expedited. Once we have all 12 lines in operation, that will take our nickel production to in excess of 130,000 tons per annum on a 100% basis. That firmly cements us in amongst the top 10 global nickel producers. We've been able to achieve that over a very short period of time. Our nickel matte strategy, we completed the modifications that will allow us to be able to produce nickel matte. The CapEx was very low for that, you know, sort of a little over $1 million for both lines. We're currently monitoring the market and if we see an opportunity where we think that nickel matte may realize a better margin or we think that, you know, timing wise in terms of demand, nickel matte switching just two of our lines out of 12 makes sense, then we will make that decision and that will provide diversification for the company. It will give us exposure to not just the NPI or class two NPI market. It will give us direct exposure to class one nickel and to the current LME pricing. I mentioned the acquisition of the Siduarsi Nickel-Cobalt Project. It's a Contract of Work. There are only three other nickel Contracts of Work in Indonesia, previously explored by Freeport-McMoRan and others who were there because of the attractive cobalt values. We're currently drilling that with a view to, you know, discovering what we think could be a world-class limonite deposit. It sits on the other side of Papua New Guinea and the Indonesian side. On the other side, you have Ramu, which is the world's lowest cost HPAL project. We think that Siduarsi is certainly demonstrating that it's the ore body would be consistent with what currently exists at Ramu. Following shareholder approval, we changed the company's name to Nickel Industries from Nickel Mines. As I said, we think it's more reflective of business and our operations going forwards as we continue to go downstream and diversify in the nickel industry. With that's the final slide. I'll then turn over to any questions. Thank you. Thank you. If you wish to ask a question, please press star then one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star and then two. If you are on a speakerphone, please pick up your handset before you ask your question. The first question today comes from Adam Baker at Macquarie. Please go ahead. Hey, guys. Yeah, quite a big jump in receivables and inventory on the balance sheet during the last six months. Just wondering if you could make a comment. Are these expected to unwind during the second half? Hi, Adam, it's Chris here. Look, the receivables have increased. One of the big drivers of that is obviously Angel coming online. Over double the size of the production, you clearly are gonna have receivables increase. I want to note to everyone that all of our receivables are within the payment terms and the contracted payment terms. They have been throughout the course of the year, and they continue to be. Will it unwind? No, you'd actually expect the receivables to stay relatively high given that Angel is now online versus comparing it for. We've now got eight lines operating versus four lines last year. I think everyone just needs to be cognizant of that. Sure. On the inventory, are you expecting those to remain a little bit higher with Angel online as well? Is that much the same story, or are you- Yeah. Yeah. Yeah. No, no. In inventory will obviously be when you move from four lines to eight lines, inventory will obviously increase. That's going to continue, and it's a hallmark of our business. As everyone knows, we maintain inventory in centralized stockpiles at all of the RKEF lines and will continue to do so. Sure. Great. The $100 million in contributions by the non-controlling interest in the cash flows, is that some sort of pre-made payment from Shanghai Decent prior to the capital raise? I'm just struggling to understand what that is. Sorry, you just cut out then, Adam. The $100 million of contributions by non-controlling interest in the cash flows, just wondering if that's, you know, some sort of prepayment from Shanghai Decent prior to the capital raise, or what is that number? That's part of the Oracle, our Oracle construction payments. The Oracle construction, as Oracle's coming online. Shanghai Decent is funding into that, and we've made our payments for that. Sure. Okay. Um- Sorry, Chris. Richard Edwards here, if I can just step in. Those contributions rather are for the Angel Nickel construction. Sorry. Did I say Oracle? Yeah. Sorry. Angel. Yeah. Sorry. That's all right. Yeah. So once we went to 80% at 30 September, all expenditures for the Angel project are going through our accounts, but Decent had to contribute or are solely funding the construction. Those monies are put in by Decent and then spent by our Indonesian operating entity, PT Angel Nickel Industry. So it comes through the group accounts. Sorry. Sorry, Adam. I thought I said Angel, not Oracle. That's okay. Just wondering if you can make a comment on, you know, media speculation that Tsingshan's looking at selling some assets in Indonesia? Yeah, I think I'll throw that one back to Jos. Yeah. Thanks, Chris. Yeah, no, they are looking to sell down some of their stainless capacity, about 1 million tons of their 4 million tons to Baowu, which is a state-owned company. Baowu is looking to increase its stainless steel capacity and also its footprint in Indonesia. It currently has a joint venture with Vale developing eight RKEF lines to the north of IMIP. Partly the reason for the Tsingshan sell down, it should be noted, I mean, this is a small part of the industrial park. You know, it's sort of eight RKEF lines and 1 million of $4 million tons of stainless capacity. You know, there's currently 75 operating RKEF lines in which Tsingshan holds a majority across most. The reason for it is they are looking to diversify their business. They are looking to get more involved in the battery metals space. They do have a battery metals business in China, which they're listing on the Hong Kong Exchanges and Clearing. They've recently announced a deal with Eramet to develop a lithium project in South America. We believe they have quite ambitious plans for HPAL and MHP and production within Indonesia. Look, we see it purely, as I said, as diversification. We see Baowu coming in to the industrial park as a positive. There's a number of partners throughout the industrial park. This isn't unusual for Tsingshan to be selling equity interests in its operations as they've done to Nickel Mines, as they've done to a number of other partners. Sure. Thanks. I'll pass it on. Thanks, Adam. Thank you. Your next question comes from Patrick Collier at Credit Suisse. Please go ahead. Patrick, sorry, your line is live. You may be on mute. We will proceed to the next questioner, which is Mitch Ryan at Jefferies. Please go ahead. Thank you for taking our questions this morning, team. Firstly, with regards to the nickel matte and the conversion of those lines, obviously, can you just clarify? My understanding is the infrastructure is all in place. It's literally a matter of you almost flicking a button and changing between the two. Is that understanding correct? Secondly, how long does it take to see a nickel matte coming out of those lines? Hi, Mitch. Yeah, no, that understanding is correct. The CapEx has been spent and modifications have been made. It is just a matter of making that decision. In terms of the timing, once the decision is made, it takes about two weeks to move to a salable nickel matte product. In the interim, we produce an off-spec product, which is still salable, but not on spec. There's no disruption to production. It's about two weeks from sort of making the decision to producing salable on-spec nickel matte. Great. Thank you. Thanks for the clarification. My second question relates to the Indonesian government's been quoted in the press recently that they're looking to, I guess, looking to release a tax policy to incentivize domestic production of, I guess, more of a battery materials chain and higher spec nickel products. Do you have any commentary that you can provide on that or any views on where that may be going? Yeah, look, that's correct. I believe that the government will implement it. What's driving that decision, and it makes a lot of sense, is that obviously we've seen tremendous growth in nickel pig iron and even stainless in Indonesia. Indonesia is now the world's second largest stainless steel producer, thanks to Tsingshan. With that, the ore that feeds all of these RKEF lines is saprolite. It's a higher grade ore. To access that saprolite requires removal of lower grade limonite ore. In the process of removing that limonite ore, it's actually sterilized. We've now seen with the successful commissioning and ramp up of the Huayou or HNC HPAL project, which we were just visiting on the weekend. World's fastest construction time, fastest ramp up, largest HPAL plant operating globally, currently making very good profits. The Indonesian government is keen to obviously see more development in that, you know, nickel space that is applicable to the EV battery market. Also really the key driver behind that decision is that, as I said, there's hundreds of millions of tons of limonite that's currently being sterilized, which could be processed through HPAL plants. So the government's just simply looking to incentivize people to look at HPAL opportunities rather than NPI opportunities. The other comment I would make is there's obviously a lot of NPI production that now comes out of Indonesia. The government recognizes and doesn't want there to be an oversupply of NPI. I think it's comfortable with what's been built and the next focus is, as I said, really gonna be on nickel for that class one EV battery space. Great. Thanks very much for your comments. Thanks, Mitch. Thank you. Your next question comes from Patrick Collier at Credit Suisse. Please go ahead. Hi, guys. Sorry about the audio issues before. Can you hear me now? Yes. Thanks, Pat. Awesome. Thanks. Just firstly, following up on Adam's working capital question, just with Oracle then, you know, next in the pipeline, wondering what you're thinking for working capital as that comes online, but then also presumably there's some unwind, you know, just given NPI as well as input prices seem to have decreased, just how those two factors are likely to offset each other. Any view on that? Chris, do you want me to take it up? Yeah. I'll show Chris for that. Thanks, Chris. Thanks for the question, Patrick. Exactly, as you've said, with Oracle coming online, there will obviously be a working capital build up there for Oracle, exactly the same as Angel. In terms of the pricing and/or the value of that working capital, it's obviously dependent on the prices or the current market prices of the nickel ore and the coal at the time we build it up. That's not something as you are aware, that's not something that we can predict with any great accuracy, particularly the coal. Sure. That makes sense. Just on stockpiles, you mentioned the centralized stockpiles, you know, in the context of working capital. But. Yeah. Just to be clear, is there internal stockpiles that sit in your company's accounts versus stockpiles? We have stockpiles at HNI and RNI. We get an allocation of the stockpiles for Angel and Oracle as well. Okay. Those allocations come through. Yes. which was Yes. Okay. Thanks. Justin, just following up, you mentioned, you know, robust margins and obviously seen some decline in NPI prices, but just curious if you're able to elaborate on, you know, perhaps where you see margins heading in the quarter, just given we're two-thirds of the way through the quarter now. Just any comments on that would be appreciated. Yeah. No, we obviously had record EBITDA margins last quarter. As you pointed out, we have seen a contraction in NPI pricing, which will lead to a margin contraction for this quarter. That's being sort of offset by the ramp up of Angel Nickel, which as I mentioned is sort of moving forward from basically this month is about 130% of the nameplate capacity. Yeah, we are seeing margin contraction this quarter, but being offset by increased production from Angel Nickel. Okay, thanks. Should we assume lower unit costs as well coming through? Unit costs are starting to decrease slightly, but not at the pace that we're seeing in terms of the decrease in NPI costs. Interestingly, you know, we're seeing a lag from those costs coming through. You know, that allowed us to capture a very high margin last quarter and the quarter before that. You know, there is a bit of a lag that's coming through, but those costs are also decreasing just not at the same pace. Okay. That's really helpful. Thanks very much. I'll pass it on. No problem. Thank you. Once again, if you do wish to ask a question, please press star then one on your telephones to register. Our next question comes from David Coates at Bell Potter Securities. Please go ahead. Thanks very much. Good morning, Justin, Chris, and Richard. Thank you, and thanks for answering the question. Just following up on a couple of questions you guys have asked already, especially just on the nickel matte. You've gone through the costs and sort of the ramp up. Should we be expecting to see some nickel matte production this calendar year? That's my first question. Yeah, David. I think we certainly are monitoring pricing, we're monitoring margins. I think we most likely will look to produce some nickel matte certainly before the end of the year. Just in terms of, I guess sort of, you know, how that impacts your revenues, would the best way to kind of for us consider that to be just, sort of, a higher payability rate, of your sort of nickel production, I suppose? The reason to move into nickel matte, yeah, would be partly driven by you know what the margin difference is or what we think it may be between nickel pig iron and nickel matte. Also just to provide some diversification and start to establish ourselves in that class one market. You know, we've had a number of inbound inquiries from various end users. I think as everyone knows, you know, our nickel pig iron is consumed by Tsingshan. Nickel matte is sold to third parties and there's a robust amount of demand for that nickel matte. You know, it's partly driven by the margin decision and also by diversification and potentially looking at new buyers or to take that nickel matte. Based on your understanding of what the Indonesian government sort of nickel products sort of export tax might look like, would the nickel matte be captured by that? Not clear at this point. It may, but I should point out, I mean, it's. I think we're looking at NPI potentially around 5%. The government has indicated that that will also be a sliding scale dependent on, you know, NPI pricing or LME pricing, as well as costs. Yeah, we were still yet to receive clarity on it. You know, in the context of, you know, we have a 10-year tax holiday, it's a small amount and, I mean, I think if you look at what's happening even in Australia, you know, the Queensland government imposing 40% royalties on coal, it's going to be very modest. Yeah. No, no, indeed. Yep. Sorry. Really it's, as I said, it's to, you know, really encourage the battery nickel class one development. We've seen rapid, obviously, development of stainless steel and NPI. The government would now like to see a similar sort of trajectory for those battery metals. We obviously had Tesla signing MOUs with Tsingshan and a number of automakers, you know, VW, Ford, to name a couple. Battery makers such as LG and BASF breaking ground on battery plants in Indonesia. That's really where I think the next wave of growth government is looking to will come from. Yeah. Excellent. Just finally, you discussed the you know, likely margin contraction we'll see this quarter, partly offset by some cost savings. Can you just remind us the sort of percentages or you know, in power cost savings that you're likely to see with the full ramp up of the new power plant? Yeah. We expect to see about a 20% saving on our power costs from Angel Nickel. We should see a small impact from that this quarter. We won't get the full quarter benefit of that power plant ramping up, but we should start to see it this quarter. Yeah. Probably full whack in the December quarter, though. Yes. We should see an impact and of it this quarter. Okay. Excellent. Thanks, Justin. Cheers, and congratulations on the result. No, Dave. Thanks, Dave. Thank you. Once again, if you do wish to ask a question, please register by pressing star then one on your telephone and wait for your name to be announced. We'll pause briefly to allow any final questioners to register. We are showing no further questions at this time. I'd like to hand back to Justin Werner for closing remarks. Thank you, everyone, for your attendance today. As I said, record half year result, both operationally and financially. We look forward to the second half of this year to continued strong operational results, with the ramp up of Angel Nickel and with Oracle Nickel coming online. That increased production will obviously lead to, you know, further strong financial results. Thank you everyone for your time. Appreciate the questions, and thank you. Thank you. That does conclude our conference for today. Thank you all for participating. You may now disconnect.