Thank you for standing by, and welcome to the South32 Half Year HY 2024 Financial Results and Outlook Investor and Analyst Call Australia. All participants are in 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. Graham Kerr, Chief Executive Officer. Please go ahead. Thank you. Good morning, good afternoon, everyone, and thanks for joining us today. On the call with me is our Chief Financial Officer, Sandy Sibenaler, Chief Operating Officers Jason Economidis and Noel Pillay, and our President of the Hermosa Project, Pat Risner. I'll give a short summary before handing back to the operator for questions. I'd like to begin with our most important commitment, that our people go home safe and well every day. We continue to embed our safety guarantee across our business to enhance our safety culture and fundamentally shift our safety performance. Quite simply, nothing is more important. Today, we've announced a major milestone for our business, the final investment approval to develop the Taylor zinc-lead-silver deposit, the phase I of our regional-scale Hermosa Project in Arizona. Since the merger, we have worked to improve and reshape our portfolio for a low-carbon future. We divested South African Energy Coal, exited Manganese Alloys, invested to grow our production of low-carbon aluminum, added copper through the acquisition of Sierra Gorda, and embedded high-quality options to compete for capital. Executing the development of Taylor is an important next step in our strategy that will further improve our portfolio by increasing our production of critical metals needed for the global energy transition. We expect Taylor will lift group margins due to its first quartile cost position and establish significant shared infrastructure that will unlock value for future growth phases at Hermosa. These include Clark, our battery-grade manganese development option, and exploration prospects in our highly prospective land package, which has already returned high-grade copper and zinc results. The combination of Taylor, Clark, and the regional land package gives us a platform at Hermosa to produce critical commodities from multiple different deposits for decades to come. The Taylor feasibility study confirms its potential as one of the world's largest, lowest-cost producers of zinc, a critical commodity for the global energy transition that we expect will deliver value for our shareholders for decades to come. We expect strong demand, market fundamentals for zinc, with global demand growth expected to outpace production by approximately 3 million tons by 2031, an industry challenge of similar magnitude to copper. We expect higher incentive prices for zinc as Taylor ramps up to nameplate capacity for FY30. Taylor has been designed to minimize environmental impact. We have applied next-generation mine design principles using automation and technology to drive efficiencies and lower operational greenhouse gas emissions, in line with our goal of net zero greenhouse gas emissions by 2050. The feasibility study confirmed Taylor's position as a large-scale, highly efficient underground mine with conventional processing in the first quartile of the industry's cost curve. The initial operating life has been extended from 22 years to 28 years through additional drilling and geological modeling, with the first-tier Ore Reserve underpinning the first 19 years of the operating life. We expect to invest $2.16 billion in direct and indirect capital expenditure to deliver first production in the second half of FY 2027, establishing a modern, long-life operation. Hermosa will benefit from being the first mining project added to the U.S. government's FAST-41 permitting process, which is expected to deliver an efficient and transparent process of federal permitting for Taylor and Clark. The construction of Taylor is expected to be funded primarily by the group's operating cash flow. Any required external funding will be consistent with our commitment to a strong balance sheet and investment-grade credit rating. Turning now to our half-year financial results. Macroeconomic conditions created headwinds for our commodities during the half. We delivered group underlying EBITDA of $708 million at an operating margin of 19%. Operational highlights included record half-year aluminum output and sequentially higher zinc and nickel production in the December quarter. We continued our rigorous focus on cost during the period and completed a group-wide review that has supported operating cost efficiencies and reduced expenditure. This focus supported FY 2024 operating unit cost guidance being lowered or held unchanged across the majority of our operations, and a 6% reduction in FY 2024 operational capital expenditure guidance. We remain focused on driving operational performance and cost efficiencies across our business. We continue to prioritize a strong balance sheet and investment-grade credit rating through all price cycles. As part of this focus, and to maintain our balance sheet position, we have taken the decision to cancel our on-market buyback, which is due to expire on the 1st of March 2024. Consistent with our unchanged capital management framework and in the context of our financial position, we will continue to assess opportunities to return excess cash to shareholders in the most efficient and value-accretive manner. Despite experiencing some challenges during the period, we are expecting a strong second half. We are well-positioned to capture higher margins off the back of our expected 7% production uplift and ongoing focus on cost management, coupled with strengthened market conditions for key commodities to start the calendar year. We continue to invest to unlock value from our high-quality operations and growth options in commodities, critical for a low-carbon future.... In closing, I'd like to thank our teams across the world for their hard work and commitment. Looking ahead, we are committed to safely delivering improved operational performance and cost efficiency across our business, and we are unlocking value in our high-quality operations and growth options to further improve our portfolio and strengthen our exposure to the increasing commodity demand required for the global energy transition. Thank you, and I will now hand back to the operator for questions. Thank you. If you are listening online and have a question to ask, please call in on 1-800-809-971. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Paul Young with Goldman Sachs. Please go ahead. Yeah, thanks. Morning, Graham and Sandy and team. Hope you're all well. Graham, first question's on Hermosa, and the FID, and just to call out the IRR, which is quite modest, the 12%. I know that that's also looking at cash flows really from the first of January this year. I know that you had, you know, a huge amount of exploration upside there, across Peak and Clark, et cetera, as you outlined. So I'm just curious around when you took this project to the board, how you actually valued or, you know, put a value on those future options when you presented that to the board? Yeah. So, look, Paul, I think that's a really good question. I mean, if you sort of think about what do you want to have if you have a mining project, what you're really looking for is a couple of items. One, you're looking for something that's a long life basin, basin, i.e., handles the decades of price waves. Two, it has a low position on the cost curve. And three, it has multiple options to grow the basin. Now, if I think back over my 30 years experience in the industry, you're talking about, and they're all huge, the great assets such as Iron Ore, Escondida, Cannington, that have had this. The reality is, when you look at those operations at the time of the first decision, because of the length of the resource and the length at which you're gonna develop it, the IRR and the NPV don't necessarily really capture that value. So that is the point we talked about, you know, very strongly at the board. Classic example for me, you know, NPV [inaudible] $59 million. Original resource we expected to mine was 29 million tons. And, you know, now we're looking at in excess of 90 million tons. If you think about what we have when we talk about the Hermosa play, you know, we think zinc obviously is an attractive market. We do have a long life operation. We've seen, if you like, the metal grow from the pre-feasibility to the feasibility study by about 31%. I still believe the mine life of 28 years was still open at depth and laterally, so I'd be surprised if there's not another decade, roughly, on that, and it's very hard to obviously value that. When we are up and running, you know, Taylor is in the lowest cost position or lowest quartile on the cost curve, so I think that positions you well. You know, on a steady state, you're probably looking at producing an EBITDA of $400 million and post-tax free cash flows about $320 million for decades to come. I think to your point, what it does do, it does unlock the potential we have. So it's not only the potential on adding mine life to Taylor itself. You know, you'll see in the release, and we have been sharing as we've had more work done on the exploration side around Peak, where we do believe there is potential that Peak actually joins up at the bottom of Taylor's Deep, where we do actually see in the bottom of Taylor's Deep some high copper grades. So we believe that could be continuous, and that's one of the pieces we're working through now. We've just started working on another deposit called Flux, which is about 5 kilometers from Taylor. That's a much shallower resource, and we've announced today the first couple of holes there. If you think about this in the scheme of things, when we talk about the capital we're investing, and if we look at the total capital spent since the pre-feasibility, you know, probably about 26% of that is around shared infrastructure that all those options will actually use. So things like the roads, it's the power, it's the dewatering. So I think while this is definitely the first stage of development, Paul, I expect to see there'll be multiple projects over decades that really fill out this basin. Okay. Thanks, Graham. And then second question is on the decision to cancel the buyback. I think it's the second time you've done it. You did it during COVID, which was obviously very different. And I'd just point out that, you know, from a business perspective, it was a pretty tough half, of course. I think it was the first time you were free cash flow negative since you demerged from BHP, when you exclude acquisitions. So, but the June half is looking better from a production perspective, working cap unwind. I know CapEx is stepping up, but what do you need to see to reinstate the buyback, considering that I know you said that you'll return cash to shareholders based on what's the most value accretive? I would have thought buying back stocks is still very accretive, so very, very accretive, I should say, at current levels. So, are you really waiting for net debt to come down to a certain level? Are you waiting for operational improvement? I'm just trying to see how you're thinking about that buyback. Yeah, look, I think that's a really good question. I'll get Sandy to fill in a bit of the detail. If I take a step back to your point, it was a hard first half for us, particularly around the timing of working capital. You know, three delayed shipments out of Hillside really hurt us when you think about the value of that. Obviously, commodity prices weren't as favorable as they're looking in the first half of this year. This half, we've got, you know, 7% production growth coming through in the half, stronger commodity prices in things like aluminum, coal, and we'd expect some of that to unwind. I think when it comes to capital management, what I would say is our principles have not changed when we think about our framework. First and foremost, safe and reliable operations and investment-grade credit rating, and Sandy can talk to you about what that means. Then we always pay, you know, at least 40% of our underlying earnings out as a dividend. So as our returns increase, so do shareholder returns, and then what we have left is excess cash that competes. Over the last 12 months, we've probably seen commodity prices come off, some shortage in terms of our production delivery, and an increase, if you like, in capital at Hermosa versus what we would have spoken about 12 months ago. All that has meant when you look at forecast cash flows based on today's numbers, you don't have the same free cash flow coming through. What we're always gonna do is protect, if you like, the balance sheet of the organization, never compromising the safe and reliable piece, but protect the strength of the balance sheet of the organization. We do believe that, you know, capital management, how we actually do the buyback continuous, works best when it's consistent. But to your point, we suspended during COVID versus uncertainty. At the moment, we're not generating that excess cash flow. I think when we start generating excess cash flow and actually have that money in the bank, you should expect us to basically, you know, go back to what we've done in the past, put everything through the framework. Maybe this will sort of help, you know, with the changing portfolio, with things in and out, so Sierra Gorda, South African Energy Coal out, you know, maybe we, Sandy can talk a bit about what we think about investment-grade credit rating. Yeah, sure. Thanks, Graham. So, thanks for the question as well, Paul. And look, we absolutely, to Graham's point, our, our capital management framework and commitment to investment grade credit rating through the cycle are unchanged. And as we've already touched on, we'll fund Taylor with operating cash flows over the project period and then assess other funding options as required. Specifically to the kind of metrics we look at, they're the fairly standard metrics as contemplated by Moody's and S&P, who, who provide our ratings. So the kind of cash flow to net debt type considerations, and we continue to monitor, monitor those and have obviously completed a comprehensive funding assessment for the project. To Graham's point, I think the key, the key element for us is that we've always said, and we'll continue to say, we will return cash when we have it. Given the weaker margins and the growth in our net debt position, we thought it was prudent to pause the buyback and have obviously taken the decision to cancel it. And just align with Graham's point, I think we've reinstated at a time we had the appropriate cash flows to justify it. I mean, our debt, as you know, Paul, there's a large chunk that's made up of the actual multi-currency lease down at Worsley, and then obviously you've got the bond market. Look, we have historically talked about somewhere between $0 million-$500 million as our ideal position. I think you know now, with the change in the portfolio, with the addition of Sierra Gorda and other things, that number now is probably closer to Sandy? Yeah, we'd look at something more like the mid-$1 billion, is where we think we've got a kind of grace against our expectations, and that's what we'll be really working towards throughout the building investment phase. Okay, thank you. So we're pretty much there, need to see free cash flow come through. That's all clear. Okay, thank you. Yeah. I think the last point I'd make, Paul, to your point, we do think our stock is cheap at the moment, so obviously, if we have that excess cash, it would be an attractive return. Absolutely. Very clear. Thank you. Your next question comes from Rahul Anand with Morgan Stanley. Please go ahead. Oh, hi, team. Good morning. Thanks for the call. A couple from me, perhaps, starting with the FID and FS today. Look, you know, you've highlighted obviously a bit of a drop in the grades through your production profile and obviously an extension of that mine life. What I wanted to understand was, has the work that you've done at the asset, you know, during this period, progressing it to FID, informed you better, somewhat, in terms of Clark? How does that sequence in, and is that gonna be more of a customer-led discussion once you see that market develop in size, is when you start focusing on it a bit more? Or is that front of mind for you as you develop Taylor? That's the first one. Yeah. So look, what I would say is, if you look at the grades, you are right between the two, you see a slight drop off, but overall, there's 31%, roughly, more metal recovery in the actual feasibility study versus the pre-feasibility study. And as I outlined earlier, we've still got opportunities with Taylor being open in multiple directions at depth, as well as what's going on with Flux and Peak. So I, I think that'll continue to grow. The other one is obviously as we get more into basically the ore body, you know, we are continuing to see more delineation of some of the work that's sort of ongoing to continue to upgrade the work as we're actually doing it. I think, look, when you think about Clark, you know, Clark, it's all about producing manganese or high-purity manganese for going to batteries. So at the moment, that is a market that's developing, obviously, at a particular rate. We're certainly oriented towards the U.S. We're the only sort of manganese producer that's sort of ready to go in that space. What we do have is a number of agreements in terms of MOUs and NDAs, where we're currently talking to different customers. The whole driver behind the current bulk sample, and the next, the decline development, is to give enough material to try and work with those customers to lock in what exactly their needs look like. The advantage of Clark is it's relatively shallow. It will be a separate mining area in terms of won't be accessed by the shaft like Taylor, will be accessed by the decline. There are synergies around things like what would you do with waste rock and tailings? You can put it back in, potentially, where Clark is. There are shared infrastructure things around mobile maintenance, equipment, power, the deep watering, obviously, that's going on now. As I mentioned earlier, about 26% of the capital that's being spent at Taylor is actually shared infrastructure for future projects, and Clark will get the benefit of that. I think the critical piece for us is, you know, $60 million for the, the bulk sample on the decline. That gives you enough material to further engage with customers. That $60 million, obviously, we'll be talking to the different parts of the government around support because manganese is a critical mineral. And generally, you'd probably look at something around a third of that sort of being supported by the government in the form of a grant. And then if we go to the next stage of development, you would also talk to the federal government about what assistance exists in that place. Clark is one of the more interesting ones because it does have such a huge potential where it could have a mine life of 80-ish years, roughly, producing a high-quality product, which has a high margin. But it's a market that we're gonna help build with the car, you know, the battery producers and ultimately the end car user. Mm. [inaudible] Yep. Yeah. Yeah, it does. Look, there's just one quick follow-up on the feasibility study before I ask my second one, if that's okay. And that's just related to the decline in sustaining capital requirements. Am I right in understanding that that's largely all related to the fact that you've done the dewatering work up front? Or is there anything else driving that lower sustaining capital? Yeah, Pat, you wanna answer that one? Sure. Thanks, Graham. It's mainly in part to a change in the life of mine dewatering strategy, post the advanced dewatering at the front end of the plan. So we had life of mine surface dewatering wells in the PFS capital. We made a strategic shift based on more efficient dewatering, to move the life of mine dewatering capacity to more underground handling. Therefore, we eliminated 15 wells that had been planned to be drilled from the surface over the life of the project during the operating period that we're in sustaining CapEx. So it's primarily the elimination of those 15 wells and moving that capacity underground, but also some optimization of underground equipment replacement strategies, too. Got it. Okay, look, just quickly, my second one is around the federal approvals. Graham, if you have an update there, especially given, you know, your recent hits at Flux, then you also need that tailings facility. So what, what are the next critical steps in terms of getting those approvals? And then when do you need the approvals by for that tailings facility to not be an issue? I think, look, I'll get Pat to talk through the detail, but don't confuse the fact that we have, you know, the first period of time, the tailings facilities on the non-federal land gives us plenty of time for this. It's actually the next tailings that we build on the federal land, plus things like the power line we need the federal approval for. So, Pat, why don't you unpack that in a bit more detail? Because I think that is an important piece. Yeah. So that is critical. The initial tailings storage facility is all on private land. We don't require the Record of Decision on the Environmental Impact Statement for that. The FAST-41 process, obviously, we're the first mining project placed into the program by the Biden administration last May. What that does for us is it gives us certainty on time frames and a more coordinated and efficient process. So there is a schedule already committed by the federal agency that gets us to a decision, a Record of Decision, in the second half of calendar 2026. So that's a bit over two years from the notice of intent to Record of Decision, which is about half the time, less than half the time we see in a typical project. So that gives us a pretty significant float in terms of on private land tailings storage. We don't need that second TSF until the sort of 2030, post-2030 timeframe. So we've met the first two milestones on schedule in the federal permitting process under FAST-41. Completeness determination on our mine plan of operations in mid-December. The next big milestone is the Forest Service will publish their notice of intent to prepare an EIS in May, and that'll start the public scoping process. So, I guess for the second tailings facility, you probably need an approval by 2027, I'd call it, if you need the facility by 2030. Is that the right way to think about it? We've got, we've got 18 months to 2 years of float on that schedule. So, with the- Mm. With the FAST-41 time frame. Yeah. Got it. Got it. Okay, that's very clear. That's all from me. Thank you. Your next question comes from Lachlan Shaw with UBS. Please go ahead. Yeah, morning, Graham and Sandy. Thanks very much for taking my question and your time. So just to come back to the 12% IRR on Taylor, can you just talk to maybe some of the risks in terms of timing, spend contingencies? And secondly, just around some of the assumptions. So I know you're using $1.45 a pound long-term zinc. Consensus is roughly $1.20 a pound. Yep. Maybe just give us a bit more insight around that, please. ...Yeah, look, absolutely. Look, when it comes to the pricing, obviously, the zinc price is something we've had a strong position on zinc price for a period of time. I don't think we're the only ones in the industry. So if you look at some of the other major zinc producers, one of them being a trader, another one being a large producer in North America, you know, they would actually have a very similar long-term zinc price to ours. Consensus pricing is always interesting because when you look at the consensus pricing, the reality is there isn't as much coverage on zinc as there is like copper. If you pick out a couple of people who probably do a bit more detail on that, you actually do see that their long-term price is very similar to ours. If you look at the industry benchmark, for example, of Wood Mackenzie, if you look at when they use an inducement price that they need to sort of deliver new projects to meet that, if you like, supply gap, supply and demand gap that exists, they have a very similar price to ours as well. So I think for the people who've done a fair bit of work on the zinc side, we're probably in the ballpark of what most people are seeing for pricing around that. I think the reality is we probably, you know, the supply side is an interesting one because over the last probably couple of decades, you've probably seen the grades pretty much half. You know, Taylor has been the only discovery. You essentially need to produce almost like three Taylor equivalents a year to meet the current forecast supply demand gap, by if you like, FY31. I think where some of the, the work is different than ours, where people haven't necessarily done as maybe not as much work yet, would be on the China side. So historically, China's been a large producer of zinc domestically. You know, you've really seen, despite higher prices over the last five or six years, they've struggled to bring new supply to the marketplace, and that's really driven by them to continue grade decline as well as environmental regulation. And for us, it's a very similar story that we saw play out in manganese about five years ago, that we're seeing playing out in zinc at the moment. I think the critical piece for us, though, with, let's be honest, we never will ever get commodity prices right. You obviously want to be in the ballpark. What you do wanna do again, is have a multi-decade resource that allows you to capture the flare-up in pricing, as well as the down view pricing over time. But if you do look at ourselves, the other major producers and some of the analysts who do more work, you'll see we're not out of the ballpark when it comes to what the zinc price is. Okay, understood. Thank you. Just to follow on, so you commented on government assistance. What have you factored in again to the return calcs in terms of assistance going forward, and is there a risk here in terms of potential change in government and change in policy around some of these things? To be very clear, there's probably a number of variety, particularly for Clark. There's like the early stage development around the decline, and also the initial bulk sample, that you'd probably get around a third. Let's assume it's a little bit higher than that if you go to the next stage. They're all things at the moment that aren't guaranteed, so they're not included in our valuation. There are some potential other issues around tax breaks that we also haven't really included in the valuation yet, because there's uncertainty around them. So from our perspective, we haven't banked that upside into any of our cases, but you should expect to watch news flow, I guess, over the next 12 months as we continue to progress those talks, because I think Pat and the team have done a really good job, and it's easy to forget that we produce two of the critical minerals that they're looking for to be produced in the U.S. And while there might be a change in the administration that occurs in the U.S., the view is, you know, if you think about distancing themselves from China in terms of supply chain, security of critical minerals, that's unlikely to change from one administration to the other. And where a lot of the potential investments are going are actually in red states as well. But we haven't factored that in, to be clear, yet. Okay, that's clear. Thanks, Graham. Second question, just quickly. So just on working capital, and you know, I guess, the anticipated release eventually. Can you just talk to, I suppose, what you're looking for there going forward? And I know there's been issues, particularly in South Africa, in terms of aluminum. Is there any good news coming, coming there, or should we keep bracing ourselves? Thank you. The key is Richards Bay. It is three shipments that basically slipped in December. Obviously, aluminum is high value. You know, we expect that to sort of be improving, but perhaps, Noel, you can talk about what are we seeing at Richards Bay in terms of port and also Transnet. Yeah, Graham, thank you for the question. The more broadly speaking, rail and logistics is one of the three crisis committees, chaired by the president himself. So it's getting a lot of support, you know, to to improve its efficiencies. And Richards Bay is one of the, you know, the bigger ports that attract a lot of attention and work. We're starting to see improvements there, both there and Durban, where we get our product to market. So I think I'm quite optimistic that things are gonna get better in the second half, and we're working very closely with Transnet, you know, to make sure that that happens. Just to add to that, that we have actually cleared those volumes in January, so they really were quite short-term labor challenges over the Christmas period, and vessels did get away early in January. So we're not expecting to see any systemic constraints at that port in the near term. That's clear. Thank you. I'll pass it on. Your next question comes from Lyndon Fagan with JP Morgan. Please go ahead. Oh, good morning, everyone. Graham, I was just hoping to push a little further on just the Hermosa approval generally. I mean, I guess we've spent over $2 billion to this point. We need another $2.1 billion. We've got zinc needing to rally 40% from spot just to get to the feasibility assumption. And even with that, we're only at a 12% IRR and an NPV, half the CapEx. So I'm just sort of looking at it going, it feels tough. Why not hit the pause button, and why not do a buyback where you've got a stock price that's been floundering, and surely the returns on a buyback look pretty good? Yeah, look, I think, look, Lyndon, it's a good challenge. I mean, maybe if we sort of focus on the zinc price today, I mean, the zinc price over the last six-ish months has been tough. I think that's a function very much of what you're seeing, particularly in Europe, but then China in the short term, which we don't think is not certainly a medium or long-term issue. So we would expect that price to rebound. As we mentioned, we see a very large supply gap of about 3 million tons that essentially will grow rapidly to 2031, and we don't hit production, obviously, full production for a period of time yet. So we're quite confident around that supply gap, actually existing and hence stronger pricing. Look, I think your question around, and the other thing we'll always come back to at Taylor, we won't shy away from the fact that we bought this. When we bought it, what have we been sort of hurt by? Two years delay on COVID, two years delay, if you like, on dewatering high costs. If you ask me the question, would I go out and buy the asset again? Absolutely, every single day of the week, and I'd buy it for exactly the same reasons that, you know, as much as we've seen some downside on water and time delay, some of which has been outside of our control around COVID, what we have seen is resource growth. Resource growth in zinc, resource growth in copper, and huge potential in the manganese space. They're all things at the moment that are not factored into that 12% return. They also do not include the fact that Taylor, again, is carrying that heavy burden of capital around dewatering all the roads in and out, the site infrastructure, the power, et cetera. And again, if you go find a basin play project that sort of happened over most mining companies, and that carried that high infrastructure cost, it is probably hard to find something that sort of, you know, generates a really strong return for that first investment. Your question around buybacks. Look, 12 months ago today, I'd be expecting to do this as well as buybacks. And I think that would be the perfect world from my perspective, probably from the board's perspective and from the investor perspective, because we think that our share price at the moment is undervalued. So obviously, we'd like to buy as we have in the past. The reality is the challenge for what the management team and the board is to manage the short, the medium, and long-term viability of the group. As you know, we do have, you know, maturing operations in terms of GEMCO and Cannington, uncertainty around Cerro Matoso, around nickel. That doesn't mean that we'll go out there and basically make bad decisions just to keep the company going. But for an IRR of 12%, which is carrying a high capital burden of roughly 27% for future developments, I do believe that this absolutely is the right investment for us. But the challenge around the buyback exists. We would love to get back to that position where we have excess cash, and that excess cash we're using to actually buy back our shares. Your next question comes from Robert Stein with Macquarie. Hi, team. Thank you for the opportunity. Just a quick one on Cerro Matoso. You would have seen the announcement this morning from BHP around the impairments and potential shutdown of the Nickel West assets. How are you thinking about current spot nickel pricing in the future of that asset, the competitiveness in the global nickel market, compared with the context that Indonesia is seemingly flooding the market with cheap nickel? And I've got a follow-up. Yeah, ironically enough, if we talk about our market, because we sell a ferronickel, which gets a discount for the iron, we've actually seen that discount shrink, so our realized price is actually okay. It doesn't mean that the industry isn't under challenge generally, but relatively speaking, you know, our price has been okay. I think the bigger issue for us at the moment is more natural grade decline that we see occurring at Cerro Matoso. The sweet spot of production is probably around 41-43 million tons of ore, sorry, thousand tons of ore, sorry, nickel units we produce every year out of Cerro, to make it sort of economically make sense. Ricardo and the team, so Ricardo runs Cerro Matoso. You know, it's always been a challenge since we started that business as part of the demerger. But what they have done is found things like, you know, satellite ore bodies such as [Lezers] and Esmeralda, Q&P. They've done OSO project and a few other projects that have really allowed us to try and support that nickel. That challenge lies ahead of them now, as they look at some different satellite ore bodies that are close to the current deposit. There is also potential to also look at producing, if you like, more of an MHP-style product that would sort of be something you could use to go in batteries into the U.S. We have done heap leach trials historically at Cerro that have worked quite well, but at that stage, there wasn't really a market for it. That's potentially changing with what's going on in the U.S. and battery demand, particularly if they steer away from Indonesia, which-... predominantly targeted towards China. So that's all stuff that we're doing as part of the strategic review. We're having a look, if you like, at the grades and how we can keep it. We're looking at the different old technologies, and we're looking at where the market's actually going. The objective at the moment for Cerro Matoso is to actually keep the business cash flow positive, by the end of this year, which the team has some plans on track to do that. One of the bigger challenge for us also in Cerro Matoso, is the changing tax structure, around royalties and other issues that have sort of hurt the value of the business and the cash flow over the last probably six or nine months as well. But probably towards, you know, the full year financial results, we'll talk more about where we are in that. But probably unlike many other competitors, you know, we're aiming that we'll be cash flow neutral, roughly, by the end of this year. Thank you. A broader question around portfolio. So you are acting countercyclically with Hermosa here, you know, investing ahead of a shortage in commodity. If we look at the met coal market, you know, prices are quite positive, noting you do need cash to fund some of this growth. But is there an opportunity to split the portfolio, capturing base metals base metals exposure in a discrete vehicle and typical ferrous exposure in another, given, you know, some of the transaction multiples recently on met coal sales have been quite positive and quite good, and probably valued more than the assets are within a company itself? Yeah, so look, I think that's a really good question. If you sort of look at where we're going as an organization, and we talked about in one of our slide packs, you know, depending on your pricing point, roughly we're about 50%, if you like, or 45% base metals when we've emerged. Today, we're about 79% if you factor in Taylor going forward. So we have been shifting the portfolio for a period of time. You know, we've obviously exposed the thermal coal because we do believe there are alternatives out there in the world today that make that economically long term, not a business for us to be in. If you think about met coal, we would still mount the position today, that when you think about metallurgical coal, you know, while green steel is coming, it's probably 20-30 years away from being commercially available on a wide sense and make sense for people. That probably fits in with the mine life that exists at Appin and Dendrobium. So we're not against met coal. We actually still think it's got a place to play in the portfolio. In fact, it's got a place to play that we rely on those higher cash flow generation dollars that you spoke about to actually fund our growth projects, you know, not only obviously at Taylor, but things like the fourth grinding line for Sierra Gorda. We're using those cash flows to continue to actually move towards more of that base metals exposure. I think the flip side to that is everything in the portfolio, we've always talked about being for sale, if someone offers the right price. Whether it's met coal, manganese, aluminum, copper, that applies to everything. So you know, if someone is willing to sort of pay what we think is more than what we can realize, absolutely, we'll look at it. We should be doing that for our shareholders. So just a quick follow-up. You're not averse to potentially exploring capital recycling from the met coal part of the business back into, you know, potential acquisitions, funding your growth pipeline, distribution back to shareholders, if you got the, you know, a punchy price that we've seen in the market of late? If we got a great price for that, or Cannington, we would absolutely look at recycling, and I don't think it's just Illawarra, I think it's across the board. But in saying that, I would be clear, you have seen our intent historically. We made the conscious decision not to invest in Dendrobium, Appin, and Eagle Downs, and invested that money into Hermosa and also things like Sierra Gorda. So our preference is those commodities, that we think are gonna play a key role in the energy transformation because of supply and demand fundamentals, like we spoke about the zinc and copper, we think over time will give far greater returns. Thank you very much. Your next question comes from Glyn Lawcock with Barrenjoey. Please go ahead. Good morning, Graham. Good, thanks. I can't help but feel that Hermosa is your Jansen a little bit. Just with it, I mean, you've talked a lot, 12% return, higher zinc price, but, you know, clearly you've got lots of options at Hermosa that will come through potentially, plus any benefits from the government. To give me some comfort, and I guess the market, you know, like, that 12% return, what does that potentially look like? I mean, I'm sure you've-- when you discussed it at the board, you said, "Well, if we can get the two deposits up, plus government assistance," what does 12% potentially look like, you know, in the future? Yeah, maybe if I'll slightly take that in a different direction, Glenn, and then we can come back to your question. One, I'd say, look, I won't take the Jansen question because I think they are fairly different. But I would actually say, what I think Taylor would be, would be our Cannington. It's a lead, silver, zinc mine. You know, it's open stoping, it's processing the same way. It's got a similar customer base. What do we have at Hermosa that we didn't have at Cannington? We don't have the same silver grade, but what we have is a much larger resource. And keep in mind that the Cannington resource grew from 29 million tons to, you know, in excess of 80 million tons. We think that kind of opportunity exists at Taylor, plus it potentially has a copper circuit, plus it has flux, which we're hoping will be another Taylor, and Taylor itself is already open at depth. The challenge is how do you value that, Glenn? Because, I mean, if you look forward on an NPV-IRR basis, the reality is once you get out past year 15, year 18, you're probably not getting a lot of value for that kind of optionality, or you're not getting a lot of value for that resource, in terms of what it's really worth in today's dollars. But what I would say is, when you actually have a look at just the Taylor itself, when you have a look at some of the cash flows we're talking about, when it's up and running and you're at steady state, I think that's when you start to sort of sit back and say, okay, if that's what you're gonna get from Taylor, and we talked about having some numbers around, you know, basically, annual average net cash flow of $320 million post-tax, you'd have an average EBITDA margin of 50%. So that's what you're gonna see. At the moment, the mine life is 28 years. Just for Taylor, I'd be surprised if we can't add another 10 years before you even add the copper piece, before you even add Flux, before you even add Clark. Clark is a difficult one because Clark, to me, could be worth zero in terms of the value, if the industry decides not to go to manganese, or it could be the most valuable asset we have in the portfolio. We're probably not gonna know the answer to that probably in the next 3 years-4 years. So they're all the things that we obviously try to talk to, we outline to the board around value and assumptions. Some of that, obviously, particularly around Clark, is a bit more commercially sensitive at the moment. But I think what there is clear here is a lot of upside. And I think that's where, you know, again, I'll go back to the opening comment. Where you make money out of this industry, you make money out of having a large resource that you develop over many decades, that has multiple development options, and we shouldn't lose sight of the fact is we're operating in a safe jurisdiction as well. You know, good availability of workforce, good regulations, and once we're up and approved in this space, we've got the federal approval, it's pretty well, you know, you're mining 20, 30, 40, 50 years out. Yeah, I guess, but when I, when I liken it to Jansen, you know, I have to go for stage four before I actually feel like I'm getting a decent return, and maybe that's the same case here. I have to put everything into it to get to the return that actually is much better than 12. Just a second question. Just I know Lachlan posed it to you, but just can you be more definitive? Is, is the net debt coming down? Is the working capital actually being unwell? I know there were some shipments that missed the half, but I feel like we've been talking about the working capital unwind, and you talked about in the September quarterly, again, the December quarterly, and obviously, today, only four weeks later, but is the net debt coming down? I mean, because the cash flow was, you know, I think we all look at the last six months, and we're completely surprised by how weak it was. You know, is it physically unwinding, or is this, you know, like, it's actually happening today? Well, maybe let's talk about some of the one-offs and some of the cash flow impacts we've seen in the first half, and then I'll let Sandy also talk about the unwind, but also why we see more upside in the cash flow in the second half. Sandy? Yeah, sure. So look, I mean, we did have that working capital build in the half, Glenn, and that was really very specifically attached to those shipments in the kind of higher value aluminum chain, specifically at Richards Bay. And as we've discussed, we have seen those vessels clear in the January period, so we don't anticipate that to be a long-run sustained challenge. More generally, to your point, though, we have seen working capital elevate. Quite a bit of that has been through the shift in our portfolio. So for example, as we've seen Brazil aluminum ramp up, we've seen an increase, a sustained increase in working capital associated with that. So there has been an element of kind of deliberate portfolio-based shifts in our working capital, and then obviously in this cycle, we have had that one significant event at a port that happened to be holding three cargos for us, a period. And I think you touched there on net debt and what we can expect to see there. Look, as we've said before, we do like to hold it to that $1 billion number. We do expect through this growth phase, we might see that out to the mid-$1 billions. Obviously, we're looking at that and managing that closely. You would have noticed we've done a cost and capital review in advance of this bid decision to kind of square ourselves up and set ourselves up for a successful funding of Taylor. And so look, I think you'll continue to see us acting very proactively to protect our balance sheet, and also manage the expenditure profile. No, I appreciate that, Sandy. I guess I was just wondering if it, has it actually come down from the $1.1 billion level in the last six weeks as a result? Because, I mean, the next six months- We've cleared the material, we've cleared the material vessels, Glenn, so we're obviously not refreshing our numbers, but you can take from our message that we do think working cap is under control in that regard. Probably the biggest driver in some of those working capital deals over the last couple of years has been Transnet. I think to Noel's point, what we are seeing is some positive signs in that space with the president's focus on that and also a clean out of the Transnet team. The other one for Richards Bay has been the challenge around thermal coal going out there in terms of port congestion, and that's becoming more manageable as they switch that to some different locations as well. I do think one of those fundamental issues we've encountered over the last two years is certainly easing, Glenn. Okay, thanks very much. Your next question comes from Paul McTaggart with Citigroup. Please go ahead. Hi, all. Just to confirm on the gearing, we're now comfortable for, you know, the previous range was whatever it was, 0-500. We're We're now sort of comfortable that it's sort of up to that 1.5, and obviously through time and subsequent to CapEx at Taylor, it'll come down. Is that fair? So what I would say is, we used to use the number around $0-$500 at a certain portfolio configuration. We always said that would shift. What's changed? Obviously, some things have gone out of the portfolio, some things have come into the portfolio. So what we have seen, obviously, is some higher margins through things like Sierra Gorda that have actually helped us have more comfort going forward as we think about the variability in cash flows. And I think to your point, we could see a peak up to about 1.5. Ideally, we're probably around that one, is what I'd say the, the number is we feel more comfortable around on the configuration of operations we have now, plus the growth projects. ... Thanks, Graham. And just on Taylor CapEx. So, I mean, there haven't been a lot of big mining projects in the U.S., so I'm unsure, you know, whether we're gonna see the same inflationary kind of pressures there that we've seen elsewhere, like here in Australia or, you know, or in LATAM. So, you know, how confident are you about being able to sort of nail that number? Yeah, maybe, Pat, why don't you sort of talk a little bit about the changes between the pre-feasibility and the feasibility, and the current state of the market as you think about it, and also what the opportunities are going forward, recognizing that we're executing this over a number of years, so the world does move. But maybe, Pat, you wanna cover off those? Sure. Thanks, Graham. I think what we've seen, if you go back to when we were in the market for the PFS estimate, to when we were in the market for the FS estimate, we saw essentially the industrial building construction indices in the U.S. up 37%. You know, some of the commodities that make up that, steel 61%, concrete 30%. So we essentially were in the market for the FS estimate at what was a peak in the inflationary environment. We've seen that come off since we were in the market for the feasibility study estimate. We've tendered a number of packages that were part of the market tender at the time of the feasibility study estimate. Most of those are coming in, you know, in a level that shows some leveling off of those trends, and potentially starting to come down. So most of the escalation we saw in the estimate was in the surface packages, primarily electrical, concrete, commodities like that. And certainly, that was a big part of it. So as we go forward, as Graham said, we're executing this over a number of years. We've got some strategies in place. Alternate sourcing has been successful in helping us mitigate some of those impacts on things like steel. Our contracting strategy, we're very much going to unit rate contracts on the shafts, underground lateral development, where we sort of push some of that risk to the contractor and locking in unit rates. And then on some of the surface construction packages, we executed the construction of our water treatment plant with a guaranteed maximum price contract, where the constructors are very much involved in the early engineering and had no material cost increases right in the middle of that inflationary environment. And so we intend to take that forward into the surface space. So between contracting strategy, some hopefully, it appears to be leveling off of those inflationary trends, and some of what we're seeing in our recent tenders, we believe we can, you know, manage any further escalation in those scopes. Probably fair to say, particularly around the shafts, Pat, I mean, how many shafts are being built, for example, in North America at the moment? Yeah, there really aren't any other major shaft sinks. And if you look at the mining construction landscape in the U.S., it's a very different context than what you see elsewhere. Really, there's only one other major project of this scale in construction. They're very early days. So what we saw is highly competitive tenders on the shaft, so lots of participants hungry for the work, and we in early stages on our surface tenders because of contract approach and the current state of work in the U.S., seeing some of the same trends. Thank you. I mean, I just had one last one, if I could. Just I noticed OpEx for Sierra Gorda was up 13%, and that was partly around a payment, you know, as part of a three-year agreement. So I'm gonna presume that part was a one-off. So if we'd extracted that out, that sort of one-off payment, what's underlying inflation running at in Sierra Gorda? I think, well, Sandy will look up the inflation number. I think the other thing to note here, obviously, we had some challenges on the moly circuit in the first half of the year, and we're going through the shoulder of the ore body, which is always forecast to be lower grade, which is what we're actually getting at the moment. We expect that grade to actually start bouncing back, as we sort of get into next year. So that's obviously having an impact on the... For example, in 2023, the grade was 0.42. This year it's running at about 0.38, and then 2025, you know, we're back out to 0.43 and then growing over time to probably more of a number around 0.46, maybe around the underlying inflation. Yeah, look, so I'll talk to the union agreement, perhaps that helps you a little bit. So there is that one-off union agreement that related to kind of the capture of all three unions for a 36-month period. And I think that is definitely the biggest driver of the unit cost guidance revision that we've seen there. It was planned, but I certainly think we did see a uplift against our expectations on what we thought could occur there. Aside from that, the only other kind of the significant other change just relates to some of the higher service rates on fleet equipment, which goes to that broader inflationary context. Yeah. Thank you. Your next question comes from Lyndon Fagan with JP Morgan. Please go ahead. Thanks for the follow-up. Graham, I was hoping to just talk about the stock price. I mean, it is floundering and, you know, we've got a cracking good met coal price. There's a few other commodities that are actually up where they were a year ago. I understand the free cash flow isn't where it was, but I'm just wondering what you can sort of say to try and instill some confidence in the outlook. I mean, operational performance hasn't been probably where you were hoping it would be, but how can we address the operating performance and how to think about it going forward? What have you done to sort of inject a bit of stability there? Thanks. Yeah, look, look, I think that's a really good question and goes to the heart of some of the challenges. But if I take a step back and think about the stock price at the moment, I do think there has been an overhang around Taylor. I think cash generation, to your point, in the first half of the year was poor around working capital, but also, if you think about the major cash flow generator at the moment being Illawarra, that was impacted by the planned additional long wall moves, as well as the union agreement being fought out in the first half of the actual quarter of this, the last year that's gone. That's all had a negative impact as well as the aluminum price has not been strong. If you look at our sensitivities, we are hugely exposed to movement in aluminum and aluminium price. That's our single biggest movements. What are you looking for in the second half of this year? You've seen the production increase, we talked about by 7%-7%. You're also seeing, obviously, alumina price sort of bounce over probably the last four or five weeks. Ali's probably hovering around a particular level, but I think that's got upside, particularly as we look at some of the demand starting to actually come back. We are seeing the majority of our costs rather come down or they're held flat. We're seeing CapEx actually come out of the group, and I'd expect to see improved production, particularly in Illawarra, as we're not doing the two long wall moves in the second half. It's always been backdated. We are seeing, obviously, Hillside run at record rates. HMM's been running at record rates. The challenges have been more Mozal, CMSA, and Illawarra. I think Cannington is one we're watching because obviously we just had the cyclone go through, so Joe and the team are managing a fair bit of water at the moment. It might be the most water we've ever seen there. We don't see anything materially to talk about yet, but that's one to watch as the rain actually recedes. It's obviously something we normally see up there, so they manage it well historically. But for me, it's all about Illawarra and aluminum and alumina for the next half of the year, coupled with those lower costs, lower CapEx and the production growth. As far as just hitting guidance goes, Graham, I mean, would you say that your guidance that you're giving the market is a bit too optimistic? I mean, we've been seeing quite a few downgrades in recent quarterlies. Yeah, I think there's a balance there. I mean, I think, you know, the previous three years we did a bit of analysis. I think we virtually hit 100, 100 and 100%. We've probably had a tougher last 18 months. You know, Illawarra's, by its nature, a long wall underground mine is a little bit more complicated when you look at some of our peers' performance in that space. Cannington is going to become more variable, but I do think there's an opportunity to improve how we perform across the group. There have been some own goals, obviously, around Mozal as we recover from the double fatality. I think there are some great pockets of, if you like, operating performance in the group, but there's some weaknesses that we need to address. We've got plans in place for those, and I'd expect to see an improvement the back half of this year and certainly as we go forward. Philosophically, we do have the discussion around, you know, we've had a rule of thumb that we like to use the same budget number as the market guidance. We don't run two sets of numbers like I know a number of our peers do, and that's really around simplicity and to make sure that all our operators buy into what we're putting out in the marketplace. I think what we perhaps need to recognize are some of those more mature assets, such as GEMCO and Cannington, there is gonna be a little bit more variability. So that's something we'll have a think about, maybe a bit more of a range. But things like Mozal, Hillside, HMM, you know, they should be hitting their targets day in, day out, and Worsley. Okay, thanks for that. Your next question comes from Paul Young with Goldman Sachs. Please go ahead. Hi again, Graham. There's always so much to cover here, so, thanks for taking my, follow-ups. Just on Sierra Gorda, Graham, and, on the lines of or topic of CapEx inflation, I know you've given some OpEx guidance there, which has increased, but just calling out, you know, Antofagasta's recent, 20% increase in CapEx and Centinela effectively across the road, if you can call it that, near Calama and Sierra Gorda. I know you've given the $500 million number, for the fourth milling line, and I own 45%, and it's not a huge therefore, your share is not huge. But, what sort of inflation are you seeing on that CapEx number? Are we, are we gonna see an increase potentially on that number? Yeah, look, I mean, that's obviously something we're working through the feasibility study now. We expect to see it finished by the fourth quarter of this year. There is a three-year construction period to basically carry that out. By its nature, it's a fourth grinding line, so it's relatively straightforward from a technical risk. We're probably seeing the CapEx, historically, we've talked about 100% being around the $500 million mark, probably creeping closer, Paul, to about $550-ish at the moment, based on the current set of numbers we're doing. We're in the process of going through a peer review of that, and that's clearly something we'll scrub and test. So you have seen some inflation, but not to the quantum that you've seen. But I think some of that's driven by the technical aspects of our project are a little bit simpler in the size as well. ... Yep, got it. Okay, thanks. And then, we are starting to just switching to OpEx across the smelters and refineries, on the aluminum chain. Good to see we're starting to see some margin expansion with lower costs and an increase in price, particularly for alumina. Just on the smelters ground, Mozal and Hillside, I know you don't provide guidance for the smelters, but I know you made some comments in the report around financial report about PPI potentially offsetting pitch and coke and other factors. So I guess the question is around the PPI, is it offsetting pitch and coke, or are we gonna start seeing some further cost reductions at Hillside and Mozal? So look, the way I think about it, maybe if we break these into different components at the moment, particularly Mozal, we'd expect to see higher H2 volumes as we start putting pots back online, which will help on their cost position. I think, look, Hillside, Kelvin and the team are doing an amazing job in an environment where we're seeing, you know, record load shedding continues to be a challenge. If you think about that smelter raw material basket cost inflation that we talk about, and that's really your coke, your pitch, your AlF3, and your alumina. We probably saw in the first half of the year, that fell to about 42%, whereas the previous half was about 44%, and we are obviously seeing some, you know, positive movements in things like pitch, coke, caustic. I think the flip side to that is you've obviously got the alumina price potentially going up, that goes into the smelters, but on the count of that, you're seeing some effects that it's helping at the same time. PPI, when it comes to the power contracts, you know, that's probably come off a little bit if we think about 2023 versus 2024 at Hillside and Mozal. You know, it was double digits that we saw around 17%-ish, that kind of mark in 2023, whereas it's much closer to the 6%-7% that we're seeing in 2024. Great. Thanks, Graham. Funny enough, I think energy costs in Southern Africa at the moment, in the short term, you know, you're better positioned than you are in places like Europe. I think the challenge for us long term, obviously, is securing long-term green power contracts. Yeah, thanks. Just on that, the power contract at Mozal expires in 2026. What's your sense at the moment on just directionally, where that contract's going? Yeah, so I spent a bit of time in Mozambique just before Christmas, talking to the president. Obviously, the government of Mozambique owns a share of that smelter. You know, we're probably about 1% of the GDP, create a lot of jobs. We're obviously right in the middle of, close to Maputo there. Very, prominent, if you like, large industry that creates lots of job opportunities. The government's well and truly aware of that, and that's something we continue to talk with them about. You know, I found the discussions so far have been constructive. They are talking about putting a working committee together to try and take this going forward, which I think is a positive sign. We continue to engage them on a continuous basis, and hopefully by full year results, we'll have a little bit more to talk about on that space. I mean, the challenge in all this, you know, conversations is countries continue to develop, the demand for power changes. Understood. Thanks, mate. Your next question comes from Kaan Peker with RBC. Please go ahead. Morning, Graham and Sandy. Thanks for taking my call. Just sticking with Mozal, there was 70 odd pot lines offline, and you've talked about getting back to nameplate by CY, end of CY 2024. Should we sort of view that as a linear increase in or, or recovery in pot lines? Yeah, the answer to that would be yes. I mean, the biggest single availability has been crane availability, as we've redone all the girder work when we found out the fault, if you like, in the equipment, and hence the other crane upgrades as well. So we're caught up, if you like, on the work that was sort of, or the backward work that was sort of causing instability in the pots, and we're slowly in the process, in a linear nature, now adding those pots on month by month. Sure. Thanks. Second one on Hermosa, more around the progress at Taylor. You know, still dewatering efforts are, I suppose, on the critical path. Maybe can you give an update on this? And has the shaft excavation started, which was I think expected to start in early 2024? Thanks. Yeah, look, I would say going exactly to plan, but maybe, Pat, you can sort of expand on the dewatering, and also where we're up to with the shaft work. Sure. Thanks, Graham. So we commissioned the water treatment plant that was associated with the dewatering program on schedule in August and started productive dewatering. So that's all on schedule. We've drilled and commissioned 4 of the initial 7 wells. I finished drilling a fifth well recently, so we're working on developing that well. So that's all on track. I think 7 surface wells, with the rest of them being completed sort of early start of FY 2025. So starting to get some real results back from the well completions and dewatering and feel like we're in a good position with respect to that piece of the critical path. On the shafts, the pre-commitments the board had approved were to get us through the pre-sink for the shafts, so to get down to about 35 meters, and line the shafts, do all the sub collar, and hoist infrastructure. That's done for both the main shaft and the vent shaft. We're now fabricating the Galloway, the sinking platform that goes in, and the schedule had always been that the main sink, post pre-sink, starts in the first half of FY 2025. So, middle of the year, and that remains on schedule as well. Probably fair to say, Pat, when it comes to dewatering, more work to be done, but there's no surprises we're seeing today. Sure. Thanks. No, no surprises. Yeah. Thank you. Just on Cerro Matoso. So, I know sort of looking at being cash flow neutral, given the large ferro nickel discounts are a good outcome. But, just wondering what further cost initiatives, cost out initiatives, would be focused on? Plus, and if Cerro was closed or put on care and maintenance, would that provide more balance sheet flexibility? Thanks. Look, I mean, if you think about the book value of Cerro, which, you know, we're not talking about a large nickel exposure from, you know, our experience. The carrying value is, for, let's say, roughly $400 million-ish, so it's not large in the scheme of things. I think obviously it has a large economic impact on the local communities where we operate, which we're very conscious of. I think what we are looking at the moment is how can we structure the business slightly different for a new paradigm shift, if you like. But I think, again, looking at the heap leach option, which we've done trials in the past, large scale trials, to see if that opens up a new market, is also something worth pursuing. The challenge we have had over the last 12 months, as I alluded to earlier, we have seen changes around withholding tax, which effectively went from 10% to 20%. We did see a change in deductibility to royalty, which recently got reversed, so that's sort of working its way through the system now. We do have some reductions in capital, sustained reliability capital, about $10 million as we look at the scope of the furnace rebuild and defer some non-critical equipment. Plus, we're going through a cost reduction program at the moment on the side around optimization of consumables, vehicles, structures, et cetera, and also looking at some options around electricity. So that's all stuff that'll come through the strategic study, which we'll come back to the full year results. Thank you. Cheers. Your next question comes from Glenn Lacock with Barrenjoey. Please go ahead. Oh, hi, Graham. Just a quick one. You made the comment, obviously the stock is obviously leveraged very much to the alumina market and price, and you said—I think you said you're starting to see some positive signs. So just reflecting on Norsk Hydro's results overnight, you may have seen. They didn't paint quite a similar picture. I mean, where are you seeing the demand? I think Europe was your trouble spot. Are you actually seeing demand pick up physically for aluminum now? So what I'm seeing, alumina was probably the one I was more talking to, Glenn. Obviously, with some of the changes that our cohort made with the refinery here in Western Australia, but also potentially some of their other options they're gonna have to make a decision on soon. I think that's certainly part of the alumina market. If you think about our alumina market, we have a large exposure to alumina that doesn't go through our smelters as well. So that should benefit our cash flows pretty quickly. What we probably have seen is aluminum sort of stabilize around that $1 a pound mark. What we are seeing is a continued push, if you like, in China, to sort of adhere to that 45 million ton cap, and we see that in terms of what's going on in the rest of the world around development. I guess what we would also forecast is we would probably see, you know, the GDP in Europe over the next 18 months, sort of come out the lows of where it is, and part of that will probably be driven by things like auto demand, which we think will help support a little bit more on the aluminum side as well. Alumina is probably the immediate bright spot that I'd call out, because it was sort of hovering around that $330 mark and seeing it around the $368 or $375, which we think is sticking for a period of time, will help us. Okay. Because I think you called out on previous calls that, you know, you've had to push some of your aluminium from Europe, where they wouldn't take it, into, say, North America. Right. Now you've got commodity things in North America, like lower trailer build rates in North America is hitting the transportation demand side of alumina. You know, like, is it... Do you think we're in a surplus again for this year as well for alumina? I think it's an interesting position at the moment because obviously you've also got premiums sort of moving around on location. Some of that's driven by what's going on around conflict around the world, and for example, taking it through the Red Sea and things like that. So I think that's sort of driving some piece. Mozal is still 100% going into Europe. What we had said is Hillside had been redirected a little bit to the US, as some of the European customers had a preference of purely what they call low-carbon aluminium. So that required us to put a bit of the Hillside material into the US. On that, we were actually getting pretty good premiums. They tend to have held up at the moment because some of those other trade flows that I've spoken about. All right. Thanks a lot. There are no further questions at this time. I'll now hand back to Mr. Kerr for closing remarks. Look, thanks, everyone. I appreciate the time today. For us as an organization, I think it is a turning point in terms of the execution of our strategy. The announcement today of the investment in Taylor, I think is significant. And again, I'll come back to the position when it comes to what are you looking for in the resource industry? It is large, long life resource, in a good jurisdiction, well-positioned on the cost curve, that has multiple development options over many decades to generate returns for shareholders. And the most, if you like, basin with Taylor, Clark, Flux, Peak, et cetera, we think has that in space. For us, it also allows us to continue to transform that portfolio to get a greater exposure to commodities that we think are critical for the energy transformation, and because of the supply-demand fundamentals, we think the gap that exists will help create, you know, stronger pricing for longer as well. Well, thank you everyone for their time today, and we'll talk to you over the next couple of weeks. Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.