Okay, ladies and gentlemen, and welcome to the Exxaro Resources NFD Pre-Class Conference. All participants will be in listen-only mode, and there will be an opportunity to ask questions later during the call. If you should need assistance during the call, please signal an operator by pressing star and then zero. Please also note that this event is being recorded. I will now hand over to the Chief Investor Relations and Liaison Officer, Ling-Ling Mothapo. Please go ahead. Thank you very much, Chris. Good morning, everyone, and a very warm welcome to you. Good afternoon, everyone. A very warm welcome to our NFD Pre-Class today, where we look forward to sharing with you just a brief overview on how our core operations have performed, and also touching base on a few other items as well, where you have an opportunity to engage with our management team. On the line, I am joined by our CEO, Dr. Nombasa Tsengwa, our FD, Riaan Koppeschaar, the Chief Coal Operations Officer, Kgabi Masia, Richard Lilleike, who is the Chief Growth Officer, Risila Mvasa, the Technical Assistant to the CEO. In the room, I'm also joined by Leon Groenewald, who's the MD Minerals, Sakkie Swanepoel on the logistics side supporting the core business, Mellis. Walker, who is the CFO of the core business, Mvuleni Qhena, the Growth Manager on the growth side, Charmaine Miller, and Lingang Mkhondo, also supporting finance. I will now hand over to our FG to do the introduction and welcome. Thanks, Ling-Ling. Good afternoon, ladies and gentlemen. It's a pleasure to invite you here again. The purpose of the call is to give you a brief overview of the expected production, sales, and CapEx forecast for the core business for financial year 2023. Also, just to give you a brief update on markets if there are questions, and also the performance of the energy business. As we normally do, first on the agenda is safety. Safety is obviously very important to us, but I also want to start off by expressing our heartfelt condolences to the families, the employees, and colleagues impacted by the tragic loss of life and injuries occurring at the Impala operations earlier this week. You are definitely in our thoughts. If we then come back to the Exxaro operations, up until the end of October, we've recorded eight lost-time injuries. Our lost-time injury frequency rate is sitting at 0.06 against our target of 0.05. This is a bit of a regression on performance, but various safety initiatives are afoot at all our operations to improve our safety performance. If we then briefly look at core production compared to 2022, you will see that the core production, excluding third-party buy-ins, is flat, and on sales volumes, we expect a decrease of about 2%. In terms of the capital allocation program, the CapEx on the core business, you will see there is an increase of about 57%, mainly driven by higher spend at Grootegeluk and Belfast, which the core team will elaborate on later. Also, on the energy side, I think there is a bit of good news there. You would have recalled that 2022, we experienced very low wind conditions. The wind conditions did improve in 2023, and as you can see, we expect higher generation from the two Cennergi wind farms during 2023. Also, the Lephalale solar project has reached financial close. Two weeks ago, we had the sod-turning ceremony. That construction is taking place, and we expect by the first quarter of 2025 for that operation to come on stream. If we then also look at our cash balance, the cash balance at the end of October was sitting at about ZAR 13.5 billion, excluding the Cennergi project financing debt. As mentioned in August, we are earmarking to retain about ZAR 12 billion -ZAR 15 billion of cash for our acquisition strategy. I think that is just a brief overview of where we stand. We can now hand over to the core team to look in more detail at the detailed numbers. Thanks, Leon. I'll ask Sakkie to start with the markets, and I'll then take it over from there just to go to production. Sakkie? Thank you, Kgabi. Yeah, I think from the international side, we have seen a period of fairly strong demand out of both China and India. China continued to surprise on the upside. We hope for the second half of the year that the Chinese demand will cool down, but China is still applying production restrictions within the country on the account of safety, and we see that that is supporting the import side in the Chinese economy, which definitely helped with the additional supply that we've seen from both Australia and Indonesia in the Pacific. Those factors have balanced out each other. In Europe, we continue to see very soft demand. We also see that API 2 at times going below API 4, so the European mandate index going below the South African FOB index, also demonstrating very poor demand in the Atlantic. On the Russian side, as far as supply is concerned, we continue to see constraints going out to the eastern ports, and the Russian exports not as much as previously thought to be, and that with South Korean limitations on Russian imports also having impact there. What has helped us as South Africa, from a market perspective, as I said, is that the Pacific was fairly balanced, and in the Middle East, African markets, and Indian market, fairly strong demand. We could not complain about market pricing. You've seen it have gone to very low levels. Earlier in the year, it has picked up to about $150, and it has come down to current levels. If I look at the latest McKinsey report that I read this morning, just to see what they are saying now, I actually think that the coal prices might be in this order of $110-$120 up to 2025, their latest view, which is quite a surprise and a bit of upside on what we previously thought. In the domestic market, things are going well. We have stable uptake from normal domestic customers. We see a lot of pressure on what we call FCA sales of coal, so that's coal that we sell to other exporters that have capacity to export at some port or through some logistics. Due to the lower price of gold, as we previously indicated, most of that export through other ports has turned unprofitable, and therefore a lot of pressure in the domestic market with available gold, gold not going out to the export market, as we would have hoped. Generally, the domestic market is fairly stable, and in our markets, we see stable uptake, so not a concern there. I think I can stop there, Kgabi. Okay. Thanks, Sakkie. I'll then move into production. If I look at our business, I'll say that our business is resilient. If one listens to what is happening out there in the market, there's a talk of continuing production. That is not what we're seeing. For us, we are seeing a very steady production performance by the team. The overall production is expected to increase by 2%, and the thermal coal production from the Waterberg is expected to remain in line with the previous guidance. What is encouraging is that we're expecting a 14% increase against the previous guidance in our Mpumalanga commercial mines. Last year, we came in from a disappointing incident where we had a fatal fatality at Belfast, but the team at Belfast has done very well. Majority of that contribution to that 14% comes from Belfast, and also Leeuwpan and Mpumalanga. What also assisted us in terms of production is how the team has looked at how do we optimize logistics. We need to give credit—I mean, I know there's a bigger conversation about Transnet, such data, but if I look at what our Mvuleni has performed, it has performed better in terms of optimizing and allowing us to schedule and hence that production impact we're seeing from both Leeuwpan and Mvuleni. Also, as Sakkie has alluded to, we've placed some of the product into the domestic market. If I move to the Matla coal production, that was our major challenge. The biggest contributor remains poor rail performance. From a coal buying point, we expected to be in line with the previous guidance. On the sales side, the domestic thermal sales are expected to remain in line with the previous market guidance in the Waterberg region. The Mvuleni domestic thermal coal also has done well, where we are expecting an increase of 19%. That is also attributed to what the team has done in terms of placing material into the domestic market. The export product is also expected to increase by 6%. I mean, the sales of export which the team is doing in terms of optimizing logistics. Increased export sales are planned at Mvuleni and Leeuwpan, and offset by decreased export sales at Belfast. The sales at Belfast are being placed into the domestic market. Overall, our export sales are expected to decrease by 2% in financial year 2023 compared to financial year 2022. The biggest contributor is the rail performance, which has been challenging at Grootegeluk. The Mosselika coal sales are expected to be in line with the previous guidance. With regards to Masa, the coal production and sales are both expected to be in line with the previous guidance. Later on, I'll ask Nombasa to touch on Transnet. However, I'll say with Transnet, the performance has been poor. If we look at the year-to-date ending October, Transnet has railed just shy of 40 million tons. If we analyze the current performance, we'll at most do just above 47 million tons. The biggest impact for us is Grootegeluk, where we are only averaging three trains per week. The challenges there are issues of security, vandalism, and locomotive shortages. The Mvuleni rail performance has been better. We've seen eight trains per week for the same period. Even though the coal export industry has supported Transnet, it's probably Nombasa, I don't know if you maybe if you go later on, you want to touch it later. When we finish, maybe I'll ask just Nombasa to maybe we talk about Transnet and what is happening in that regard. I think for me, I've covered everything. Thanks. Yeah. Ling-Ling, can you join in? Yes, we can. CEO. Good afternoon, everybody. Let me join Kgabi in welcoming you earlier. Really, thanks for you taking your time, as always, to listen to us. Indeed, challenging times. The biggest challenge, as you know, that is really keeping us busy, is Transnet. We have tried as a team to really dedicate time, myself, within the Minerals Council as the office bearer, and obviously as the CEO of this company, to get closer to this conversation, especially with the newly formed board. We have picked up interest from this board, which was appointed on the 11th of July, interest to engage us as the market and key stakeholders. They have also prioritized engaging the National Crisis Committee on Logistics and Rail, which is led by Mxolisi Mgojo, our former CEO. Their task, as you know, has been to put together a national turnaround strategy for rail, especially on Transnet Freight Rail matters as it pertains to the challenges that we're talking about. This recovery plan had been based on a few challenges, which I will mention to you, but they had to deliver this plan and had it approved by the 14th of October. I give you this date because I am noticing the sense of urgency that is creeping in. When they spoke to us the first time we engaged them, it was still early days, and I also sat in one meeting this morning where we engaged the chairman. This morning's meeting comes on the back of several meetings we've had as the leads of the Minerals Council South Africa with the Minister of Finance, where we were pushing clarity on issues or scenarios they foresee on this concessioning, which was very welcome by the Minister of Finance to say they do not have any other plan but to accept that the industry needs to have a much more structured investment into Transnet because the fiscus cannot clear the debt minimum. The leads of the different areas, we've got the leader in the coal line. We have leads in chrome, manganese, and also iron ore. July Ndlovu is leading us on the coal side, and he's really been engaging quite earnestly on these scenarios and what we believe would work for the coal line. Suffice to say that the chairman today brought in the Acting Chief Executive of Transnet Freight Rail, Mr. Russell Batyi. He also brought in the CEO of TPT, which is Mr. Jabulani Mdaki, to really give us clear feedback on this turnaround. For me, what was quite interesting on everything they've mentioned is just the fact that for the first time, I hear that there is acceptance that Transnet has operated without a high performance culture. It then says that they need to focus on people and how to engage people to deliver. They have said this before, but they are agreeing today that they've got outdated technologies. They have also acknowledged that they've got inherent inefficiencies that they could leverage and go back to basics to improve. All of these have really impacted their income statement. They also share a lot of issues on the balance sheet side, and we all know that they don't have a fit-for-purpose asset base or asset base that can actually deliver on a revenue basis. The board told us this morning that they take full ownership and they seek our support, and also that these challenges have been coming a long way, and there's no way that they are going to solve these issues offline. I'm picking up some feedback, Ling-Ling. I don't know who needs to mute. Okay. She wants one on side. Okay. In any case, what also came up today for me that was quite surprising, which we're hearing for the first time, that they acknowledge that there's backlog in as far as a significant backlog on maintenance. The fact that they need to make sure that this maintenance is taken care of. They had some agreements on the diesels, which they've just concluded, but these are diesels. It's not the Chinese leg of the challenges these guys have had. There's the procurement issues, and fortunately, it seems as if the National Crisis Committee has actually taken responsibility to deal with procurement issues with them. The infrastructure on the coal side, it seems as if they've got new assessments, which are technical assessments, to talk to the state of these different corridors. They have already finished the north-west corridor assessments, which is being looked at to see what must be done. They are looking at security issues at that level as well. As I said, really going back to basics and operations right across is what they are looking at. They are also looking at a digital planning system. Apparently, they have been using this manual planning system that also is causing inefficiencies, and they have found a similar technology that we use in our mines, which is the ops centers, which are digitalized, and that is what they are looking at. As I said, they are also investing time on people. I won't get too much into detail except to say that on the policy side, the report we were given was that, yes, we've just appointed infrastructure managers from the government side, but this one is mainly to access, or sorry, to enable government to access third-party players. That is, investors would like to come now and put in the locals or any kind of capital to make sure that we are able to move from a concessioning point of view. They are putting that in place. They are also wanting to look at the charges. What would be the charges for access to rail? This is what the infrastructure manager is going to be doing at this point in time. That will also be done by regularly engaging us as the industry. I'm going to leave it at this for now, but to say that it looks as if there is some responsibility being taken with some clarity and transparency on reporting on what has been achieved. I'll stop at this. Thank you, Kgabi and Riaan. Thank you. I think Leon then can come in to cover the energy operations. Afternoon. Like Julian said, certainly from an energy generation perspective, we're much better off than last year. We've seen that although there's still some volatility from a month-to-month perspective, the generation levels are up to normalized levels. That is including an Eskom grid fault which occurred earlier in the year, which has been resolved, but it's a force majeure event. Taking that into account, we would have exceeded normalized levels of production. We're happy with the equipment. They're performing above contracted availability levels. On the growth side, as Julian said, we're full steam ahead with the construction of the Lephalale solar project. It's still early days in the construction because it was site clearing. We'll start the part construction early next year and to be in operation early in 2025. All indications are that we're still on track in terms of time and in terms of cost. I'll stop there. Thank you. Okay. Thank you. On the capital allocation, maybe probably before you get into the numbers, I mean, last year, we did talk about the Capital Excellence and what we're doing in that regard. Probably maybe we'll start from then. Maybe then we can get into the capital allocation conversation then. Okay. Thanks, Kgabi. Good afternoon, everybody. We now transition into our sustained business and sustaining capital program and strategy, as Kgabi has mentioned. We gave the guidance around the ZAR 2.5 billion per year in real terms is what we're going to be spending. We are well within those numbers, the ZAR 2.5 billion projected for 2023. The increase that we're talking about from the August guidance to the guidance we're giving now is ZAR 100 million. It is a very deliberate addition and timing around our trucks and replacement thereof. That is essentially the difference why there is an increase of just over ZAR 100 million between the August guidance and this guidance that we're giving now. We are well within our program, well within the equipment replacement strategy that we're driving. We are very comfortable with the numbers that we are putting forward and the rhythm that the Capital Excellence program is actually bringing to the business, the discipline around the different teams that we drive, and the progress that we have made. We are essentially getting to the end of the program this year, and next year, we will be spending time embedding it. After that, it will be part of our normal way of doing business. Thanks very much. Thanks, Kobbi. Ling-Ling, I think we can probably then take questions. Thank you very much, Riaan. Thank you for that overview on the business. Chris, I'd like to invite you to assist us with any questions we may have on the line. Thank you very much. There is an incident on the conference call. If you do wish to ask a question, please press Star and then 1 on the touch-tone phone or on the keypad on your screen. You will hear a confirmation tone that you have joined the queue. If you wish to withdraw your question, you may press Star and then 2 to remove yourself from the list. Again, if you wish to ask a question, please press star and then one. Our first question is from Nkateko Mathonsi asking NASDAQ. Please go ahead. Good afternoon. My question is actually more for numbers around Transnet. What is your sense on how long we could see and how long it could take before we see some difference on Transnet? I mean, people issues and equipment that has been starved of CapEx can often take a bit longer to resolve. I just want to get a feel from you in terms of how long that could take. Is it a year, is it two years, or three years? Thank you very much for the feedback in terms of there's a bit of a sense of urgency as far as the new board is concerned. I also have a question on the cash retention, the guidance that you will retain between ZAR 12 billion and ZAR 15 billion. How should we think about where you land? Is it the lower end or higher end of guidance? Those are my two questions. Thank you. Should I come in, Ling-Ling? Yes, please, CEO. Thank you very much, Nkateko, for that question. Very important question, which actually we've been engaging them with. Let's prioritize first them putting together a credible executive, as they communicated today with their first authority one in terms of target was end of this month, sorry, end of December. The latest they foresee for the last executive to join would be end of February. That's what they gave us this morning, which says to me that the acting individuals will continue to execute this plan. When the new CEO comes, I doubt that CEO will really have much room to create new things. That CEO would have to really go into execution mode because this is obviously vetted from a government level, that is. In terms of the diesels, which were required, those it seems as if they should be within the next six months because they had a diesel agreement which has been concluded. I am not quite sure from a specific point of view in Kgogo, in terms of which line these diesels are going to impact, but it seems as if they would be able to release the diesels. The engagement they have with the Chinese, they did mention today that they're happy with the coal support on enabling the Chinese impasse, which they said that within the next six months, they would be able to announce something around that impasse with the Chinese. Yes, we have helped them, but I'm not able to share how that help is because I am not mandated to do so. This is led by the Minerals Council, but we have committed to help them specifically. They claim that that would then come into play in the next six months from concluding. In terms of when we start seeing improvement in locals, if the June date materializes, it should start flowing, as they said, we should see that in the third quarter of 2024. Other issues of maintenance and efficiencies, the deadline they gave us was that we should be able to start seeing some improvements. They started mentioning improvements on the iron ore line and also on the chrome line. On the coal line, also, they've given us three months to start feeling the impact. On big things in terms of buying locals, in terms of engaging the industry, I thought what was the date? 2024 September, I think that's what they said when they would have some solid proposals on the start of those concessions. The next one. Yeah. Just on the cash retention, the ZAR 12 billion-ZAR 15 billion, I think at this stage, we cannot now really comment on whether we will be at the lower or higher end of the range. That is obviously the board's prerogative when we take our results in March to the board. That will then be informed by the operating environment at that point in time. As pointed out, possible growth opportunities that we could pursue. Thank you very much, Eddie. Thank you. Chris? Thank you. Thanks. Thank you very much. The next question is from Sven Forssman of Kela Securities. Please go ahead. Yes. Good morning. Thank you for your time. We have this more demand for rail maintenance from FMX at their pre-close presentation just recently. They were telling us that. I know that at one stage, I mean, it was probably about six months ago when I attended one of your presentations, you guys were expecting quite big tonnage from Transnet coming through. Now that your target's almost being postponed a little bit until the end of next year, 47 million tonnes this year, would you expect around about 60 million tonnes by the end of next year? Sure. Yeah. Look, this is why we always are at pains really to represent Transnet on the basis of what they tell us. Suffice to say that if this deadline of next year of concluding with the Chinese by June, I do not think that they would get everything sorted out in that last six months of the year. We probably will see some of those tonnes coming back. In terms of how much, I really won't lie to you. It's very difficult to say. We are only hoping that if they do, within the next three months or so, resolve the issues even earlier than the end of June, we should be able to see more coming in because really the rolling stock has been one of the key problems in as far as improving the tons. Maintenance is an issue of availability of cash to do this. As far as I have heard, I did not pick up that they're going to need any help necessarily directly on this one. They're engaging government in this regard. Excellent. Thank you very much. Thank you very much, CEO. Chris? Thank you. The next question is from Tim Clark of SBG. Please go ahead. Hi, thank you. Just a couple of questions from me. The first one is just this rail kind of performance has been disappointing for quite some time. You're set up for quite high volume. I just wonder if you could comment at the margin as to what you're doing with costs and controlling costs and sort of aligning your costs to a sort of certain level of volume. Things are taking longer. The second one is we've had some recent deal announcements, Kamakawa and others. I wonder if you could comment on your experience of looking for these future materials and how your experience is evolving and what you're thinking about at the moment. Thank you very much. Thanks. Leon. Maybe let it start with the first one. Thanks, Tim. We are always a pertinent question, especially when the volumes are constrained. We did give the indication at half year that we are structured to produce a certain number of tonnes. If you constrain around the volume opportunity that you have, the costs will be impacted. We still have diligent programs within our businesses to manage the costs. We do always take account of what the market forces are, what does it mean from a volume and a rhythm point of view in our businesses. Clearly, when you're not moving some of the tonnes like we've seen with Eskom around the second half volumes, you are going to have cost pressures. We have seen that inflation has dropped off a little bit in the second half compared to what we saw in the first half, but still working at making sure that the business is in a position to produce at the tonnages that they are currently kind of allowed to produce from a market demand point of view. Thank you very much, Leon. Kgabi? No. Richard is going to answer the question of what we see on the market. Yep. Hi, Tim. Yes, we made the same announcements on Kamakawa. Strategically, that did fit a lot of what we were looking for. I understand a very competitive process. With all the assets and opportunities that we review, we will do so responsibly and ensure that any evaluation must be value creative to our business as well as shareholders. Therefore, we will not win every process that we participate in, but we will put our best foot forward as and when we find assets that meet our criteria. I think in the wake of Kamakawa and in you talking about other announcements, we certainly are seeing a lot of investment opportunities, mostly on the earlier stage capital raising. I think markets are quite tough right now. Therefore, our balance sheet stands out as a partner to new assets or assets under development. Right now, very busy, a lot of opportunities that we are looking at, and we'll continue to do so into the future. Is it fair then to thank you, Richard? Is it fair to say then that where you initially said that you wanted to be in a producing asset, you're moving a little bit more down the development curve given the balance sheet etc.? Is that the change? Because obviously, it's very difficult to get these assets, and especially good assets in the geographies is really hard, right? Without paying a fortune. Yep. That's not wrong. I don't think that the strategy has changed fundamentally. We are looking for producing assets. We are looking for assets that can add to our EBITDA line. That doesn't mean we're exclusive on producing assets. We do have a 2030 target as well. As part of that target, maybe earlier stage assets that can feed into that in due course. We are looking at a broad range of opportunities that make sense. Thank you very much. Thank you, Richard. Chris? Thank you. We have no further questions in the queue. I would now like to hand back to Ling-Ling to close out the call. Okay. No, thank you very much. Perhaps I can give over to our SG, Riaan, for final comments before we end the call. No, thanks very much, Ling-Ling. Also, thanks for attending the call. It's always appreciated to give you a bit of insight into our business. As pointed out, the results will come out on the 14th of March 2024. Then we will be able to obviously give you more color on the full year performance. Thanks very much for everybody attending. Thank you very much. That brings us to the conclusion of our SG pre-close. We look forward to seeing you next year when we announce our year-end results. Please feel free to send me through any questions if you may need further clarification. A good afternoon to you all. Thank you. Thank you. Thank you. Thank you. Bye-bye. Bye-bye. Thank you very much. Ladies and gentlemen, that concludes today's event. You may now disconnect your lines.