Good afternoon and welcome to our first half 2024 FD Pre-Close. Let me start by welcoming our CEO, Dr. Nombasa Tsengwa, who joins us online from London, Nijaba, together with our Chief Growth Officer, Mr. Richard Lilleike, and his senior leadership team. Let me welcome in the room our FD, Mr. Riaan Koppeschaar, and his leadership team. Our Chief Operations Officer, Mr. Kgabi Masia, and his leadership team. The team from the Investor Relations and Liaison Office. My name is Sonwabise Mzinyathi, and I'm the Acting Chief Investor Relations and Liaison Officer, and I'll be facilitating the call today. Let me start by reminding everyone to please stay muted. When we get to the Q&A session, should you have a question, our operator will help to call you in. We will then ask you to please just introduce yourself, just your full name and your organization, and then to mute yourself again, and we will respond to your question. This is just so we avoid any sound feedbacks and disturbances during the call. With that, let me hand over to our FD. Riaan, over to you. Thanks. Good morning, ladies and gentlemen. It's a pleasure to engage with you again. The purpose of our call this morning is to give you an update on the expected operational performance for the first six months of the year ending 30 June 2024, as well as an update on certain of the strategic matters in the group. Firstly, I'm going to take you through our safety performance that is very important to us. You will see as at the end of May, we have gone 21 months without a fatality in the group, but we have recorded four lost-time injuries resulting in a lost-time injury frequency rate of 0.06 against our target of 0.05. This is an improvement compared to last year. Also, last year for the same period, we recorded four high potential incidents, and this year we haven't reported any incidents. Although we've seen an improvement in the safety performance, to sustain this further, various safety initiatives have been deployed across all our business units. If we look at the markets, the expected prices for the benchmark API 4 price, it is expected that it will average about $101 compared to $112 for the second half of last year. On iron ore, the forecast is $117 compared to $121. Overall, definitely weaker or lower commodity prices during the six-month period. If we then look at our production and sales, Kgabi and the team will unpack that in more detail later on. You can see we forecast that the coal production will decrease by 14% and sales 12% as a result of lower offtake and demand, especially from Eskom at the Grootegeluk Mine. The coal capital expenditure, you will see we are still very much in line with the ZAR 2.5 billion that we forecast on an annual basis in real terms. For this six-month period compared to the second half of last year, we forecast a reduction of 33%, and it's mainly due to timing of CapEx related to our equipment replacement strategies and also certain of our license to operate projects. If we look at the wind generation from. We have a comment that one of our analysts can't hear us. I'm just checking, Dana, that you can hear us on the line. I can still hear you loud and clearly, ma'am. Okay. I'll get someone to assist. Thank you. Okay. Right. If we turn to the energy operations, we forecast that the output for the six-month period will be 325 GW hour. That is in line with the guidance that we gave in March. You will also recall that normally if we compare it now to the second half of 2023, the generation in the first half of the year is a bit lower, but we definitely expect it to pick up in the second half of the year. The construction of the Lephalale Solar Project is progressing well, and we still expect that the project will reach completion in the first half of 2024. If we look at the balance sheet, you can see there the balance sheet still remains very strong. It puts us in a good position to embark on our growth strategy. At the end of May, we were sitting off cash of ZAR 15.3 billion, excluding the Cennergi project financing. Concerning our portfolio optimization, as we communicated to the market, we have embarked on a sales process for the ferroalloy business. That process is progressing very well, and we expect to conclude a sale and purchase agreement on that asset by the fourth quarter of this year. I think that is a broad update on the operational performance and some of these key strategic matters. Kgabi, I will hand over to you if you want to unpack the numbers in further detail. Okay. No, thanks a lot, Riaan. Maybe before I start with production and sales, I'll ask Lilleike to cover the markets. Thank you, Kgabi. Yeah, I think if we start off with the domestic markets, fairly stable demand. We do see in the normal thermal coal domestic sized market some pressure on customers due to huge input cost inflation and also interest rates having a bearing. We definitely see customers more under pressure in the domestic market, but our demand is still very stable. Pricing has become a bit more challenging given also international pricing that has come down. Definitely a bit of pressure on pricing domestically, but otherwise good. Eskom demand, we will cover, I think, later when we come to that detail. We are seeing a bit of an improvement from the first quarter there, so we are hopeful that that will improve. ArcelorMittal, things are looking a bit better for us. Also a bit of a sluggish start to the year, but not looking we're quite hopeful towards the rest of the year. If I can then move over to the international side, I think from a supply side, the supply that was a bit challenged in the six months, not hugely so, was Colombia and of course South African with our rail problems. We also saw some impacts from the Russian supply in the face of both logistics challenges to the east, but also the impact that Western sanctions on SUEK had on the country's supply. Definitely some impacts there. We are aware of more and more of your Northeast Asian countries that is moving away from Russian coal, or at least reduce the size of Russian coal in the consumption. Having an impact there. From a demand perspective internationally, Europe demand quite weak. We continue to see Europe back to the previous plan of reducing coal-fired generation. About 15 coal-fired power stations have been either shut down or closed in the six-month period. Europe is back to the strategic plan of reducing the dependency on coal, assisted by very low gas prices as well as very good renewables production to make that possible. In the east, Japan and Korea, both of them having fairly good high levels of inventory and reduced levels of burning coal. In South Korea, mostly because of their drive towards gas. In Japan, mostly because of their drive towards higher levels of nuclear again on that side. I think the two positive points for us on the international side that helped with overall demand was India with very good growth rates. The highest coal-fired power generation ever in this past six months in India. Really good on electricity demand, good on coal-fired generation, in spite of their very good local production of coal. They are on their way to come very close to their one billion tons of local coal production, but still their imports increased. A very good picture in India. The same actually in China, where in March reported that in 2023, China had a very good year in terms of imports for us as sellers. We actually had our doubts whether that will continue into 2024. The good news for the balance of the market is that China continued with very good imports, also in spite of good local production, but the imports actually then on the back of better economics from the imported coal than expensive domestic coal. That also looked good for us. Largely a balanced market currently. We do not see huge imbalances, and we think huge price impacts will be either due to some supply side or demand side shocks in the system, but currently a fairly well-balanced market. Thanks, Kgabi. Thank you, Sakie. I'll then touch on the production and sales. Starting with production, our production is expected to decrease by 14% at Grootegeluk. This is mainly due to the latest Eskom internal plans. What we've seen in Q1, it was very challenging, but Q2 is promising. I can say that last month, actually, it was the first time that we made a budget supplying into Eskom. That is how we're looking at the latest plans, how they're going to pan out. If I move into the metallurgical coal production, the production is expected to remain within the 2% of what we previously guided. This is aligned with the market demand, as Sakie has explained, and the logistics availability. Then coming to the mine, our Matla Colliery, the production and sales, both of them are expected to decrease by 1% in line with the end of the Mine 2 shortwall, which was a historic moment for us because it was the only remaining shortwall in the country. We are now transitioning to establish Mine 1 Project where we have received the full capital to conclude that project. If I then move to the sales front of things, the Eskom sales are expected to decrease by 12%. This is linked to what I have explained before, the internal Eskom plans, their maintenance and production plans. On the domestic and thermal coal sales, we are expected to decrease by 54% based on the direction of the domestic sales into the export market, and mainly at our Mpumalanga mines. We will see that we're now expecting to increase our export sales by 23%. This is enabled by moving sales through alternative export channels. These channels, as we previously stated, we continue to optimize them, and we're moving most of the coal from our Belfast operation. Our total expected sales remain within 1% of the guidance which we've provided previously. If I move to CapEx, which Kgabi has touched on, our CapEx is expected to decrease by 33%. This is in line with our Capital Excellence Program. This is mainly linked to the timing of the equipment replacement strategy and the license to operate projects at Grootegeluk and Mpumalanga mines. If I move to logistics, I'll just touch on a high level first on Transnet. You can talk about the National Logistics Crisis Committee, which has been put in place. We can see that the reforms are already happening. Although yes, we'll talk about the numbers, what are they saying. What is important is that we have now structures in place, how we work with Transnet as the industry, and what support and how both industries are already working, and there's good collaboration. Also, the appointment of Michelle and Russell has been quite good. I mean, we're engaging them quite frequently, and we've also seen their availability. I mean, last week, they were also visiting us here at the Exxaro offices. For us, it is the first time that we've seen the leadership being available to us as an industry, and it's quite encouraging. However, we've experienced three derailments this year that has resulted in an annualized rate of 46.75 million tons. As an example, we've performed better in that regard. The challenges of Transnet remain with us, but we know where the issues are. What has been positive, which I'd like to state, is that we've completed an assessment of the lines together with Transnet. This was the first time that this was allowed to happen where the industry is part of that network, the assessment of the line. This can then tell us what are the main issues with the line, which we can then further focus on. I'll then pause there. Thanks. Okay. Probably we can hand over for Q&A. All right. Before we go to Q&A, I failed to recognize our EMD Energy, Leon Groenewald, welcome. Can you please just take us through whose hands are up and who's put their hand up to ask questions? Of course. Ladies and gentlemen, for those on the conference call, if you would like to ask a question, please press star and then one now. If you decide to withdraw your question, please press star and then two. Again, if you would like to ask a question, please press star and then one now. The first question we have comes from Tim Clark of SBG Securities. Please go ahead. Thank you. Thanks very much. I've got a few questions. Kgabi, can we just talk about this line assessment in a little bit more detail? Can you give us anything on the findings or the timing or just how the process is going to run? We heard from you that it was sort of towards the middle of the year that the line assessment would be complete. I'm just really interested in what the next stage is. I have two more questions on coal production. The first one at Kgabi Masia. What happened there? Is it Medupi or Matimba that was really bad in the first quarter? Where did the sort of loss of offtake come from? It looks like you're probably quite close to your minimum contractual relationship or offtake, is that right? Around about 12.3 million tons, if I've got the right number for the first half. And then my last question is just on alternative extraction of coal. Is the move out of domestic and into exports getting more stuff on the line near Belfast? Is that how I should translate that? Because it looks like I mean, sometimes you call exports where you sell to a trader, you guys call it domestic. Is it a sort of taking away from trucking, or is it reallocation onto the rail line? Because your export number looks good, but your domestic number is obviously a bit lower. Thank you. Thank you. I've noted the question. I'll start with the line assessment question. The line assessment, we had what we call an ESG, where the industry participates, all the mining houses. From that meeting, which occurred actually three weeks back, the line assessment results will be made available to us. July is what we're promising in that meeting. From there, and also the information coming from there, it will build into the July charts. For us, that is the information we have. What is important is that at least that has happened because it took a while for Transnet to allow from the previous regime. That information will be made available to us. Just to understand that a little bit more, the line assessment, is it going to be a sort of a medium-long-term plan of what it takes to get this line back to operational kind of excellence? Or is it more short-term kind of signaling issues, etc., that can be sorted out in the shutdown? Yes. Looking at actually medium to long term, as a team, as actually I looked at the short-term issues, I mean, the issues of signals, we know about it. The line for us, it was quite important from the line from office all the way into Richards Bay. For us, I think, yes, it is both medium, but actually majority is medium to long term. The immediate issues are being understood, and we are sorting them out where we can as an industry. Maybe just to come in the team also, just to support the question, do we know what should be the what would look different after this assessment is done? I guess can somebody just summarize for us between you and Sakkie and Kgabi? Yeah. Thank you, Nombasa. What will look different is that now you know what are the issues because initially, we were more on the short term. The line assessment allows us to understand what are the main major focus areas which we need to look at. That will be different. In terms of if one looks at next year's chart or if there must be some chart, then it will be more informed from a planning and execution point of view. Thanks, Tim. Any other questions, Vinay? There were a couple of questions. Sakie, you want to add something else? Okay. The other questions were around Eskom, Matimba, and Medupi. What we've seen, good performance coming from Matimba. The challenge remains at Medupi, but it's not on the unit themselves. The challenge is on the line feeding the station. Your stacker is limited, your conveyors. That is what the team is focusing on resolving. Also, as we know, in August, we're expecting a unit to come back. That will also assist in terms of delivery of coal into the station. The other question, Sakie, it was around the alternative channels. Maybe if you can answer that one. Yeah. Tim, you're on the domestic versus alternative. You may recall that we've previously reported that we are constrained as far as port capacity is concerned. Therefore, as much as we could truck without port capacity, we could not export that product ourselves. We were forced into a situation where we had to sell to other people that had port capacity. That is what we called our FCA sales. The plan was always for us to have more control over that. We are now in a position where we do have access to more port capacity. That is why you will see that swing from domestic because that FCA sales that we did and still doing a bit of, that reports as you sell it here domestically to someone, it reports as a domestic sale. You will see a huge reduction in domestic sales because that was now swung to the export sales through alternative ports. Okay. That makes sense. Thank you, Sakkie. Great. Thank you, Tim. Thank you. The next question we have comes from Brian Morgan of RMB Morgan Stanley. Please go ahead. Hi guys. Thanks very much for the time. Can we just ask on price realizations, how you saw them for the half or seeing them for the half? Also, just on that last point around the FCA mix, how would we expect price realizations to evolve as you take more volume away from domestic and put it into the export line? Yeah. Brian, thank you for the question. I think in line with previous guidance at this stage, in the FD Pre-Close, we are not giving cost or price performance information through. As I indicated previously, the more you shift the ratio from RBCT to the alternative port, you will come under pressure in your price realization because your opportunity for sales mix optimization is not there yet. We are working on that, optimizing that situation as well. We definitely will see a little bit of an impact, which hopefully towards the end of the year, we also can come in a position where we have more of that sales mix optimization opportunities in some of the alternative ports. I do not at this stage see material impact. As I've indicated before, there will be pressure on that number the more you have to run to alternative ports to get the product out. Okay. Thanks, Sakie. Can I then ask on the cash balance, quite a number, about ZAR 15 billion around end of May, is it fair to assume that provisional tax and royalties offsets whatever cash flow you might generate in June? That ZAR 15 billion should be sort of a good number for the end of June? Yeah, I suppose so. On that ground, can we just chat then what you guys are thinking at this stage about dividends? Look, it's probably too early for us to talk about special dividends. We've got the normal dividend policy. What we told the market is that cash balance we earmarked to retain ZAR 12 billion-ZAR 15 billion. Obviously, depending on where that actual balance is in August, the board will then decide, apart from the special dividend, is there room for special distribution to shareholders. I think at this stage, it's probably a bit too early to say. Okay. Thanks, Riaan. That's all from me. Thanks, Brian. Thank you. Ladies and gentlemen, just a reminder, if you would like to ask a question, please press star and then one now. The next question that we have comes from Shashi Shekhar of Citi. Please go ahead. Hi, good afternoon, and thank you very much for this opportunity. I have a couple of questions. First one is on the guidance which you guys upgraded today. I mean, the new guidance now implies roughly 20% higher production and sales in the second half of this year compared to the first half. I just wanted to know how confident are you in achieving this target? My second question is on your growth strategy. Could you please provide some update on the progress of your strategy? I mean, given the copper assets across the globe are currently pricing in over $11,000 per ton of copper price. Are you also interested in buying some assets which are up for sale by Anglo? The first question on the confidence on guidance, if I start with the production impact which we've explained, on the Eskom front, we had a very challenging Q1 at supplying into both Matimba and Medupi. What we've seen in Q2, we've seen an improvement. For us, then we're quite comfortable with that. Also what I mentioned was that there's a unit coming in August back, which is also supporting the sales. I mean, if the sales are improving, then our production will also follow. On the growth side, it's Richard Lilleike here. Thanks for the question. I think our investment criteria across all transition metals remains fundamentally unchanged. We take into account where commodity prices are currently trading, as well as endless consensus of long-term pricing. Within that, we look at returns and return on equity on any investment. Copper remains fundamental to us as well as many other mining companies. We'll certainly take into account pricing when we look at those opportunities. In terms of what we can do to mitigate that, we are exploring partnership opportunities as well as looking at investments through the cycle of the commodity and what is the appropriate stage to enter. We are cognizant of your question and are looking at strategies in order to maximize returns on any investment. In terms of the Anglo question, right now, we are not evaluating any assets that Anglo may or may not be selling that we're aware of. There is obviously the Metco business in Australia that they've announced publicly that they will be exiting. We will review our options under the Moranbah South Joint Venture Agreements as and when any offers are made. Okay. Thank you very much for your responses. Thank you, sir. Thank you. Ladies and gentlemen, just a final reminder, if you would like to ask a question, please press star and then one now. We have a follow-up question from Brian Morgan of RMB Morgan Stanley. Please go ahead, sir. Thanks very much. Can I just ask? You've spoken about the railway line between Oryx and Richards Bay. From Oryx North, how's the performance been on the line? It's been hit by a lot of cable theft. How's that progressed? Could you just give us an update on operations there? Yeah. We actually had one of the better six-month periods on the Waterberg line between, let's say, Oryx and Lephalale. You will remember historically, we've always complained that the Waterberg line is totally underperforming to that of what's happening in Mpumalanga. This six months, we actually had quite a—it's not where it should be, but quite an improvement on the previous half and quite encouraging also the discussions we have with TFR on improving performance there. Yeah, glad to report that it's going a bit better. Definitely impacted by security-related matters, but also definitely seeing an improvement there. Okay. That's great. And then last one, just relating to the previous question, do you guys have any preemptives on Moranbah South? We can talk to it. Oh, okay. We are currently looking at the agreements, all our contractual rights. It's probably premature for us to disclose whatever rights we have. Cool. Thanks. Thanks, Brian. Anyone else, Vinay? At this stage, there are no further questions, ma'am. Okay. Okay. I think if there's no further questions, ladies and gentlemen, thanks for your interest in the FD Pre-Close, also for the questions that were posed. We look forward to announce our results on the 15th of August. 15th of August. We'll see you on the 15th of August. All the best. Thank you very much, everyone. Thank you, Sophie and team, bye. Thank you. Thank you. Bye-bye. Thank you. Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your lines.