Q3 2025 Tronox Holdings PLC Earnings Call

What's the session begins.

Following the presentation, we will conduct the question and answer session.

This call is being recorded if you have any objections. Please disconnect at this time.

I would now like to turn the call over to Jennifer dumped a chief sustainability officer head of Investor Relations and external Affairs. Jennifer. Please go ahead.

Thank you.

Good morning, and welcome to our third quarter 2025 earnings call.

Today.

A friendly reminder, that comments made on this call and the information provided in our presentation on our website include certain statements that are forward looking and subject to various risks and uncertainties, including but not limited to the specific factors summarized in our SEC filings. This information represents our best judgment based on what we know today. However, actual results may vary.

Based on these risks and uncertainties the company undertakes no obligation to update or revise any forward looking statements.

During the conference call, we will refer to certain non U S. GAAP financial terms that we use in the management of our business and believe are useful to investors in evaluating the company's performance reconciliations to their nearest U S. GAAP terms are provided in our earnings release and in the appendix of the accompanying presentation. Additionally, please note that all financial comparisons made during the.

Call are on a year over year basis, unless otherwise noticed noted on the call today are John Romano, Chief Executive Officer, and John <unk>, Senior Vice President and Chief Financial Officer, you can find the slides we will be using on our website.

And it's now my pleasure to turn the call over to John Romano, John Thanks, Jennifer and good morning, everyone. We will begin this morning on slide four with some key messages from the quarter.

Our third quarter results were shaped by ongoing challenges associated with the weaker demand than forecasted downstream destocking above what we expected.

Competitive dynamics in both tier two and zircon markets.

While our competitors insolvency proceedings are expected to benefit tronox as future sales volumes, we saw a temporary headwind in the third quarter with more aggressive liquidation of inventory at below market pricing.

We have made headway on and securing tariffs against China Chinese dumping so late in the quarter, we encountered countered in unexpected hurdles in India. When a state court temporarily stayed anti dumping duties.

The zircon market also experienced headwinds beyond our expectations, particularly in China, where both pricing and volumes continued to face pressure.

In addition, we have a sizable shipment of zircon that rolled from Q3 to Q4 at the end of September.

We recognize the importance of safeguarding our cash flow and our cost improvement program is ahead of schedule. We are now on track to deliver in excess of $60 million in annualized savings by the end of 2025.

We expect to reach our $125 million to $175 million annualized savings goal by the end of 2026.

Separately, we are targeting targeted operational actions to manage near term cash flow.

These include the temporary idling of our <unk> pigment plant and adjustments that are stalling barrel pigment plant, where we lowered operating rates and are accelerating planned maintenance to align inventory with current market conditions at our in our Marquis Melter operation, we temporarily idled, one furnace and will soon initiate a temporary shutdown of our west mine. These.

Actions are intended to reduce inventory and enhanced cash flow supported by our new East Oss mine, which will begin commissioning in November 17th supplying higher grade heavy mineral concentrate into our network.

We will continue to assess further measures across mining pigment sites to ensure production remains closely aligned with prevailing market conditions.

Combined these initiatives are anticipated to generate an estimated cash benefit of approximately $25 million to $30 million in the fourth quarter positioning us for free cash flow in the fourth quarter and 2026 and on the commercial front, we're driving targeted initiatives to monetize inventory throughout our value chain.

Additionally, we strengthened our balance sheet by raising $400 million in senior secured notes boosting our available liquidity.

We are continuing to actively evaluate all available levers to generate cash reinforce our operational foundation and continue supporting our customers' strategic as a strategic global supplier.

Despite the unforeseen obstacles in the third quarter there are reasons for optimism.

Anti dumping measures continue to gradually improve our penetration and growth.

And growth.

Protected markets.

We're pleased that the Brazil finally.

Finalize their duties two weeks ago, increasing them significantly for major importers compared to provisional duties Likewise, Saudi Arabia have not implemented definitive anti dumping duties at rates comparable to the European Union and we expect India's duties to be reinstated in the near future.

Future.

Additionally, increased focus by the west on diversifying away from China, and rare Earths presents a unique opportunity for Tronox, our mining operations in Australia, and South Africa contain substantial amounts of monocyte, a rare earth mineral containing heavy and light rare earths, which can be processed for downstream use of permanent magnets where can.

<unk> to action on what we can control and influence reinforcing the business through our cost reduction and cash improvement actions and creating long term shareholder value.

I'll speak to these actions in more detail a little bit later in the call, but for now I'll turn the call over to John for a review of our financials in the quarter in more detail John Thank you John turning to slide five.

We generated revenue of $699 million, a decrease of 13% versus the prior year third quarter, driven by lower sales volumes and unfavorable pricing for both tio to zircon.

Operator: Participants will be in a listen-only mode until the question-and-answer session begins. Following the presentation, we will conduct the question-and-answer session. This call is being recorded. If you have any objections, please disconnect at this time. I would now like to turn the call over to Jennifer Gunther, Chief Sustainability Officer, Head of Investor Relations and External Affairs. Jennifer, please go ahead.

Speaker #1: And growth and penetration protected markets . We're pleased that the Brazil finally finalized their duties two weeks ago , increasing them significantly for major importers compared to provisional duties .

Also had lower sales of other products as compared to the prior year.

Loss from operations was $43 million in the quarter, and we reported a net loss attributable to tronox of $99 million, including $27 million of restructuring and other charges primarily related to the closure of bottleneck.

Speaker #1: Likewise , Saudi Arabia has now implemented definitive anti-dumping duties at rates comparable to the European Union . And we expect India's duties to be reinstated in the near future .

Jennifer Guenther: Thank you. Good morning and welcome to our third quarter 2025 earnings call. Today, a friendly reminder that comments made on this call and the information provided in our presentation and on our website include certain statements that are forward-looking and subject to various risks and uncertainties, including, but not limited to, the specific factors summarized in our SEC filings. This information represents our best judgment based on what we know today. However, actual results may vary based on these risks and uncertainties. The company undertakes no obligation to update or revise any forward-looking statements. During the conference call, we will refer to certain non-US GAAP financial terms that we use in the management of our business and believe are useful to investors in evaluating the company's performance. Reconciliations to their nearest US GAAP terms are provided in our earnings release and in the appendix of the accompanying presentation.

Speaker #1: Additionally , increased focus by the West on diversifying away from China and rare earths presents a unique opportunity for Tronox . Our mining operations and Australia and South Africa contain substantial amounts of monazite , a rare earth mineral containing heavy and light rare earths which can be processed for downstream use in permanent magnets .

While our loss before taxes $92 million or tax expense was $8 million in the quarter as we do not realized tax benefits in jurisdictions, where we are incurring losses.

Adjusted diluted earnings per share was a loss of <unk> 46.

Adjusted EBITDA in the quarter was $74 million and our adjusted EBITDA margin was 10, 6%.

Free cash flow was a use of $137 million, including $80 million of capital expenditures.

Speaker #1: We are continuing to action on what we can control and influence , reinforcing the business through our cost reduction and cash improvement actions , and creating long term shareholder value .

Now, let's move to the next slide for a review of our commercial performance.

As John covered earlier in the third quarter, we saw further demand weakness and heightened competition, putting pressure on <unk> and zircon sales.

Speaker #1: I'll speak to these actions in more detail a little bit later in the call , but for now , I'll turn the call over to John for a review of our financials in the quarter in more detail .

<unk> revenues decreased 11% versus the year ago quarter, driven by an 8% decrease in volumes and a 5% decline in average selling prices, partially offset by a 2% favorable exchange rate impact.

Speaker #1: John .

Speaker #2: Thank you . John . Turning to slide five . We generated revenue of $699 million , a decrease of 13% versus the prior year .

Speaker #2: Third quarter , driven by lower sales volumes and unfavorable pricing for both TiO2 and zircon . We also had lower sales of other products as compared to the prior year .

Sequentially <unk> sales declined 6% driven by a 4% decrease in volumes and a 3% decrease in price, partially offset by a favorable 1% exchange rate impact from the euro.

Jennifer Guenther: Additionally, please note that all financial comparisons made during the call are on a year-over-year basis unless otherwise noted. On the call today are John Romano, Chief Executive Officer, and John Srivisal, Senior Vice President and Chief Financial Officer. You can find the slides we will be using on our website. It is now my pleasure to turn the call over to John Romano. John?

Speaker #2: Loss from operations was 43 million in the quarter , and we reported a net loss attributable to Tronox of 99 million , including 27 million of restructuring and other charges , primarily related to the closure of Botlek .

Europe Middle East and North America saw a sharper seasonal declines in mid market weakness to stocking and competitive pressures.

Speaker #2: While our loss to for tax was 92 million , our tax expense was 8 million . In the quarter , as we do not realize , tax benefits in jurisdictions where we are incurring losses .

Latin America experienced typical seasonal uplift, although weaker than expected.

John Romano: Thanks, Jennifer, and good morning, everyone. We'll begin this morning on slide four with some key messages from the quarter. Our third quarter results were shaped by ongoing challenges associated with weaker demand than forecasted, downstream destocking above what we expected, and heightened competitive dynamics in both TiO2 and zircon markets. While our competitors' insolvency proceedings are expected to benefit Tronox's future sales volumes, we saw a temporary headwind in the third quarter with more aggressive liquidation of inventory at below-market pricing. We have made headway in securing tariffs against Chinese dumping, though late in the quarter we encountered an unexpected hurdle in India when a state court temporarily stayed anti-dumping duties. The zircon market also experienced headwinds beyond our expectations, particularly in China, where both pricing and volumes continued to face pressure.

Pacific growth was muted by competition and a temporary stay on India antidumping duties.

Speaker #2: Adjusted diluted earnings per share was a loss of $0.46 . EBITDA in the quarter was 74 million , and our adjusted EBITDA margin was 10.6% .

<unk> revenues decreased 20% compared to the prior year due to due to a 16% decrease in price, including mix and a 4% decline in volumes driven by continued demand weakness primarily in China.

Speaker #2: Free cash flow was a use of 137 million , including 80 million of capital expenditures . Now let's move to the next slide for a review of our commercial performance .

Sequentially Silicon revenues decreased 13% driven by a 7% decrease in volumes and a 6% decrease in price including mix.

Speaker #2: As John covered earlier in the third quarter , we saw further demand weakness in heightened competition , putting pressure on TiO2 and zircon sales .

Revenue from other products decreased 21% compared to the prior year due to higher sales volumes in the prior year.

Speaker #2: TiO2 revenues decreased 11% versus the year ago quarter , driven by an 8% decrease in volumes and a 5% decline in average selling prices , partially offset by a 2% favorable exchange rate .

Sequentially other revenue increased 18%, reflecting higher sales of pig iron and heavy mineral concentrate tailings in the third quarter.

Speaker #2: Impact . Sequentially , TiO2 sales Adjusted declined 6% , driven by a 4% decrease in volumes and a 3% decrease in price , partially offset by a favorable 1% exchange rate .

Turning to the next slide I will now review, our operating performance for the quarter.

Our adjusted EBITDA of $74 million represented a 48% decline year on year as a result of unfavorable commercial impacts higher freight costs and higher production costs, partially offset by exchange rate tailwind and SG&A savings.

John Romano: In addition, we had a sizable shipment of zircon that rolled from Q3 to Q4 at the end of September. We recognize the importance of safeguarding our cash flow, and our cost improvement program is ahead of schedule. We are now on track to deliver in excess of $60 million in annualized savings by the end of 2025, and expect to reach our $125 to $175 million annualized savings goal by the end of 2026. Separately, we have targeted operational actions to manage near-term cash flow. These include the temporary idling of our Fuzhou pigment plant, and adjustments at our Stallingborough pigment plant, where we lowered operating rates and are accelerating plant maintenance to align inventory with current market conditions. At our Namaqua smelter operation, we temporarily idled one furnace and will soon initiate a temporary shutdown of our West Mine.

Speaker #2: Impact from the euro . Europe , Middle East and North America saw sharper seasonal declines amid market weakness to stocking and competitive pressures .

Speaker #2: Latin America experienced typical seasonal uplift , although weaker than expected . While Asia growth was muted by competition and a temporary stay on India anti-dumping duties , zircon revenues decreased 20% compared to the prior year due to due to a 16% decrease in price , including mix , and a 4% decline in volumes driven by continued demand weakness , primarily in China .

Sequentially adjusted EBITDA declined, 20% unfavorable average selling prices, including mix lower sales volume of <unk> zircon higher production costs and unfavorable exchange rate impacts were partially offset by the sale of heavy mineral concentrator tailings and SG&A savings.

Production costs were unfavorable by $4 million compared to the prior year and $7 million unfavorable compared to Q2.

Speaker #2: Sequentially , zircon revenues decreased 13% , driven by a 7% decrease in volumes and a 6% decrease in price , including mix revenue from other products decreased 21% compared to the prior year due to higher sales volumes in the prior year .

Both were as a result of unfavorable LCM in Idaho facility adjustments due to lower pricing and higher costs from reduced operating rates.

These were partially offset by lower cost tons sold in the quarter as a result of the self help actions that we initiated with our sustainable cost improvement program.

John Romano: These actions are intended to reduce inventory and enhance cash flow, supported by our new East OFS Mine, which will begin commissioning 17 November 2025, supplying higher-grade heavy mineral concentrate into our network. We will continue to assess further measures across mining and pigment sites to ensure production remains closely aligned with prevailing market conditions. Combined, these initiatives are anticipated to generate an estimated cash benefit of approximately $25 to 30 million in the fourth quarter, positioning us for free cash flow in the fourth quarter and 2026. On the commercial front, we're driving targeted initiatives to monetize inventory throughout our value chain. Additionally, we strengthened our balance sheet by raising $400 million in senior secured notes, boosting our available liquidity. We are continuing to actively evaluate all available levers to generate cash, reinforce our operational foundation, and continue supporting our customers as a strategic global supplier.

Speaker #2: Sequentially , other revenue increased 18% , reflecting higher sales of pig iron and heavy mineral concentrate tailings . In the third quarter . Turning to the next slide .

Without these proactive actions the headwinds would have been more significant.

Turning to the next slide.

Speaker #2: I will now review our operating performance for the quarter . Our adjusted EBITDA of 74 million represented a 48% decline year on year .

As John mentioned earlier, we raised $400 million unsecured notes in the third quarter to enhance available liquidity repay borrowings under our revolving credit facilities.

Speaker #2: As a result of unfavorable commercial impacts, higher freight costs, and higher production costs, partially offset by exchange rate tailwinds and SG&A savings.

With that we ended the quarter with total debt of $3 2 billion and net debt of $3 8 billion.

Our net leverage ratio at the end of September was seven five times on a trailing 12 month basis.

Speaker #2: Sequentially , adjusted EBITDA declined 20% . Unfavorable average selling prices , including mix , lower sales volume of TiO2 and zircon , higher production costs , and unfavorable exchange rate impacts were partially offset by the sale of heavy mineral concentrate tailings and SG&A savings .

Our weighted average interest rate was cute in Q3 was approximately 6% and we maintain interest rate interest rate swaps, which had approximately 77% of our interest rates are fixed through 2028.

Importantly, our next significant debt maturity is not until 2029. We also do not have any financial covenants on our term loans or bonds. We do have one springing financial covenant on our U S revolver that we do not expect to trigger.

Speaker #2: Production costs were unfavorable by 4 million compared to the prior year , and 7 million unfavorable compared to Q2 . Both were a result of unfavorable LCM and idle facility adjustments due to lower pricing and higher costs from reduced operating rates .

Liquidity as of September 30 was $664 million, including $185 million in cash and cash equivalents that are well distributed across the globe and that we are able to move around with little to no frictional cost.

John Romano: Despite the unforeseen obstacles in the third quarter, there are reasons for optimism. Anti-dumping measures continue to gradually improve our penetration and growth in protected markets. We're pleased that Brazil finally finalized their duties two weeks ago, increasing them significantly for major importers compared to provisional duties. Likewise, Saudi Arabia has now implemented definitive anti-dumping duties at rates comparable to the European Union, and we expect India's duties to be reinstated in the near future. Additionally, increased focus by the West on diversifying away from China and rare earths presents a unique opportunity for Tronox. Our mining operations in Australia and South Africa contain substantial amounts of monazite, a rare earth mineral containing heavy and light rare earths, which can be processed for downstream use in permanent magnets.

Speaker #2: These were partially offset by lower cost tons sold in the quarter . As a result of the self-help actions that we initiated with our sustainable cost Improvement program .

Working capital was a use of approximately $55 million, excluding $30 million of restructuring payments related to the closure of our bottling site.

Speaker #2: Without these proactive actions , the headwinds would have been more significant . Turning to the next slide . As John mentioned earlier , we raised $400 million of secured notes in the third quarter to enhance available liquidity and repay borrowings under our revolving credit facilities .

This was due to the decrease in accounts payable driven by lower purchases and cash improvement actions and increase in accounts receivable.

Changes in inventories was a much slower source of cash than expected as a result of lower sales volumes.

Speaker #2: With that , we ended the quarter with total debt of 3.2 billion and net debt of 3.0 billion . Our net leverage ratio at the end of September was 7.5 times on a trailing 12 month basis .

Our capital expenditures totaled $80 million in the quarter with approximately 59% allocated to maintenance and safety and 41% almost exclusively dedicated to the mining extensions in South Africa to sustain our integrated cost advantage.

Speaker #2: Our weighted average interest rate was in Q3 was approximately 6% , and we maintained interest rates , interest rate swaps such as approximately 77% of our interest rates , are fixed through 2028 .

We returned 20 million to shareholders in the form of dividends paid in the third quarter. The Q4 dividend reflects the updated <unk> per share level.

John Romano: We are continuing to action on what we can control and influence, reinforcing the business through our cost reduction and cash improvement actions, and creating long-term shareholder value. I'll speak to these actions in more detail a little bit later in the call. For now, I'll turn the call over to John for a review of our financials in the quarter in more detail. John?

Speaker #2: Importantly , our next significant debt maturity is not until 2029 . We also do not have any financial covenants on our term loans or bonds .

I wanted to reaffirm our commitment to improving cash flow and optimizing working capital.

Speaker #2: We do have one springing financial covenant on our US revolver that we do not expect to trigger liquidity . As of September 30th , it was 664 million , including 185 million in cash and cash equivalents that are well distributed across the globe and that we are able to move around with little to no frictional cost .

We are implementing targeted actions to reduce inventory through lowering production rates across all areas of our operation.

And we continue to remain disciplined on crops around capital expenditure serves as illustrated that round our actions with the West mine.

John Srivisal: Thank you, John. Turning to slide five. We generated revenue of $699 million, a decrease of 13% versus the prior year third quarter, driven by lower sales volumes and unfavorable pricing for both TiO2 and zircon. We also had lower sales of other products as compared to the prior year. Loss from operations was $43 million in the quarter, and we reported a net loss attributable to Tronox of $99 million, including $27 million of restructuring and other charges, primarily related to the closure of Botlek. While our loss before tax was $92 million, our tax expense was $8 million in the quarter, as we do not realize tax benefits in jurisdictions where we are incurring losses. Adjusted diluted earnings per share was a loss of $0.46. Adjusted EBITDA in the quarter was $74 million, and our adjusted EBITDA margin was 10.6%.

I remain confident in our ability to weather this prolonged downturn.

With that I'll hand, it back to John to review these actions in more detail John Thanks, John So turning to slide nine.

Speaker #2: Working capital was the use of approximately 55 million , excluding 30 million of restructuring payments related to the closure of our bottling site .

As outlined at the starting of the call. We have seen a positive we have seen positive developments on anti dumping this year.

Speaker #2: This was due to the decrease in accounts payable driven by lower purchases and cash improvement actions , and increase in accounts receivable changes in inventories was a much lower source of cash than expected .

This slide summarize the monthly Chinese exports to the four key regions that finalized duties in 2025, while India's duties are currently stayed we have a high level of confidence that they will be reinstated in the near future.

Speaker #2: As a result of lower sales volumes , our capital expenditures totaled 80 million in the quarter , with approximately 59% allocated to maintenance and safety and 41% almost exclusively dedicated to the mining extensions in South Africa .

As the data shows the implementation of anti dumping duties has had a measurable and meaningful impact on Chinese imports and the EU, Brazil, and India, and we would expect to see this trend carrying into Saudi Arabia is the government's reinforce their commitment to local investment in sustainability.

Speaker #2: To sustain our integrated cost advantage , we returned 20 million to shareholders in the form of dividends paid in the third quarter . The Q4 dividend reflects the updated $0.05 per share level .

John Srivisal: Free cash flow was a use of $137 million, including $80 million of capital expenditures. Now let's move to the next slide for a review of our commercial performance. As John covered earlier, in the third quarter, we saw further demand weakness and heightened competition, putting pressure on TiO2 and zircon sales. TiO2 revenues decreased 11% versus the year-ago quarter, driven by an 8% decrease in volumes and a 5% decline in average selling prices, partially offset by a 2% favorable exchange rate impact. Sequentially, TiO2 sales declined 6%, driven by a 4% decrease in volumes and a 3% decrease in price, partially offset by a favorable 1% exchange rate impact from the euro. Europe, the Middle East, and North America saw sharper seasonal declines amid market weakness, destocking, and competitive pressures.

At the peak these market's imported a total of approximately 800000 tons of <unk> from China.

Speaker #2: I want to reaffirm our commitment to improving cash flow and optimizing working capital. We are implementing targeted actions to reduce inventory through lowering production rates across all areas of our operation, and we continue to exercise discipline around capital expenditures, as illustrated by our actions with the West Mine.

While we do not anticipate this figure to go to zero, we have and expect to continue to see a meaningful reduction in exports to these markets and share growth for tronox as.

As a reference the U S has had tariffs in place on Tio two since 2018, when the section 301 tariffs were put in place under President Trump's first admin.

Speaker #2: I remain confident in our ability to weather this prolonged downturn . With that , I'll hand it back to John to review these actions in more detail .

Administration.

Chinese exports to the region have remained consistently below 20000 metric tons per year in a market that consumes approximately 900000 metric tonnes.

Speaker #2: John .

Speaker #1: Thanks , John . So turning to slide nine . As outlined at the starting of the call , we have seen a positive .

Speaker #1: We have seen positive developments on anti-dumping this year . This slide summarized the monthly Chinese exports to the four key regions that finalized duties in 2025 , while India's duties are currently staid , we have a high level of confidence that they will be reinstated in the near future , as the data shows , the implementation of anti-dumping duties has had a measurable and meaningful impact on Chinese imports in the EU .

These developments are extremely positive for tronox, especially as the sole domestic producer in Brazil, and Saudi Arabia, and a significant participant in the EU and Indian markets as well as the U S market.

John Srivisal: Latin America experienced typical seasonal uplift, although weaker than expected, while Asia Pacific growth was muted by competition and a temporary stay on India anti-dumping duties. Zircon revenues decreased 20% compared to the prior year due to a 16% decrease in price, including mix, and a 4% decline in volumes, driven by continued demand weakness, primarily in China. Sequentially, zircon revenues decreased 13%, driven by a 7% decrease in volumes and a 6% decrease in price, including mix. Revenue from other products decreased 21% compared to the prior year due to higher sales volumes in the prior year. Sequentially, other revenue increased 18%, reflecting higher sales of pig iron and heavy mineral concentrate tailings in the third quarter. Turning to the next slide, I will now review our operating performance for the quarter.

Combining this with the industry's idled mining capacity and over $1 1 million tons of global Tio to supply that has been taken offline. Since 2023, the majority of which we believe is permanent the industry is ongoing undergoing a structural shift that supports a supply demand rebalance.

Speaker #1: Brazil and India , and we would expect to see this trend carry into Saudi Arabia as the governments reinforce their commitment to local investment and sustainability .

Speaker #1: At the peak , these markets imported a total of approximately 800,000 tonnes of TiO2 from China , while we do not anticipate this figure to go to zero , we have and expect to continue to see a meaningful reduction in exports to these markets and share growth for Tronox as a reference , the US has had tariffs in place on TiO2 since 2018 , when the section 301 tariffs were put in place under President Trump's first administration .

As the most vertically integrated <unk> producer Tronox is well positioned to capitalize on this opportunity created by the rebalancing of the market.

Turning to slide 10.

We remain actively engaged in advancing our rare Earths strategy.

With high concentrations of rare earth at our metal deposits and decades of expertise in mining and mineral processing, we're uniquely positioned to play a significant role across the value chain from mining to upgrading.

Speaker #1: Administration . Chinese export to the region have remained consistently below 20,000 metric tons per year , and a market that consumes approximately 900,000 metric tons .

We're already mining monazite in Australia, and South Africa, but our capabilities extend beyond mining.

John Srivisal: Our adjusted EBITDA of $74 million represented a 48% decline year-on-year as a result of unfavorable commercial impacts, higher freight costs, and higher production costs, partially offset by exchange rate tailwinds, and SG&A savings. Sequentially, adjusted EBITDA declined 20%. Unfavorable average selling prices, including mix, lower sales volume of TiO2 and zircon, higher production costs, and unfavorable exchange rate impacts were partially offset by the sale of heavy mineral concentrate tailings and SG&A savings. Production costs were unfavorable by $4 million compared to the prior year and $7 million unfavorable compared to Q2. Both were a result of unfavorable LCM and idle facility adjustments due to lower pricing and higher costs from reduced operating rates. These were partially offset by lower cost tons sold in the quarter as a result of the self-help actions that we initiated with our sustainable cost improvement program.

We operate both hydro and pyro metallurgical processes and employ over 400 engineers geologists and metallurgy.

Speaker #1: These developments are extremely positive for Tronox , especially as the sole domestic producer in Brazil and Saudi Arabia , and a significant participant in the EU and Indian markets , as well as the US market .

Among our 6500 employees combined with our global footprint. We are we have the flexibility to optimize where we participate along the way or it's value chain.

Speaker #1: Combining this with the industries , idled mining capacity and over 1.1 million tons of global TiO2 supply that has been taken offline since 2023 .

As a part of the strategy.

Tobey, we took a 5% equity interest in line rock minerals mineral exploration company, whose manta and manta east deposits have the potential to be a major source of high quality monocyte and rutile. This investment represents an attractive opportunity with minimal overburden and has substantial potential for resource development in support of our.

Speaker #1: The majority of which we believe is permanent . The industry is ongoing , undergoing a structural shift that supports a supply demand rebalance as the most vertically integrated TiO2 producer , Tronox is well positioned to capitalize on this opportunity .

Speaker #1: Created by the rebalancing of the market . Turning to slide ten , we remain actively engaged in advancing our rare earth strategy with high concentrations of rare Earth and our mineral deposits , and decades of expertise in mining and mineral processing .

Our strategy.

Now turning to slide 11.

I'll review our updated outlook.

We are now expecting Q4, 2025 revenue and adjusted EBITDA to be relatively flat to Q3 of 25. This.

This was primarily driven by weaker than anticipated pricing on <unk> zircon as a result of more aggressive competitive activity in the market.

John Srivisal: Without these proactive actions, the headwinds would have been more significant. Turning to the next slide, as John mentioned earlier, we raised $400 million of secured notes in the third quarter to enhance available liquidity and repay borrowings under our revolving credit facilities. With that, we ended the quarter with total debt of $3.2 billion and net debt of $3.0 billion. Our net leverage ratio at the end of September was 7.5x on a trailing 12-month basis. Our weighted average interest rate in Q3 was approximately 6%, and we maintained interest rate swaps such that approximately 77% of our interest rates are fixed through 2028. Importantly, our next significant debt maturity is not until 2029. We also do not have any financial covenants on our term loans or bonds. We do have one springing financial covenant on our US revolver that we do not expect to trigger.

Speaker #1: We're uniquely positioned to play a significant role across the value chain , from mining to upgrading . We are already mining monazite in Australia and South Africa , but our capabilities extend beyond mining .

Partially offset by improving volumes across both tier two and zircon.

Although our outlook has been revised lower from our previous guidance, we expect fourth quarter <unk> volumes to increase 3% to 5% net of a 2% volume headwind from idling, our Fuzhou facility and zircon volumes to increase 15% to 20% sequentially in part due to the roll bulk order from Q3 to Q4.

Speaker #1: We operate both hydro and pyrometallurgical processes and employ over 400 engineers , geologists and metallurgists . Among our 6500 employees , combined with our global footprint , we are .

Speaker #1: We have the flexibility to optimize where we participate along the rare earths value chain . As a part of this strategy , in October , we took a 5% equity interest in line Rock minerals , a mineral exploration company whose Minta and mentee deposits have the potential to be a major source of high quality monazite and rutile .

These are strong leading indicators for the fourth quarter, which is normally lower due to seasonality and directionally in line with what we would historically see on the front end of a recovery.

On the cost side, we continue to execute on our cost reducing measures as previously outlined.

Speaker #1: This investment represents an attractive opportunity with minimal overburden and has substantial potential for resource development in support of our rare Earth strategy . Now turning to slide 11 .

Our sustainable cost improvement program is expected to exceed over $600 million $60 million of run rate savings by the end of the year.

John Srivisal: Liquidity as of 30 September was $664 million, including $185 million in cash and cash equivalents that are well distributed across the globe that we are able to move around with little to no frictional cost. Working capital was a use of approximately $55 million, excluding $30 million of restructuring payments related to the closure of our Botlek site. This was due to the decrease in accounts payable driven by lower purchases, cash improvement actions, and an increase in accounts receivable. Changes in inventories was a much lower source of cash than expected as a result of lower sales volumes. Our capital expenditures totaled $80 million in the quarter, with approximately 59% allocated to maintenance and safety, and 41% almost exclusively dedicated to the mining extensions in South Africa to sustain our integrated cost advantage.

And as I mentioned earlier, we have temporarily idled, our brazeau pigment plant and one of our furnaces at R&R market site lowered operating rates at Sterling barrel pigment plant and will soon initiate a temporary shutdown of our west mine.

Speaker #1: I'll review our updated outlook . We are now expecting Q4 2025 revenue and adjusted EBITDA to be relatively flat to Q3 of 25 .

Speaker #1: This is primarily driven by weaker than anticipated pricing on TiO2 and zircon . As a result of more aggressive competitive activity in the market , partially offset by improving volumes across both TiO2 and zircon .

We will continue to assess further measures across mining and pigment sites to ensure production remains closely aligned with prevailing market conditions.

These actions position us for positive free cash flow in the fourth quarter and 2026.

Speaker #1: Although our outlook has been revised lower from our previous guidance , we expect fourth quarter TiO2 volumes to increase 3 to 5% , net of a 2% volume headwind from idling .

With regards to our cash use items for the year, we expect the following.

Net cash interest of approximately $150 million net taxes of less than $5 million and capital expenditures of approximately $330 million.

Speaker #1: Our Fujairah facility and zircon volumes to increase 15 to 20% sequentially , in part due to the rolled bulk order from Q3 to Q4 .

And we expect working capital to be a slight source of cash for the fourth quarter.

Speaker #1: These are strong , leading indicators for the fourth quarter , which is normally lower due to seasonality and directionally in line with what we would historically see on the front end of a recovery .

Turning to the next slide overview of our capital allocation strategy before we move the call to Q&A.

John Srivisal: We returned $20 million to shareholders in the form of dividends paid in the third quarter. The Q4 dividend reflects the updated $0.05 per share level. I want to reaffirm our commitment to improving cash flow, and optimizing working capital. We are implementing targeted actions to reduce inventory through lowering production rates across all areas of our operation. We continue to maintain discipline around capital expenditures, as illustrated around our actions with the West Mine. I remain confident in our ability to weather this prolonged downturn. With that, I'll hand it back to John to review these actions in more detail. John?

Our capital allocation priorities remain unchanged and focused on cash generation, we continue investing to maintain our assets our vertical integration and projects critical to progress our strategy, including rare Earths we.

Speaker #1: On the cost side , we continue to execute on our cost reducing measures as previously outlined , our sustainable cost improvement program is expected to exceed over $600,000,060 million of run rate savings by the end of the year .

We've taken decisive action to reduce our capital expenditures over the course of the year.

Speaker #1: And as I mentioned earlier , we have temporarily idled our pigment plant and one of our furnaces at our democracy lowered operating rates at Stallingborough Pigment Plant and will soon initiate a temporary shutdown of our West mines .

For 2026, while we have some catch up capital from delayed projects in 2025, we expect capital to be less than $275 million in the year.

We continue to focus on bolstering liquidity.

Speaker #1: We will continue to assess further measures across mining and pigment sites to ensure production remains closely aligned with prevailing market conditions . These actions position us for positive free cash flow in the fourth quarter and 2026 , with regards to our cash use items for the year , we expect the following .

John Romano: Thanks, John. Turning to slide nine, as outlined at the start of the call, we have seen positive developments on anti-dumping this year. This slide summarizes the monthly Chinese exports to the four key regions that finalized duties in 2025. While India's duties are currently stayed, we have a high level of confidence that they will be reinstated in the near future. As the data shows, the implementation of anti-dumping duties has had a measurable and meaningful impact on Chinese imports in the EU, Brazil, and India, and we would expect to see this trend carry into Saudi Arabia as the governments reinforce their commitment to local investment and sustainability. At the peak, these markets imported a total of approximately 800,000 tons of TiO2 from China.

With the actions taken in the third quarter, we have ample liquidity to manage the business and endure market fluctuations.

Last quarter, we lowered the dividend by 60% to align with the current macro environment.

And as the market recovers, we will resume debt paydown targeting mid to long term net leverage range of less than three times.

Speaker #1: Net cash interest of approximately $150 million . Net taxes of less than $5 million , and capital expenditures of approximately $330 million , and we expect working capital to be a slight source of cash for the fourth quarter .

We will continue to focus on what we can control and influence and reinforced the business through cost reduction and cash improvement actions as the most vertically integrated <unk> producer Tronox is well positioned to capitalize on the opportunity created by the rebalancing of the market evidenced by the effect of anti dumping duties and supply rationalization and the industry.

Speaker #1: Turning to the next slide . Overview . Our capital allocation strategy before we move the call to Q&A , our capital allocation priorities remain unchanged and focus on cash generation .

Tree.

I remain confident that our in our ability to navigate this environment and deliver meaningful value for shareholders.

Speaker #1: We continue investing to maintain our assets , our vertical integration and projects critical to furthering our strategy , including rare earths . We have taken decisive action to reduce our capital expenditures over the course of the year .

John Romano: While we do not anticipate this figure to go to zero, we have and expect to continue to see a meaningful reduction in exports to these markets, and share growth for Tronox. As a reference, the US has had tariffs in place on TiO2 since 2018, when the Section 301 tariffs were put in place under President Trump's first administration. Chinese exports to the region have remained consistently below 20,000 metric tons per year in a market that consumes approximately 900,000 metric tons. These developments are extremely positive for Tronox, especially as the sole domestic producer in Brazil and Saudi Arabia, and a significant participant in the EU, Indian, and US markets.

And that with that I will turn the question back over to the operator for the Q&A session operator.

Thank you we will now begin the question and answer session. If you all participating in the Q&A and have joined via Webinar. Please use the raison icon, which can be found at the bottom of your webinar application screen.

Speaker #1: For 2026 , while we have some catch up capital from delayed projects in 2025 , we expect capital to be less than $275 million a year .

Speaker #1: We continue to focus on bolstering liquidity with the actions taken in the third quarter . We have ample liquidity to manage the business and endure market fluctuations .

Thank you all participating in the Q&A and have joined by a phone line. Please press Don nine on your keypad to raise your hand.

Speaker #1: Last quarter , we lowered the dividend by 60% to align with the current macro environment . And as the market recovers , we will resume debt paydown targeting mid to long term net leverage range of less than three times .

When you all called upon you will be prompted to on mute your line and ask your question.

If you have joined us by phone please dial star.

Amit yourself.

Speaker #1: We will continue to focus on what we can control and influence and reinforce the business through cost reduction and cash improvement actions . As the most vertically integrated TiO2 producer , Tronox is well positioned to capitalize on the opportunity created by the rebalancing of the market , evidenced by the effect anti-dumping duties and supply rationalization in the industry .

We will now take a minute for the Q2 roster.

John Romano: Combining this with the industry's idled mining capacity and over 1.1 million tons of global Tier 2 supply that has been taken offline since 2023, the majority of which we believe is permanent, the industry is undergoing a structural shift that supports a supply-demand rebalance. As the most vertically integrated Tier 2 producer, Tronox is well positioned to capitalize on this opportunity created by the rebalancing of the market. Turning to slide 10, we remain actively engaged in advancing our rare earth strategy. With high concentrations of rare earth in our mineral deposits, and decades of expertise in mining and mineral processing, we're uniquely positioned to play a significant role across the value chain from mining to upgrading. We are already mining monazite in Australia and South Africa, but our capabilities extend beyond mining.

Our first question comes from James Keenan at UBS, James Please dial Star Columbia yourself. Thank you.

Yeah, Hey, guys. Thanks for taking my question.

I think the first thing I wanted to poke on was just around some of the anti dumping measures you are seeing.

Speaker #1: I remain confident that our in our ability to navigate this environment and deliver meaningful value for shareholders , and that with that , we'll turn the question back over to the operator for the Q&A session .

Just given the movement with India.

Housing their tariffs for a while it seems like if I square that against.

Speaker #1: Operator .

The new measures in Brazil, and Saudi Arabia that would be a net negative in terms of market size.

Speaker #3: Thank you . We will now begin the question and answer session . If you are participating in the Q&A and have joined via webinar , please use the Raise Hand icon , which can be found at the bottom of your webinar application screen .

Can you talk about how those dynamics are playing into your volume guidance.

Speaker #3: If you are participating in the Q and A and have joined via phone line , please press star nine on your keypad to raise your hand when you are called upon , you will be prompted to unmute your line and ask your question .

Yeah. Thanks, James So youre right, the Brazil market and the Saudi Arabian market collectively are in fact lower than the demand in India, but I will say that we have a high level of confidence that those duties are going to be reinstated and we're hoping that's going to happen before the end of the year we are not.

John Romano: We operate both hydro and pyrometallurgical processes and employ over 400 engineers, geologists, and metallurgists among our 6,500 employees. Combined with our global footprint, we have the flexibility to optimize where we participate along the rare earth value chain. As a part of this strategy, in October, we took a 5% equity interest in Lion Rock Minerals, a mineral exploration company whose Menta and Menta East deposits have the potential to be a major source of high-quality monazite and rutile. This investment represents an attractive opportunity with minimal overburden, and has substantial potential for resource development in support of our rare earth strategy. Now turning to slide 11, I'll review our updated outlook. We are now expecting Q4 2025 revenue and adjusted EBITDA to be relatively flat to Q3 of 2025.

Speaker #3: If you have joined us via phone , please dial star six to unmute yourself . We will now take a minute for the queue to roster .

Obviously, not having a facility they are actively engaged in those negotiations, but we're very informed and what's going on and we do believe that the GTR will make a decision.

Speaker #3: Our first question comes from James Cannon at UBS . James , please dial star six to unmute yourself . Thank you .

Year to year and so the duties in India are currently still being collected.

And if for whatever reason those duties get reinstated.

Speaker #4: Yeah . Hey guys . Thanks for taking my question . I think the first thing I wanted to poke on was just around some of the anti-dumping measures you're seeing , just given the movement with India kind of pausing , their tariffs for a while , it seems like if I square that against the new measures in Brazil and Saudi Arabia , that would be a net negative in terms of like market size .

<unk> is really changing so when we look at the exports.

We are there is a bit of a headwind, where we were expecting more volume in the fourth quarter.

When we think about our prior guidance, we were guiding to a higher number we're still guiding to 3% to 5% more than what we were in the third quarter.

And we're seeing some pick up there, but not as much as we had originally anticipated.

John Romano: This is primarily driven by weaker-than-anticipated pricing on TiO2 and zircon as a result of more aggressive competitive activity in the market, partially offset by improving volumes across both TiO2 and zircon. Although our outlook has been revised lower from our previous guidance, we expect fourth-quarter TiO2 volumes to increase 3% to 5%, net of a 2% volume headwind from idling our Fuzhou facility, and zircon volumes to increase 15% to 20% sequentially, in part due to the rolled bulk order from Q3 to Q4. These are strong leading indicators for the fourth quarter, which is normally lower due to seasonality, and directionally in line with what we would historically see on the front end of a recovery. On the cost side, we continue to execute on our cost-reducing measures, as previously outlined. Our sustainable cost improvement program is expected to exceed over $60.

Speaker #4: Can you talk about how those dynamics are playing into your volume guidance ?

With Brazil and India.

Saudi Arabia, and we think that that is a unique opportunity.

When you think about the duties that were implemented in Brazil, they were significantly higher than the provisional duties in many instances with the larger importers double.

Speaker #1: Yeah . Thanks , James . So you're right , the Brazil market and the Saudi Arabia market collectively are in fact lower than the demand in India .

Speaker #1: But I will say that we have a high level of confidence that those duties are going to be reinstated . And we're hoping that's going to happen before the end of the year .

You should think about a number of around $200 per ton across all importers.

Speaker #1: We are not obviously not having a facility there , actively engaged in those negotiations , but we're very informed in what's going on .

So that's a significant play with the sole producer there Saudi Arabia what.

What I can tell you is that we were expecting.

Speaker #1: And we do believe the DGR will make the decision prior to year end . So the duties in India are currently still being collected .

<unk> that to happen, but not as soon as it did and we are the only producer there and we also think we're going to have a unique opportunity. There. So when we start to think about those volumes in that shift that I referenced on the call in the prepared comments about Q3 numbers.

Speaker #1: And if for whatever reason , those duties get reinstated , nothing's really changing . So when we look at the exports , we are there is a bit of a headwind where we were expecting more volume in the fourth quarter .

<unk> Q4 numbers, it's not just a projection we're looking at our October is already complete.

John Romano: Million of run rate savings by the end of the year. As I mentioned earlier, we have temporarily idled our Fuzhou pigment plant and one of our furnaces at our Namaqua site, lowered operating rates at Stallingborough Pigment Plant, and will soon initiate a temporary shutdown of our West Mine. We will continue to assess further measures across mining and pigment sites to ensure production remains closely aligned with prevailing market conditions. These actions position us for positive free cash flow in the fourth quarter and 2026. With regards to our cash use items for the year, we expect the following: net cash interest of approximately $150 million, net taxes of less than $5 million, and capital expenditures of approximately $330 million. We expect working capital to be a slight source of cash for the fourth quarter.

When we look at across every month that we sold so far.

Speaker #1: When we think about our prior guidance , we were guiding to a higher number . We're still guiding to 3 to 5% more than what we were in the third quarter .

Recall, our first quarter sales were actually pretty strong March was our strongest month and then we saw our volumes declined because we had a lot of other destocking going on all the things that we referenced earlier, but our October sales, which are now complete.

Speaker #1: And we're seeing some pickup there , but not as much as we had originally anticipated . With Brazil and India and Saudi Arabia , we think that that is a unique opportunity .

We're the second largest month this year and equivalent to the March sales and when we look into November and December November is trending in the same way we have very good there.

Speaker #1: When you think about the duties that were implemented in Brazil, they were significantly higher than the provisional duties in many instances, with the larger importers doubling.

<unk> on in November and December orders, So I know, there's probably some trepidation around what we're saying.

Speaker #1: So you should think about a number of around $1,200 per ton across all importers . So that's a significant play with the sole producer there , Saudi Arabia .

With regards to confidence level on the numbers, but that 3% to 5% that we're looking at with regards to growth Q3 to Q4.

Speaker #1: What I can tell you is that was we were expecting that to happen , but not as soon as it did . And we are a the only producer there .

It's very much in our line of sight.

John Romano: Turning to the next slide, I'll review our capital allocation strategy before we move the call to Q&A. Our capital allocation priorities remain unchanged, and focused on cash generation. We continue investing to maintain our assets, our vertical integration, and projects critical to furthering our strategy, including rare earths. We have taken decisive action to reduce our capital expenditures over the course of the year. For 2026, while we have some catch-up capital from delayed projects in 2025, we expect capital to be less than $275 million in a year. We continue to focus on bolstering liquidity. With the actions taken in the third quarter, we have ample liquidity to manage the business and endure market fluctuations. Last quarter, we lowered the dividend by 60% to align with the current macro environment.

Speaker #1: And we also think we're going to have a unique opportunity there . So when we start to think about those volumes and that shift that I referenced on the call in the prepared comments about Q3 numbers versus Q4 numbers , it's not just a projection .

Got it thanks, and then I just have one follow up on the railroads opportunity.

You talked about having some capabilities with chemical conversion, but if you could give a little more detail in just unpack for us what you can do in the railroad space in kind of the.

Speaker #1: We're looking at our October is already complete , and we'll be looking at across every month that we've sold so far . If you recall , our first quarter sales were actually pretty strong .

Refining type downstream.

Piece of that market and whether or not you can do that with your current footprint or that would need additional capital or a partner.

Speaker #1: March was our strongest month . And then we saw our volumes decline because , you know , we had a lot of other destocking going on .

Okay. Yeah. So look on the rare side of the business, obviously, we've been mining forever and I made reference that mining is not the only capability that we have so we're already in the concentration business. So thats, just producing where mineral concentrate and have historically been selling that.

Speaker #1: All the things that we referenced earlier , but our October sales , which are now complete , were the second largest month this year .

Speaker #1: And an equivalent to the March sales . And when we look into November and December , November is trending in the same way .

The next step in that value chain will be cracking a leaching we've already completed.

Speaker #1: And we have very good vision on November and December orders . So I know there's probably some trepidation around what we're saying or with regards to confidence level on the numbers , but that 3 to 5% that we're looking at with regards to growth , Q3 to Q4 is very much in our line of sight .

John Romano: As the market recovers, we will resume debt paydown, targeting mid to long-term net leverage range of less than 3x. We will continue to focus on what we can control and influence, and reinforce the business through cost reduction and cash improvement actions. As the most vertically integrated Tier 2 producer, Tronox is well positioned to capitalize on the opportunity created by the rebalancing of the market, evidenced by the effective anti-dumping duties and supply rationalization in the industry. I remain confident in our ability to navigate this environment and deliver meaningful value for shareholders. With that, we'll turn the question back over to the operator for the Q&A session. Operator?

A pre feasibility study and have started a definitive feasibility study on that production. We have located a site where that would be in Australia.

Moving down into refining a separation that is work that is going to require for us to do some work with a partner we're engaged with a lot of different participants across multiple jurisdictions.

Speaker #4: Got it . Thanks . And then I just have one follow up on the rare earths opportunity . You you talked about having some capabilities with chemical conversion , but if you could give a little more detail and just unpack for us what you can do in the railroad space in kind of the refining type downstream piece of that market .

Non disclosure agreements in place so we aren't at Liberty to elaborate on who that is but we're well positioned with our current capacity as well as some of the things that we referenced.

We made a small investment.

John Srivisal: Thank you. We will now begin the question and answer session. If you are participating in the Q&A and have joined via webinar, please use the raised hand icon, which can be found at the bottom of your webinar application screen. If you are participating in the Q&A and have joined via phone line, please press star nine on your keypad to raise your hand. When you are called upon, you will be prompted to unmute your line and ask your question. If you have joined us via phone, please dial star six to unmute yourself. We will now take a minute for the queue to roster. Our first question comes from James Cannon at UBS. James, please dial star six to unmute yourself. Thank you.

And a company called Lion rock.

Speaker #4: And whether or not you can do that with your current footprint , or that would need additional capital or a partner .

That company has a very interesting deposit.

We've looked at it we've actually sent our people there we made the investments so that we could now validate the work that they've done.

Speaker #1: Okay , yeah . So look on the rare side of the business , obviously , we've been mining forever . And I made reference to that .

Speaker #1: Mining is not the only capability that we have . So we're already in the concentration business . So that's just producing rare mineral concentrate and have historically been selling that .

There is still a lot of work to do there, but it's not only our current mining we're looking longer term at how we can continue to support that growth there will be capital involved and as we have more information, we'll articulate that but at this particular stage.

Speaker #1: The next step in that value chain would be cracking and leaching . We've already completed a defeat , a definitive a pre-feasibility study and have started a definitive feasibility study on that production .

About where we will have to.

Close off the discussion with regards to development there.

Speaker #1: We've located a site where that would be an Australia look moving down into refining and separation . That is work that's going to require for us to do some work with a partner .

Understood very helpful. Thank you very much.

Thank you. Our next question comes from Pizza Osterlund tree with Securities.

So please <unk>.

Speaker #1: We're engaged with a lot of different participants across multiple jurisdictions . We have non-disclosure agreements in place , so we aren't at liberty to elaborate on who that is .

Ask your question. Thank you.

James Cannon: Yeah, hey guys. Thanks for taking my question. I think the first thing I wanted to poke on was just around some of the anti-dumping measures you're seeing. Just given the movement with India kind of pausing their tariffs for a while, it seems like if I square that against the new measures in Brazil and Saudi Arabia, that would be a net negative in terms of market size. Can you talk about how those dynamics are playing into your volume guidance?

Just wanted to ask.

Speaker #1: But we're well positioned with our current capacity as well as some of the things that we referenced . And we we made a small investment and a company called Lionrock .

You flagged that Jonathan.

Okay.

Sorry.

We're getting a little bit of a tough connection from you can you start at the beginning of your question again please.

Speaker #1: That company has a very interesting deposit . We've looked at it . We've actually sent our people there . We made the investments so that we could now validate the work that they've done .

Sure can you hear me now better thank you.

I just wanted to ask.

Yes.

Speaker #1: There's still a lot of work to do there , but it's not only our current mining . We're looking longer term at how we can continue to support that growth .

Bold.

John Romano: Yeah, thanks, James. You're right. The Brazil market and the Saudi Arabia market collectively are, in fact, lower than the demand in India. I will say that we have a high level of confidence that those duties are going to be reinstated. We're hoping that's going to happen before the end of the year. We are obviously not having a facility there actively engaged in those negotiations, but we're very informed in what's going on. We do believe the DGTR will make a decision prior to year-end. The duties in India are currently still being collected. If for whatever reason those duties get reinstated, nothing's really changing. When we look at the exports, there is a bit of a headwind where we were expecting more volume in the fourth quarter.

<unk> and lower operating rate grow.

You have in mind at this point.

Speaker #1: There will be capital involved and as we have more information , we'll articulate that . But at this particular stage , that's about where we'll have to close off the discussion with regards to development .

Okay.

Can you.

This industry.

Fix could be sections to come from.

And Peter So I'll try to answer your question it was a bit broken up with regarding.

Speaker #1: There .

I think the idling of the Fuzhou plant and our actions that we took install and borrow.

Speaker #4: Understood . Very helpful . Thank you very much .

Speaker #3: Thank you . Our next question comes from Peter Österlund at Truist Securities . Peter , please dial star six to unmute your line and ask your question .

So the physical plant, we idled plant to preserve cash.

Market as we've talked about all of these issues with anti dumping are creating a lot of competitive activity inside of China.

Speaker #3: Thank you .

That is one of our lowest cost plants, but it's obviously operating in one of the lowest priced markets, so with idle that facility or <unk>.

Speaker #4: I just wanted to ask about the the steps . I know you plan to Peugeot and . Sorry , Peter .

John Romano: When we think about our prior guidance, we were guiding to a higher number. We're still guiding to 3% to 5% more than what we were in the third quarter. We're seeing some pickup there, but not as much as we had originally anticipated. With Brazil and Saudi Arabia, we think that is a unique opportunity. When you think about the duties that were implemented in Brazil, they were significantly higher than the provisional duties. In many instances, with the larger importers, double. You should think about a number of around $1,200 per ton across all importers. That is a significant play with the sole producer there, Saudi Arabia. What I can tell you is that we were expecting that to happen, but not as soon as it did.

<unk> would be the probably have that offline, we will make decisions on what we're going to do with that asset as the market unfolds with regards to Stalin borough.

Speaker #5: We're getting we're getting a little bit of a tough connection from you . Can you start at the beginning of your question again , please ?

We brought forward some maintenance and have slowed the facility down just to be in line with what the market's doing so.

Speaker #4: Sure . Can you hear me now ?

Speaker #5: Better . Thank you .

Speaker #4: I just wanted to ask now I know that Fujo and lower operating rates . Do you have a specific time frame in mind at this point ?

We would expect in the fourth quarter, we will probably bring that plant back up.

To full rates when you start thinking about all the things that we referenced around these structural changes.

Speaker #4: For how long to continue ? If industry .

We want to make sure that we're positioned to be able to support that inside of Europe, we have a significant position in Europe.

Speaker #6: Does .

Speaker #4: Fix , could these actions become .

The market in Europe has been a bit weaker in the third quarter.

Speaker #6: Permanent . ?

Speaker #1: And Peter , I'll try to answer your question . It was a bit broken up . It was regarding , I think , the idling of the food plant and our actions that we took in Stallingborough .

When we started thinking about all of the activity that's going on around the supply demand dynamics right now with the pickup in Q4 I.

Speaker #1: So the plant , you know , we idled that plant to preserve cash . You know , the market as we've talked about all of these issues with anti-dumping , are creating a lot of competitive activity inside of China .

I do believe and I've said this before but I do believe we're on the front end of a recovery and front end of the recover you'll start to see demand patterns that are a bit different than what you would historically see Q4 volumes being up 3% to 4%.

John Romano: We are the only producer there, and we also think we're going to have a unique opportunity there. When we start to think about those volumes and that shift that I referenced on the call and the prepared comments about Q3 numbers versus Q4 numbers, it's not just a projection. We're looking at our October is already complete. When we look at across every month that we've sold so far, if you recall, our first quarter sales were actually pretty strong. March was our strongest month, and then we saw our volumes decline because we had a lot of other destocking going on, all the things that we referenced earlier. Our October sales, which are now complete, were the second largest month this year and equivalent to the March sales. When we look into November and December, November is trending in the same way.

Speaker #1: That is one of our lowest cost plants , but it's obviously operating in one of the lowest priced markets . So we've idled that facility .

When they're seasonally normally down is a good sign for us.

And the next step beyond that if we see this continuing to transition in a positive direction, we'll start looking at pricing initiatives. So I'm.

Speaker #1: Our plan would be to probably have that offline . We'll make decisions on what we're going to do with that asset as the market unfolds .

Very encouraged by what we're seeing in the market style umbrella to be specific as a short term action, where we brought forward some maintenance slowed the plant down to manage inventory, but we'll be ready to action that plant at full rates to meet the demand as it returns.

Speaker #1: With regards to Stallingborough , you know , we brought forward some maintenance and have slowed the facility down just to be in line with what the market's doing .

Speaker #1: So I would expect that in the fourth quarter, we'll probably bring that plant back up to full rate. When you start thinking about all the things that we referenced around the structural changes, we want to make sure that we're positioned to be able to support that inside of Europe.

Very helpful color. Thank you.

John Romano: We have very good vision on November and December orders. I know there's probably some trepidation around what we're saying with regards to confidence level and the numbers, but that 3% to 5% that we're looking at with regards to growth Q3 to Q4 is very much in our line of sight.

Just as a follow up thinking about 2026 earnings potential targeting the 25 to 175 by the end of 2006.

Speaker #1: We have a significant position in Europe . The market in Europe has been a bit weaker in the third quarter . You know , when we start thinking about all of the activity that's going on around the supply demand dynamics right now with the pickup in Q4 , I do believe and I've said this before , but I do believe we're on the front end of a recovery and front end of the recovery .

Do you have an estimate of what the year over year EBITDA impact will be.

96 versus <unk> 25, and what are the swing factors that would drive the low versus the high end of cost savings within that range.

Yes, thanks for that question Peter.

James Cannon: Got it. Thanks. I just have one follow-up on the rare earths opportunity. You talked about having some capabilities with chemical conversion, but if you could give a little more detail and just unpack for us what you can do in the rare earth space in kind of the refining type downstream piece of that market and whether or not you can do that with your current footprint or that would need additional capital or a partner.

Speaker #1: You start to see demand patterns that are a bit different than what you would historically see. Q4 volumes being up 3% to 4% when they're seasonally, normally down, is a good sign for us.

No.

As we've mentioned previously we have taken action this year, but on a sustainable cost improvement program, but it will take some time for us to flow through our our balance sheet and to see it in our results.

Speaker #1: And , you know , the next step beyond that , if we see this to continuing to transition in a positive direction , we'll start looking at pricing initiatives .

So in 2025, there's been tons of activity across all of our sites.

Sites all of our functions all of operations.

Speaker #1: So I'm very encouraged by what we're seeing in the market . Stallingborough to be specific , is a short term action where we brought forward some maintenance , slowed the plant down to manage inventory , but we'll be ready to action that plant at full rates to meet the demand as it returns .

But in 2025, it's primarily been the lower hanging fruit that we've seen in our numbers so about $10 million, we've seen primarily in SG&A although.

John Romano: Okay. Yeah. Look, on the rare earth side of the business, obviously, we've been mining forever, and I made reference that mining is not the only capability that we have. We're already in the concentration business, so that's just producing rare earth mineral concentrate and have historically been selling that. The next step in that value chain would be cracking and leaching. We've already completed a pre-feasibility study and have started a definitive feasibility study on that production. We've located a site where that would be in Australia. Look, moving down into refining and separation, that is work that's going to require for us to do some work with a partner. We're engaged with a lot of different participants across multiple jurisdictions. We have non-disclosure agreements in place, so we aren't at liberty to elaborate on who that is. We're well positioned with our current.

As we move into 2026 as John mentioned, we're already on a run rate.

To end the year at over $60 million. So we should see at least that amount in.

In 2026, it will be more operational focus at that level and we see it coming through in fixed costs.

Speaker #4: Very helpful color . Thank you . And just as a follow up , you know , thinking about 2026 earnings potential targeting the 25 to 175 of cost savings by the end of 2026 .

So maybe just adding on to that a little bit because we've had a lot of questions about the sustainable cost improvement program and this is a bottoms up process across our entire organization and at this point, we've identified enacted on almost 2000 ideas across our network.

Speaker #4: Do you have an estimate of what the year over year EBITDA impact will be in 26 versus 25 , and what are the swing factors that would drive the low versus the high end of cost savings within .

Speaker #6: That range ?

Speaker #2: Yeah , thanks for that question , Peter . So , you know , as we've mentioned previously , we we have taken action this year .

Out of those we've got more than 1100 that had been planned executed and fully realized and we currently have 413 of those ideas that are already delivering value.

Speaker #2: But on the sustainable cost improvement program . But it will take some time for us to flow through our our balance sheet and to see it in our results .

When you think about.

How those savings kind of breakout the significant portion of those savings are coming from fixed cost reductions and we're making good progress on the variable side as well.

John Romano: Capacity, as well as some of the things that we referenced. We made a small investment in a company called Lion Rock. That company has a very interesting deposit. We've looked at it. We've actually sent our people there. We made the investment so that we could now validate the work that they've done. There's still a lot of work to do there, but it's not only our current mining. We're looking longer term at how we can continue to support that growth. There will be capital involved. As we have more information, we'll articulate that. At this particular stage, that's about where we'll have to close off the discussion with regards to development there.

Speaker #2: So in 2025 , there's been tons of activity across all of our sites , all of our functions , all of operations . But in 2025 , it's primarily been the lower hanging fruit that we've seen .

Made some great progress on or yield improvements at our pigment plants. Thanks to some of the investments in our digital infrastructure like toys, which has tronox is operational information system APC and other actionable metrics all working together now and we're lifting and shifting those progress those projects across our network number it just had a few.

Speaker #2: Our numbers . About 10 million . We've seen primarily in SG&A , although , you know , as we move into 2026 , as John mentioned , we're already on a run rate to end the year at over 60 million .

Speaker #2: So we should see at least that amount in 2026 . It will be more operational , focused at that level . And we see it coming through in fixed costs .

More bullets, because I think it's important in addition, some of our other capital investments are now starting to pay off for example, some of the work that we did at Bunbury to upgrade our waste infrastructure are now translating into our capability to use lower head grade more efficiently and we're also realizing benefits from our energy efficiency.

Speaker #1: So maybe just adding on to that a little bit , because we've had a lot of questions about this sustainable cost improvement program .

James Cannon: Understood. Very helpful. Thank you very much.

Speaker #1: And this is a bottoms up process across our entire organization . And at this point we've identified and acted on almost 2000 ideas across our network .

John Srivisal: Thank you. Our next question comes from Peter Osterlund, Truist. Peter, please dial star six to unmute your line and ask your question. Thank you.

<unk> and the investments in case it in in the Marquis with larger electrodes at our furnaces, making differences and our costs and EMR optimization across all of our mining all of the mining side of our business our.

Speaker #1: And out of those , we've got more than 100 that have been planned , executed and fully realized . And we currently have 413 of those ideas that are already delivering value .

Our contracted usage has been optimized and we significantly reduced our outside services, helping us become more efficient and we've improved our logistics and optimizations of our MSP is to produce higher value product mixes that matched current market demand and found new opportunities to improve yield in several areas.

Peter Osterland: Just wanted to ask about the step you can have the Fuzhou plant.

Speaker #1: And when you think about , you know , how those savings kind of break out , significant portion of those savings are coming from fixed cost reductions .

John Srivisal: Sorry, Peter, we're getting a little bit of a tough connection from you. Can you start at the beginning of your question again, please?

Speaker #1: And we're making good progress on the variable side as well . And we've made some great progress on or yield improvements that are pigment plants .

Peter Osterland: Sure. Can you hear me now?

And one of the things that we're utilizing now as an app called power bi. So every one of our people that are engaged in this process across the organization, including myself have the ability to track. These projects on a daily basis. So this isn't something that we're just talking about it as something thats become ingrained in what we do.

Speaker #1: Thanks to some of the investments in our digital infrastructure , like toys , which is tronox operational information system , APC and other actionable metrics all working together now .

John Srivisal: Better. Thank you.

Peter Osterland: I just wanted to ask the announced idle at Fuzhou and lower operating rates at Stallingborough. Do you have a specific time frame in mind at this point for how long you plan to continue this? Could these actions become permanent?

Speaker #1: And we're lifting and shifting those progress . Those projects across our network now , just add a few more bullets , because I think it's important .

Speaker #1: In addition , some of our other capital investments are now starting to pay off . For example , some of the work that we did in Bunbury to upgrade our chlorine and waste infrastructure are now translating into our capability to use lower head grade , more efficiently .

Every day, and we're making great progress on that front.

Okay.

John Romano: Peter, I'll try to answer your question. It was a bit broken up. It was regarding, I think, the idling of the Fuzhou plant and our actions that we took in Stonewall. The Fuzhou plant, we idled that plant to preserve cash. The market, as we've talked about, all of these issues with anti-dumping are creating a lot of competitive activity inside of China. That is one of our lowest-cost plants, but it's obviously operating in one of the lowest-priced markets. We've idled that facility. Our plan would be to probably have that offline. We'll make decisions on what we're going to do with that asset as the market unfolds. With regards to Stonewall, we brought forward some maintenance and have slowed the facility down just to be in line with what the market's doing.

Thanks, a lot.

Our next question comes from Vincent Andrews at Morgan Stanley Vincent Please on mute your line and ask your question. Thank you.

Speaker #1: And we're also realizing benefits from our energy efficiencies , investments in KZN and Namakwa with larger electrodes in our furnaces making differences in our costs and EMV optimization across all of our mining , all of the mining side of our business and our contractor usage has been optimized and we've significantly reduced our outside services , helping us become more efficient .

Good morning, everybody. This is Justin Pellegrino on for Vincent.

Just wanted to see if you could help us bridge to the positive free cash flow that you stated for 2026 and what assumptions are included within that specifically if there is any.

Expectation for earnings growth and changes in working capital amongst the other cash items discussed on today's call. Thank you.

Speaker #1: And

Speaker #1: we've improved our logistics and optimization of our MSPs to produce higher value product mixes that match current market demand and have found new opportunities to improve yield in several areas .

Yes, thanks, Jonathan.

Obviously, we aren't giving a guide on 2026 as of yet other than being free cash flow positive, but some of the biggest drivers of improvement 2025% to 2026 include as we've mentioned the sustainable cost improvement program growing from 10 to well over $60 million year over year.

John Romano: I would expect in the fourth quarter, we'll probably bring that plant back up to full rate. When you start thinking about all the things that we referenced around these structural changes, we want to make sure that we're positioned to be able to support that inside of Europe. We have a significant position in Europe. The market in Europe has been a bit weaker in the third quarter. When we start thinking about all of the activity that's going on around the supply-demand dynamics right now with the pickup in Q4, I do believe, and I've said this before, but I do believe we're on the front end of a recovery. On the front end of the recovery, you start to see demand patterns that are a bit different than what you would historically see, Q4 volumes being up 3% to 4%.

We are also moving from a building of inventory in 2025 to reducing inventory.

Some of that relates to the targeted operational actions that we have mentioned before which is a 25% to $30 million savings in Q4, and that should grow to almost $50 million to $80 million.

Speaker #4: Very helpful .

Speaker #6: Thanks a lot .

Speaker #3: Thank you . Our next question comes from Vincent Andrews at Morgan Stanley . Vincent , please unmute your line and ask your question .

Just depending on.

How long we keep our.

Facilities down for.

Speaker #3: Thank you .

Additionally, we did mentioned that Capex will be reduced 3300 $30 million guided this year to under seven to $75 for next year.

Speaker #7: Good morning everybody . This is Justin Pellegrino on for Vincent . I just wanted to see if you could help us . Bridge to the positive free cash flow that you stated for 2026 .

Speaker #7: And what assumptions are included within that specifically , if there's any expectation for earnings growth and changes in working capital amongst the the other cash items that have been discussed on today's call ?

And then finally.

As you know, we did shut down our bottling facility and the cash restructuring charges, we do hit through free cash flow, which was should be well behind us now mostly behind us in 2026, we have roughly $80 million of cash charges in 2025 and a much lower.

John Romano: When they're seasonally normally down, it is a good sign for us. The next step beyond that, if we see this continuing to transition in a positive direction, we'll start looking at pricing initiatives. I'm very encouraged by what we're seeing in the market. Stallingborough, to be specific, is a short-term action where we brought forward some maintenance, slowed the plant down to manage inventory, but we'll be ready to action that plant at full rates to meet the demand as it returns.

Speaker #6: Thank you .

Speaker #2: Yeah . Thanks , Justin . And I'll try . And obviously we aren't giving a guide on 2026 as of yet . Other than being free cash flow positive .

Speaker #2: But some of the biggest drivers of improvement 2025 to 2026 include , as we've mentioned , the sustainable cost improvement program growing from ten to well over 60 million year over year .

Low low teens.

As expected in 2026.

It will depend a lot on the commercial market.

Great. Thank you and then just one more I was hoping.

Could kind of talk about the <unk>.

Speaker #2: We are also moving from a building of inventory in 2025 to reducing inventory . Some of that relates to the targeted operational actions that we have mentioned before , which is a 25 to 30 million savings in Q4 .

Higher than expected Destocking that you saw it downstream.

Can you frame that just relative to historical averages and then what are you hearing throughout the supply chain regarding expectations for rebuilding any sort of inventory in the channel. Thank you.

Peter Osterland: Very helpful, Color. Thank you. Just as a follow-up, thinking about 2026 earnings potential, targeting the $125 to 175 million cost savings by the end of 2026, do you have an estimate of what the year-over-year EBITDA impact will be in 2026 versus 2025? What are the swing factors that would drive the low versus the high end of cost savings within that range?

Speaker #2: And that should grow to almost 50 to 80 million . Just depending on how long we keep our our facilities down for . Additionally , you know , we did mention that CapEx will be reduced 30 , 330 million guided this year to under 775 for next year .

Yes.

I think the Destocking in my opinion took a little bit there happened a little bit sooner than it would normally in the year. So we werent anticipating a lot of that destocking that happened in the third quarter.

Quite frankly, a significant amount of it happened in September so right at the end of the quarter. So it was a bit unexpected.

John Srivisal: Yeah, thanks for that question, Peter. As we've mentioned previously, we have taken action this year on the sustainable cost improvement program, but it will take some time for us to flow through our balance sheet and to see it in our results. In 2025, there's been tons of activity across all of our sites, all of our functions, all of operations. In 2025, it's primarily been the lower-hanging fruit that we've seen in our numbers. About $10 million we've seen primarily in SG&A. Although, as we move into 2026, as John mentioned, we're already on a run rate to end the year at over $60 million. We should see at least that amount in 2026. It will be more operational focused at that level, and we see it coming through in fixed costs.

That being said, we think that a lot of that Destocking has already taken place and so when we start to look at our order pattern in the fourth quarter.

Speaker #2: And then finally , you know , as you know , we did shut down our bottling facility and the cash restructuring charges . We do hit through free cash flow , which was should be well behind us , mostly behind us .

Lot of it is just I think our customers going back to normal buying patterns again, when we start to think about a recovery it's going to be different this time and it's large.

Speaker #2: In 2026 . We have roughly 80 million of cash charges in 2025 . And a much lower low , you know , low teens or so expected in 2026 .

At the front end of it it's going to be based on a lot of the restructuring that's happened that's been fueled by all these anti dumping initiatives.

Speaker #2: Obviously will depend a lot on the commercial market .

When you think about the duty affected areas, including the U S, which I noted on the call.

Speaker #7: Great . Thank you . And then just one more . Was hoping you could kind of talk about the higher than expected destocking that you saw downstream .

No actually started under the first Trump administration with the section 301 tariffs you've got markets that consumed $2 7 million tons of Tio too that now have duty impacts and that's starting to play favorably because a lot of those markets are markets that we participate in and I know we've been talking about it for.

Speaker #7: Can you frame that just relative to historical averages . And then what are you hearing throughout the supply chain regarding expectations for rebuilding any sort of inventory in the in the channel ?

John Romano: Maybe just adding on to that a little bit because we've had a lot of questions about this sustainable cost improvement program. This is a bottoms-up process across our entire organization. At this point, we've identified and acted on almost 2,000 ideas across our network. Out of those, we've got more than 1,100 that have been planned, executed, and fully realized. We currently have 413 of those ideas that are already delivering value. When you think about how those savings kind of break out, a significant portion of those savings are coming from fixed cost reductions, and we're making good progress on the variable side as well.

Speaker #6: Thank you .

Speaker #1: Yeah . So look , that's I think the destocking in my opinion took a little bit . It happened a little bit sooner than it would normally in the year .

A long time, but.

But it's starting to actually show up in the numbers that paired with some of the.

Speaker #1: So we weren't anticipating a lot of that destocking to happen in the third quarter . Quite frankly a significant amount of it happened in the in September .

Competitive activity that was generated by one of our competitors that went through it in solvency. It's our opinion that that inventory will be liquidated soon and we're starting to see buying patterns in the European market, which would reflect that.

Speaker #1: So right at the end of the quarter , so it was a bit unexpected . That being said , we think that a lot of that destocking has already taken place .

Speaker #1: And so when we start to look at our order pattern in the fourth quarter , a lot of it is just I think our customers going back to normal buying patterns again , when we start to think about a recovery , it's going to be different this time and it's large at the front end of it .

India still a big market for us the duties have been stayed we have high level of confidence that they're going to come back hopefully before the end of the year and at this particular stage, although muted from our prior expectations, we're still seeing growth in that region. So again, I think theres a lot of reasons could be optimistic about where we are in the <unk>.

John Romano: We've made some great progress on ore yield improvements at our pigment plants, thanks to some of the investments in our digital infrastructure like Toys, which is Tronox's operational information system, APC, and other actionable metrics, all working together now, and we're lifting and shifting those projects across our network. I'm going to just add a few more bullets because I think it's important. In addition, some of our other capital investments are now starting to pay off. For example, some of the work that we did in Bunbury to upgrade our cooling and waste infrastructure are now translating into our capability to use lower head grade more efficiently. We're also realizing benefits from our energy efficiencies and investments in KZN and Namaqua with larger electrodes in our furnaces, making differences in our costs and EMV optimization across all of the mining side of our business.

Speaker #1: It's going to be based on a lot of this restructuring that's happened , that's been fueled by all these anti-dumping initiatives . I mean , when you think about the duty affected areas , including the US , which I noted on the call was , you know , actually started under the first Trump administration with the section 301 tariffs .

Michael we're three and a half years into a downturn and I can say with 100% certainty that it will turn and it's my assumption that we're on the front end of that at this stage.

Great. Thank you for the commentary.

Speaker #1: You've got markets that consume 2.7 million tons of TiO2 that now have duty impacts . And that's starting to play favorably because a lot of those markets are markets that we participate in .

Thank you.

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Speaker #1: And I know we've been talking about it for a long time , but it's starting to actually show up in the numbers that paired with some of the competitive activity that was generated by one of our competitors that went through an insolvency , it's our opinion that that inventory will be liquidated soon , and we're starting to see buying patterns in the European market , which would reflect that .

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John Romano: Our contractor usage has been optimized, and we've significantly reduced our outside services, helping us become more efficient. We've improved our logistics and optimizations of our MSPs to produce higher-value product mixes that match current market demand, and have found new opportunities to improve yield in several areas. One of the things that we're utilizing now is an app called Power BI. Every one of our people that are engaged in this process across our organization, including myself, have the ability to track these projects on a daily basis. This isn't something that we're just talking about. It's something that's become ingrained in what we do every day, and we're making great progress on that front.

Our next question comes from John Mcnulty at BMO capital market.

Speaker #1: India still a big market for us . The duties have been stayed . We have high level of confidence that they're come back , hopefully before the end of the year .

John You May know Amit your line and ask your question. Thank you.

Speaker #1: going to

Speaker #1: And at this particular stage , although muted from our prior expectations , we're still seeing growth in that region . So again , I think there's a lot of reasons to be optimistic about where we are in the cycle .

And John Max and Star six fee to them your line. Thank you.

This is John Robert I heard you call, John Mcnulty, but I'm just checking whether you can hear me.

Speaker #1: We're three and a half years into a downturn , and I can say with 100% certainty that it will turn and it's my assumption that we're on the front end of that at this stage .

Right.

Yes.

<unk>.

Thank you.

L b be able to use their new position in the UK to bring Chinese or in and serve in the rest of the European market without a tariff.

Speaker #7: Great . Thank you for the .

Speaker #6: Commentary .

Speaker #3: Thank you . As a reminder , if you are participating in today's Q&A and have joined via a webinar , please use the Raise Hand icon , which can be found at the bottom of your application screen .

Yes, John look Theres, a lot left to be done with the.

Peter Osterland: Very helpful. Thanks a lot.

John Srivisal: Thank you. Our next question comes from Justin Pellegrino at Morgan Stanley. Justin, please unmute your line and ask your question. Thank you.

The announcement that L. B is going to be acquiring that asset in the UK.

Speaker #3: If you have joined us via phone line , please press star nine on your keypad to raise your hand when you are called upon , you will be prompted to unmute your line and ask your question .

There is a lot of regulatory work to go through so I would say by no means it's not a slam dunk.

Justin Pellegrino: Good morning, everybody. This is Justin Pellegrino on for Vincent. I just wanted to see if you could help us bridge to the positive free cash flow that you stated for 2026, and what assumptions are included within that, specifically if there's any expectation for earnings growth and changes in working capital, amongst the other cash items that have been discussed on today's call. Thank you.

Speak to.

What's that EMEA undo that asset is down the longer that assets down the harder it is going to be to be brought back up and having done a lot of work trying to buy assets in Europe historically.

Speaker #3: If you have joined via phone , please dial Star six to unmute yourself

Speaker #3: . Our next question comes from John McNulty at BMO Capital Markets . John , you may now unmute your line and ask your question .

I would just say theres a lot of wood to chop there.

John Srivisal: Yeah, thanks, Justin. I'll try to handle that. Obviously, we aren't giving a guide on 2026 as of yet other than being free cash flow positive. Some of the biggest drivers of improvement 2025 to 2026 include, as we've mentioned, the sustainable cost improvement program growing from 10 to well over $60 million year over year. We are also moving from a building of inventory in 2025 to reducing inventory. Some of that relates to the targeted operational actions that we have mentioned before, which is a $25 to 30 million savings in Q4. That should grow to almost $50 to 80 million, just depending on how long we keep our facilities down for. Additionally, we did mention that CapEx will be reduced, $330 million guided this year to under $275 million for next year. Finally.

Speaker #3: Thank you . And John , that's star six for you to unmute your line . Thank you .

And do you have any rare earths activity going on in South Africa as well.

As we mine in South Africa, and Australia, and monetize is present in both deposits.

Speaker #4: This is John Roberts . I heard you called John McNulty . I'm just checking whether you can .

What we're doing right now is exiting mature of the majority of what we had in Australia, but yes, we have monazite in South Africa, and some of the things that we've done historically, although this last sale.

Speaker #6: Hear me .

Speaker #1: Yes .

Speaker #3: We can hear you . Thank you .

Speaker #6: Thank you . Will be able to use their new position in the UK to bring Chinese or in and serve the rest of the European market without a tariff .

Mineral concentrate didn't have much.

Rare Earth and it historically, we have and continue to mine.

And as long as we're mining in both those regions, we're getting monocyte, which has both light and heavy rare Senate and we're developing a process forward to monetize that.

Speaker #1: John , look , there's a lot left to be done with , you know , the announcement that HLB is going to be acquiring that asset in the UK .

In a way, which we can move down the values of value chain.

Speaker #1: There's a lot of regulatory work to go through . So I would say by no means is that a slam dunk . I can't speak to , you know , what they may do .

Looking at them at all.

Further we're going to move down that same would probably be the refining side and the mineralization and magnet production is not something that we feel.

Speaker #1: That asset is down . The longer that assets down , the harder it's going to be to be brought back up . And having done a lot of work trying to buy assets in Europe historically , I would just say there's a lot of wood to chop there .

John Srivisal: As you know, we did shut down our Botlek facility, and the cash restructuring charges we do hit through free cash flow, which should be well behind us, mostly behind us in 2026. We have roughly $80 million of cash charges in 2025 and a much lower, low teens or so expected in 2026. Obviously, we'll depend a lot on the commercial market.

We're uniquely positioned to do by being a mining company that's regularly involved upgrading its in.

Natural fit for us to look at concentration asset leasing and cracking and refining and separation.

Speaker #6: And do you have any rare earth activity going on in South Africa as well ?

Speaker #1: Well , we mine in South Africa and Australia and monazite is present in both deposits . What we're doing right now is actioning majority .

Alright, thank you.

Thank you. Our next question comes from participants at Bank of America Securities.

Justin Pellegrino: Great. Thank you. Just one more. I was hoping you could kind of talk about the higher-than-expected destocking that you saw downstream. Can you frame that just relative to historical averages? What are you hearing throughout the supply chain regarding expectations for rebuilding any sort of inventory in the channel? Thank you.

Speaker #1: The majority of what we have in Australia . But yes , we have monazite in South Africa . And some of the things that we've done historically , although this last sale of mineral concentrate didn't have much rare earth in it , historically we have and continue to mine .

Please press star fixture on mute your line. Thank you.

Alright, Thank you and good morning.

I just wanted to understand.

The updated guidance for either 2025.

Working capital outflow in 2025 free cash flow or or discuss the Q4 numbers.

Speaker #1: And as long as we're mining in both those regions , we're getting monazite , which has both light and heavy rare earths in it .

John Romano: Yeah. Look, I think the destocking, in my opinion, took a little bit—it happened a little bit sooner than it would normally in the year. We weren't anticipating a lot of that destocking to happen in the third quarter. Quite frankly, a significant amount of it happened in September, right at the end of the quarter. It was a bit unexpected. That being said, we think that a lot of that destocking has already taken place. When we start to look at our order pattern in the fourth quarter, a lot of it is just, I think, our customers going back to normal buying patterns. Again, when we start to think about a recovery, it's going to be different this time.

Speaker #1: And we're developing a process forward to monetize that in a , in a way which we can move down the value value chain and look at our furthest .

You have got.

You said working capital is only a slight.

A slight inflow, even though youre idling all of these.

So can you update us on either Q4 or full year 2025 with working capital as.

Speaker #1: We're going to move down that chain; would probably be the refining side. The metallization and magnet production is not something that we feel we're uniquely positioned to do.

As well as free cash flow.

Sure.

So I'll start and then I'll, let John add onto it but to be clear with the idling.

Speaker #1: But being a mining company that's regularly involved in mineral upgrading , it's a natural fit for us to look at concentration , acid leaching and cracking and refining and separation .

The asset so obviously it will be a working capital game for us on the Foochow facility slowing down Sterling bear on bringing forward maintenance will be a benefit but.

John Romano: At the front end of it, it's going to be based on a lot of this restructuring that's happened that's been fueled by all these anti-dumping initiatives. When you think about the duty-affected areas, including the US, which I noted on the call, it was actually started under the first Trump administration with the Section 301 tariffs. You've got markets that consume 2.7 million tons of TiO2 that now have duty impacts. That's starting to play favorably because a lot of those markets are markets that we participate in. I know we've been talking about it for a long time, but it's starting to actually show up in the numbers. That, paired with some of the competitive activity that was generated by one of our competitors that went to an insolvency, it's our opinion that that inventory will be liquidated soon.

And also on the.

Speaker #6: Okay , great . Thank you .

The furnace because that furnace actually was idled on September 15th.

Speaker #3: Thank you . Our next question comes from Roger Spitz at Bank of America Securities . Roger , please press star six to unmute your line .

Reporting that now but.

The West mine, which is a significant process.

Speaker #3: Thank you .

Speaker #8: Hi . Thank you and good morning . I just want to understand the updated guidance for either 2025 working capital outflow and 2025 free cash flow or or discuss the Q4 numbers .

Again, we made reference that that's going to happen as we bring on <unk> East Oss.

Starting commissioning on November 17th.

And as we finish that commissioning.

We'll then bring that west mine down.

The West mine and you can think about that particular asset.

Speaker #8: Because , you know , you've got you said working capital is only a slight a slight inflow , even though you're idling all these assets .

We had an east and a west mine <unk> is replacing the east mine and the West mine will continue to run and operate but to preserve cash we are idling that as soon as we bring on east RFS and Easter FX is going to have that higher grade mineral heavy mineral concentrate that will become into the network as well.

Speaker #8: So can you update us on either Q4 or full year 2025 ? Working capital , as well as free cash flow ?

John Romano: We're starting to see buying patterns in the European market, which would reflect that. India is still a big market for us. The duties have been stayed. We have a high level of confidence that they're going to come back, hopefully before the end of the year. At this particular stage, although muted from our prior expectations, we're still seeing growth in that region. I think there's a lot of reasons to be optimistic about where we are in this cycle. We're three and a half years into a downturn. I can say with 100% certainty that it will turn, and it's my assumption that we're on the front end of that at this stage.

Speaker #1: So I'll start and then I'll let John add on to it . But to be clear , with the idling of the assets , so obviously it'll be a working capital gain for us on the fusion facility slowing down stallingborough and bringing forward maintenance will be a benefit .

We referenced on the call. So John you want to add more yes, I think.

Just to answer your question and I'll give you a little more details, but as for through year to date Q3, obviously was a significant use on working capital and free cash flow roughly 190 million use in working capital.

Speaker #1: But and also on the the furnace , because you know , that furnace actually was idled on September the 15th . We're just reporting that now .

And about.

Of over 300 million use in free cash flow.

Speaker #1: But the West mine , which is a significant process . Again , we made reference that that's going to happen as we bring on IST offset , East offs is starting commissioning on November 17th , and as we finish that commissioning , we'll then bring that West mine down the West mine .

And we mentioned that we were going to be positive both on free cash flow and working capital for Q4. So obviously maintain a slight improvement over both I do think you need to look at what happened in Q3 and to understand what the drivers are in Q4. So as John mentioned, we did have a lot of.

Justin Pellegrino: Great. Thank you for the commentary.

John Srivisal: Thank you. As a reminder, if you are participating in today's Q&A and have joined via webinar, please use the raised hand icon, which can be found at the bottom of your application screen. If you have joined us via phone line, please press star nine on your keypad to raise your hand. When you are called upon, you will be prompted to unmute your line and ask your question. If you have joined via phone, please dial star six to unmute yourself. Our next question comes from John McNulty at BMO Capital Markets. John, you may now unmute your line and ask your question. Thank you. John, that's star six for you to unmute your line. Thank you.

Commercial impacts negatively.

Speaker #1: If you think about that particular asset , the we had an east and west mine , East office is replacing the East mine and the West mine will continue to run and operate .

With the antidumping delays in India with the Europe competitors of solvency, and then competitive dynamic in China and rolling of shipment on zircon from Q3 to Q4, obviously thats, our kind of shipment and will help us in Q4.

Speaker #1: But to preserve cash we're idling that as soon as we bring on East office and East Office is going to have that higher grade mineral heavy mineral concentrate that will become into the network as we referenced on the call .

And then.

We did have a tailing sale in Q3.

Speaker #1: So , John , you want to add more ?

Speaker #2: Yeah , I think just to answer your question upfront , I'll give you a little more details . But as for through year to date , Q3 , obviously it's a significant use on working capital and free cash flow , roughly 190 million views on working capital and about , you know , you know , over 300 million use in free cash flow .

But obviously that went to.

As that happened late in the quarter, we will collect on cash on that in the funnel in Q4, so should be an improvement quarter over quarter.

But all of that drove the fact that inventory was less.

John McNulty: This is John Romano. I heard you called John McNulty, but I'm just checking whether you can hear me.

Less of a reduction than we had expected and so not a significant source of cash.

John Srivisal: Yes, we can hear you. Thank you.

We'll see not recovery obviously the volumes are much higher in Q4 on both <unk> and zircon much.

Speaker #2: And we mentioned that we were going to be positive both on free cash flow and working capital for Q4 . So obviously , maintaining that in slight improvement over both , I do think you need to look at , you know , what happened in Q3 and to understand , you know , what the drivers are in Q4 .

John McNulty: Thank you. Will LB be able to use their new position in the UK to bring Chinese ore in and serve the rest of the European market without a tariff?

Much more muted than what you expected as John mentioned, but still an increase so we will see some benefit from the reduction of inventory.

John Romano: Yeah, John, look, there's a lot left to be done with the announcement that LB is going to be acquiring that asset in the UK. There's a lot of regulatory work to go through, so I would say by no means is that a slam dunk. I can't speak to what they may do. That asset is down. The longer that asset's down, the harder it's going to be to be brought back up. Having done a lot of work trying to buy assets in Europe historically, I would just say there's a lot of wood to chop there.

And then just from an AP perspective, it was a pretty decent Houston.

Speaker #2: So , as John mentioned , we did have a lot of commercial impacts negatively . You know , with the anti-dumping delays and India with the Europe competitors insolvency and then competitive dynamic in , in China and rolling of shipment on zircon from Q3 to Q4 .

As well as we did have restructuring charges.

About $30 million in Q3 that will be lower in Q4.

So while driving lower purchases and lower Capex drove higher AP, we will see that revert in Q4, so all that being said as we do expect Q4 free cash flow and working capital to be more significant than Q3.

Speaker #2: And obviously that zircon shipment will help us in Q4 . And then , you know , we did have a tailings sale in Q3 , but obviously that went to , you know , we're as that happened late in the quarter , you know , we will collect on cash on that in the in Q4 .

But roughly flat.

John McNulty: Do you have any rare earth activity going on in South Africa as well?

Thank you so much for that and my.

Follow up is you said you don't.

John Romano: Every mine in South Africa and Australia, and monazite is present in both deposits. What we're doing right now is actioning the majority of what we have in Australia. Yes, we have monazite in South Africa, and some of the things that we've done historically, although this last sale of mineral concentrate didn't have much rare earth in it, historically we have and continue to mine. As long as we're mining in both those regions, we're getting monazite, which has both light and heavy rare earths in it. We're developing a process forward to monetize that in a way which we can move down the value chain. Look, Amit, our.

Speaker #2: So it should be an improvement quarter over quarter . But all of that drove the fact that inventory was less less of a reduction than we had expected .

Don't expect to breach your revolver maintenance covenants.

In Q4.

Would you be able to provide either the EBITDA <unk> debt headroom.

Speaker #2: And so not a significant source of cash . We will see recovery . Obviously , the volumes are much higher in Q4 on both TiO2 and zircon , much more muted than what we expected .

At the end of Q3 under that Covenant.

So obviously as we mentioned we do not expect to spring the.

Springing covenant on the U S revolver, we are sitting with ample liquidity of $667 million and so obviously the test is you have to draw a 35% of our revolver, which is $250 million. So right now we're undrawn on that revolver and so we have significant cushion to get to that point.

Speaker #2: As John mentioned , but still an increase . So we will see some benefit from reduction inventory . And then , you know , just from an AP perspective , it was a pretty decent use in in AP as well .

Speaker #2: As you know , we did have restructuring charges of about 30 million in Q3 . That will be lower in Q4 . So while driving lower purchases and lower CapEx drove higher AP , we will see that revert in Q4 .

Several hundred millions of dollars.

And when we think about all the actions that we're taking to preserve cash.

John McNulty: Thank you.

John Romano: The furthest we're going to move down that chain would probably be the refining side. Metalization and magnet production is not something that we feel we're uniquely positioned to do. Being a mining company that's regularly involved in mineral upgrading, it's a natural fit for us to look at concentration, acid leaching and cracking, and refining and separation.

And you couple that with some of the positive things we're talking about on the market again I made reference that the market will recover we think we are on the front end of that but we're taking actions that we feel are prudent at this particular stage to make sure that we.

Speaker #2: So all that being said, we do expect Q4 free cash flow and working capital to be more significant than Q3, but roughly flat.

<unk> cash and that all of those things that John just referenced around.

Speaker #8: Thank you so much for that . And my follow up is you said you you don't expect to breach your revolver maintenance covenants in Q4 .

Our covenant is not triggered ever. So this is a process that were in place.

John McNulty: All right. Thank you.

It's been a tough downturn, but we're taking actions that we need to take to manage the business through the long term.

Speaker #8: Would you be able to provide either the EBITDA and or debt headroom at , you know , at the end of Q3 under that covenant ?

John Srivisal: Thank you. Our next question comes from Roger Spitz at Bank of America Merrill Lynch. Roger, please press star six to unmute your line. Thank you.

Great. Thank you very much for your time.

Thank you. Our next question comes from Frank Mitsch Fermium research. Thank you May know in line and ask your question. Thank you.

Speaker #2: Yeah . So obviously , we as we mentioned , we do not expect to spring the spring covenant on the US revolver . We are sitting with ample liquidity of 667 million .

Roger Spitz: Thank you and good morning. I just want to understand the updated guidance for either 2025 working capital outflow and 2025 free cash flow, or discuss the Q4 numbers. Because you've got, you said working capital is only a slight inflow, even though you're idling all these assets. Can you update us on either Q4 or full year 2025, both working capital as well as free cash flow?

Speaker #2: And so , you know , obviously the test is you have to draw 35% of revolver , which is 350 million . So right now we're undrawn on that revolver .

I mean my line yet.

Yes, we can hear you. Thank you Brian.

Speaker #2: And so we have significant cushion to get to that point . Several hundred millions of dollars .

Okay Alright, great.

I was close to saying something I should okay.

Okay.

Speaker #1: And when we think about all the actions that we're taking to preserve cash , you know , and you couple that with , you know , some of the positive things we're talking about on the market .

So I.

I want to come back to the.

Unanticipated headwinds on price for the fourth quarter.

Speaker #1: Again , I made reference that the market will recover . We think we're on the front end of that , but we're taking actions that we feel are prudent at this particular stage to make sure that we have cash and that all those things that John just referenced around , you know , a covenant is not triggered ever .

On both.

John Romano: I'll start and then I'll let John add on to it, but to be clear with the idling of the assets, obviously, it'll be a working capital gain for us on the Fuzhou facility. Slowing down Stallingborough and bringing forward maintenance will be a benefit, and also on the furnace, because that furnace actually was idled on 15 September 2025. We're just reporting that now. The West Mine, which is a significant process, again, we made reference that that's going to happen as we bring on East OFS. East OFS is starting commissioning on 17 November 2025, and as we finish that commissioning, we'll then bring that West Mine down. The West Mine, if you think about that particular asset, we had an East and a West Mine. East OFS is replacing the East Mine.

Two in zircon, so for Tio too.

It sounds like.

The competitive actions that youre seeing from liquidation.

Then as far as inventory.

Is is a large part of that.

And I was just curious as to and then also you would anticipate at some point in the future getting these duties put back on I'm, just curious from your perspective, assuming a normal coating season when Mike.

Speaker #1: So this is a process that we're in place . It's been a tough downturn , but we're taking actions that we need to take to manage the business through the long term .

Speaker #8: Great . Thank you very much for your time .

We see instead of unanticipated headwinds on price and anticipate a tailwind on price on tier two and then you also referenced <unk> zircon.

Speaker #3: Thank you . Our next question comes from Frank Mitsch at Birmingham Research . Frank , you may now unmute your line and ask your question .

More aggressive competitive dynamics can you please flush that out for us.

Speaker #3: Thank you .

Yes, thanks, Frank so on the <unk> side of it.

I'll be specific to the competitor that was liquidating inventory.

Speaker #9: I knew my line .

Speaker #3: Yep . We can hear you .

Speaker #10: Thank you . Frank . Oh , great . Oh , okay . All right . Great . I was close to saying something I shouldn't .

We werent responding to all of those <unk>.

<unk> liquidation events right.

Speaker #10: Okay . So I want to come back to the unanticipated headwinds on price for the fourth quarter on both TiO2 and zircon . So for TiO2 , you know , it sounds like the competitive actions that you're seeing from liquidation inventory is is a is a large part of that .

Definition, they were selling at prices that werent super attractive all that being said it created a lot of competitive environment others in the market we are bidding.

John Romano: The West Mine will continue to run and operate, but to preserve cash, we're idling that as soon as we bring on East OFS. East OFS is going to have that higher-grade heavy mineral concentrate that will become into the network as we referenced on the call. John, you want to add more?

Competitive activity was going on in second quarter to the third quarter. We made reference in the third quarter that we were going to regain our share.

And we were working towards that but the liquidation of the inventory is just a catalyst for more competitive activity I.

John Srivisal: Yeah, I think just to answer your question, I'll give you a little more details. Through year-to-date Q3, obviously, it was significant use on working capital and free cash flow, roughly $190 million use on working capital, and about over $300 million use in free cash flow. We mentioned that we were going to be positive both on free cash flow and working capital for Q4, so obviously, maintaining that and slight improvement over both. I do think you need to look at what happened in Q3 to understand what the drivers are in Q4. As John mentioned, we did have a lot of commercial impacts negatively, with the anti-dumping delays in India, with the Europe competitors' insolvency, and then competitive dynamic in China and rolling of shipment on zircon from Q3 to Q4. Now, obviously, that zircon shipment will help us in Q4.

I do believe that a lot of that inventory is going to work its way through the system before the end of the year, we're already starting to have discussions with customers about what 26 looks like because they want to be aligned with customers or with suppliers that are going to live beyond 'twenty six.

Speaker #10: And I was just curious as to and then also , you know , you would anticipate at some point in the future getting these duties put back on .

Speaker #10: I'm just curious from your perspective , assuming a normal coding season , when might we we see instead of unanticipated headwinds on price , unanticipated tailwinds on price on TiO2 , and then you also reference on zircon , more aggressive competitive dynamics .

So with the demand patterns that we're seeing right now and again.

In 24 and 25% in Q1, we saw these bump ups and then kind.

Fizzled out in Q2, and Q3 Q4 is a bit different we haven't seen a swing up like this with all the things that are going on that I referenced around kind of a restructuring of the industry that duties.

Speaker #10: Can you please flesh that out a little bit for us ?

Speaker #1: Yeah . Thanks , Frank . So on the TiO2 side of it , I'll be specific to the competitor that was liquidating inventory .

Speaker #1: We weren't responding to all of those liquidation events . Right . You know , by definition they were selling at prices that weren't super attractive .

Do think this is going to be a bit of a different recovery and with demand patterns like this.

If they continue as I mentioned our October sales.

Speaker #1: All that being said , it created a lot of competitive environment . Right ? Others in the market were being , you competitive activity was going on .

Are the largest sales month in the year equivalent to where we were in March.

We have a very good visibility in the November December.

Speaker #1: In second quarter . And the third quarter we made reference in the third quarter that we were going to regain some of our share , and we were working towards that .

Which would also indicate that a lot of the Destocking has already happened and we're getting back to normal demand patterns from our customers.

John Srivisal: We did have a tailing sale in Q3. Obviously, that went too, as that happened late in the quarter. We will collect on cash on that in Q4, so it should be an improvement quarter over quarter. All of that drove the fact that inventory was less of a reduction than we had expected, and not a significant source of cash. We will see recovery. Obviously, the volumes are much higher in Q4 on both TiO2 and zircon, much more muted than what we expected, as John mentioned, but still an increase. We will see some benefit from reduction in inventory. Just from an AP perspective, it was a pretty decent use in AP as well, as we did have restructuring charges of about $30 million in Q3 that will be lower in Q4.

Speaker #1: But the liquidation of the inventory is just a catalyst for more competitive activity . I do believe that a lot of that inventory is going to work its way through the system before the end of the year .

The next natural thing would be pricing going in the other direction and we are looking at that.

It wouldn't be before the first quarter, but that's something that we're looking at as far as zircon goes there was a lot of competitive activity theres been a fair amount of heavy mineral concentrate being mined from China.

Speaker #1: We're already starting to have discussions with customers about , what , 26 looks like , because they want to be aligned with customers or with suppliers that are going to live beyond 26 .

Other parts of Africa.

Speaker #1: So with the demand patterns that we're seeing right now and again in 24 and in 25 , in Q1 , we saw these bump ups and then kind of fizzled out in Q2 and Q3 .

Indonesia has now started to back off so prices have gotten to the point, where the Indonesian market, which is not huge at $60 to 70000 tons of zircon per year, but we're starting to see them back off on that Theres. Other mining projects that have been backed off on as I referenced earlier, so the zircon swing in Q3.

Speaker #1: Q4 is a bit different . We haven't seen a swing up like this with all the things that are going on that I referenced around , kind of the restructuring of the industry and the duties .

Q4.

Speaker #1: We do think this is going to be a bit of a different recovery , and with demand patterns like this , if they continue , as I mentioned , our October sales are the largest sales month in the year , equivalent to where we were in March .

Part of that had to do with the rolled shipment, but we're also seeing demand start to pick up the last call I made some reference around the rest of the world has kind of picked up a China had not done much we're starting to see.

John Srivisal: While driving lower purchases and lower CapEx drove higher AP, we will see that revert in Q4. All that being said is we do expect Q4 free cash flow and working capital to be more significant than Q3, but roughly flat.

I'd say the front end of a pickup in China as well, so maybe a little bit too early to call what.

Speaker #1: And we have a very good visibility into November and December , which would also indicate that a lot of the destocking has already happened .

What we might be seeing on pricing, but the demand pattern in the fourth quarter is encouraging on zircon.

Speaker #1: And we're getting back to normal demand patterns from our customers . So the next natural thing would be pricing going in the other direction .

Roger Spitz: Thank you so much for that. My follow-up is you said you do not expect to breach your revolver maintenance covenant in Q4. Would you be able to provide either the EBITDA and/or debt headroom at the end of Q3 under that covenant?

Okay. That's very helpful. Thanks, so much John.

Speaker #1: And we're looking at that . It wouldn't be before the first quarter , but that's something that we're looking at as far as zircon goes .

Thanks.

Hey, Shannon.

Our next question comes from Edward broker at Barclays.

Speaker #1: There was a lot of competitive activity . There's been a fair amount of heavy mineral concentrate being mined from China and other parts of Africa .

Please.

Except the prompt and ask your question.

Hey, Thanks for taking my question I think you are.

Speaker #1: Indonesia has now started to back off , so prices had gotten to the point where the Indonesian market , which is not huge , it's 60 to 70,000 tons of zircon per year .

John Srivisal: Yeah. Obviously, as we mentioned, we do not expect a spring covenant on the US revolver. We are sitting with ample liquidity of $667 million. The test is you have to draw 35% of our revolver, which is around $50 million. Right now, we're undrawn on that revolver, so we have significant cushion to get to that point, several hundred million dollars.

Sure.

Sort of mentioned it.

As youre going through the.

Cash flow implications of the idling of facilities, but are you able to provide the actual cash cost.

Speaker #1: But we're starting to see them back off on that . There's other mining projects that have been backed off on as I referenced earlier .

The idling of the <unk>.

Speaker #1: So the zircon swing in Q3 to Q4, part of that had to do with the rolled shipment. But we're also seeing demand start to pick up from the last call.

Ladies and furnaces and the closure of the mine.

Do you expect.

Well first off we're not closing of mine, we're idling the west mine. So we're just bringing it down.

Speaker #1: I made some reference around , you know , the rest of the world had kind of picked up at China , had not done much .

John Romano: When we think about all the actions that we're taking to preserve cash, you couple that with some of the positive things we're talking about on the market. Again, I made reference that the market will recover. We think we're on the front end of that, but we're taking actions that we feel are prudent at this particular stage to make sure that we have cash and that all those things that John just referenced around a covenant is not triggered ever. This is a process that we're in place. It's been a tough downturn, but we're taking actions that we need to take to manage the business through the long term.

We brought one furnace down at Aqua back furnace supplies.

Speaker #1: We're starting to see, I would say, the front end of a pickup in China as well. So maybe a little bit too early to call.

A lot of the slag that we consume so as we're not producing as much tier two we've idled. The furnace. We're idling the mine will bring that mine back up when the market recovers.

Speaker #1: What we might be seeing on pricing . But the demand pattern in fourth quarter is encouraging . On zircon .

And our cash generation are benefit from that idling.

Speaker #10: Okay . That's very helpful . Thanks so much , John .

Speaker #1: Thanks . Appreciate it .

In 2026 will largely depend on how long, we bring that down but there will be a cash positive impact input to that two.

Speaker #3: Our next question comes from Edward Brooker at Barclays . Edward , please accept the prompt and ask your question .

2020 for 2025 fourth quarter.

Collective.

Impact from an EBITDA perspective on bringing those assets down is $11 million I think that's really important so when you think about.

Roger Spitz: Great. Thank you very much for your time.

Speaker #11: Hey , thanks for taking my question . I think you're you're sort of mentioned it as you're going through the cash flow implications of the idling of the facilities , but are you able to provide the actual cash costs of the idling of the facilities and furnaces , and then the closure of the mine that you expect ?

John Srivisal: Thank you. Our next question comes from Frank Mitsch at Fermium Research. Frank, you may now unmute your line and ask your question. Thank you.

Foochow off the table right now.

We're running just north of 80% capacity utilization.

And if you recall when we were in the last downturn running our assets at low rates.

John Romano: Unmute my line.

John Srivisal: Yep, we can hear you. Thank you, Frank.

Fixed cost absorption numbers were costing us $25 million to $30 million a quarter and that did not include idling of mine. So I wanted to kind of translate that back to we talked about this cost improvement program. All the time, it's hard to see in the numbers, but when you think about that LCM or that.

John Romano: Oh, great. Okay. All right. Great. I was close to saying something I shouldn't. Okay. I want to come back to the unanticipated headwinds on price for the fourth quarter on both TiO2 and zircon. For TiO2, it sounds like the competitive actions that you're seeing from liquidation of Venator's inventory is a large part of that. I was just curious as to, and then also you would anticipate at some point in the future getting these duties put back on. I'm just curious from your perspective, assuming a normal coating season, when might we see instead of unanticipated headwinds on price, unanticipated tailwinds on price on TiO2? You also referenced on zircon more aggressive competitive dynamics. Can you please flesh that out a little bit for us? Yeah. Thanks, Frank. On the TiO2 side of it.

Speaker #1: Well , first off , we're not closing a mine . We're idling the West mine . So we're just bringing it down . As you know , we brought one furnace down at Namakwa .

Speaker #1: That furnace supply is a lot of the slag that we consume . So as we're not producing as much TiO2 , we've idled the furnace , we're idling the mine .

Fixed cost absorption hit we're taking in the quarter it only being $11 million has a lot to do with what we're seeing in the cost improvement program because we're running at similar rates, we brought our mind down but our costs have not gone down or have not been impacted as much. So John you want again, no I think just to be clear, though it's $11 million impact as John mentioned in Q.

Speaker #1: We'll bring that mine back up when the market recovers and our cash generation , our benefit from that idling in 2026 will largely depend on how long we bring that down .

Speaker #1: But there will be a cash positive impact input to that in 2024 , 2025 . Fourth quarter the collective impact from an EBITDA perspective on bringing those assets down is $11 million .

Four but that will be offset from a cash perspective by a positive <unk> $25 million to $30 million as we've mentioned so Q4 will be a positive from a free cash flow basis and it.

It is important to note that obviously, we do spend a lot of time, we said before we have a 30 year mine plan, but equally as important is really the hand off we have between mines.

Speaker #1: I think that's really important . So when you think about take off the table right now , we're running just north of 80% capacity utilization .

So the reason why we ran the last mine for longer little bit longer and didn't execute on that earlier in the year. It's really facilitated by the fact that our new east LFS minus coming online and so that's why you kind of see that bridge be much more.

Speaker #1: And if you recall , when we were in the last downturn running our assets at low rates , these fixed cost absorption numbers were costing us 25 to $30 million a quarter .

John Romano: I'll be specific to the competitor that was liquidating inventory. We weren't responding to all of those liquidation events, right? By definition, they were selling at prices that weren't super attractive. All that being said, it created a lot of competitive environment, right? Others in the market were being competitive. Activity was going on in the second quarter. In the third quarter, we made reference in the third quarter that we were going to regain some of our share, and we were working towards that. The liquidation of the inventory was just a catalyst for more competitive activity. I do believe that a lot of that inventory is going to work its way through the system before the end of the year.

Speaker #1: And that did not include idling a mine. So this, I want to kind of translate that back to... We talk about this cost improvement program all the time.

Cost effective than you would have had you just had a sharp cut off of that mine.

Speaker #1: It's hard to see the numbers, but when you think about that LCM or that fixed cost absorption hit, we're taking in the quarter and only being $11 million. This has a lot to do with what we're seeing in the cost improvement program because we're running at similar rates.

Got it.

And just my next question.

Can you dive a little further into why you feel so confident that India.

We will reinstate those duties and then if they don't are there any contingency plans for that region.

Speaker #1: We brought a mine down , but our costs have not gone down or have not been impacted as much . So , John , you want to .

Well I'll start off with the last question.

Speaker #2: Yeah . No , I think , you know , just to be clear though , it's $11 million impact . As John mentioned in Q4 .

<unk> is the second largest country that we sell into we have currently at 10% duty advantage, because we're supplying India out of Australia and is a free trade agreement between Australia and India.

John Romano: We're already starting to have discussions with customers about what 2026 looks like because they want to be aligned with customers or with suppliers that are going to live beyond 2026. With the demand patterns that we're seeing right now, in 2024 and in 2025, in Q1, we saw these bump-ups and then kind of fizzled out in Q2 and Q3. Q4 is a bit different. We haven't seen a swing up like this with all the things that are going on that I referenced around the restructuring of the industry and the duties. We do think this is going to be a bit of a different recovery. With demand patterns like this, if they continue, as I mentioned, our October sales are the largest sales month in the year, equivalent to where we were in March.

Speaker #2: But that will be offset from a cash perspective by a positive 25 to 30 million . As we mentioned . So net Q4 will be a positive from a free cash flow basis .

So it's still upside for us even with.

Speaker #2: And , you know , it was important to note that , you know , obviously , we do spend a lot of time we've said before , we have a 30 year mine plan , but equally as important is really the hand we have between mines .

India supply or the Chinese at the peak they were buying Thats, a 450000 ton per year market 300000 tons per year were being supplied by China. We were still growing in that market. It's still our second largest market. So the contingency would be it's going to be slower growth, but we will continue to grow we have again.

Speaker #2: And so the reason why we ran the West Mine for a bit longer and didn't execute on that earlier in the year is really facilitated by the fact that our new East Mine is coming online.

We're not a producer in that region, but we've been actively engaged in discussions with the government. So we havent good window into what's going on at the <unk>, We do believe those.

Speaker #2: And so that's why you kind of see that bridge be much more cost effective than you would have had . You just had a sharp cut off of that mine .

We believe there'll be an answer sometime towards the end of the year and it's our belief at this particular stage that's going to be a positive one.

Speaker #11: Got it . And just my next question , can you dive a little further into why you feel so confident that India will reinstate those duties ?

John Romano: We have very good visibility into November and December, which would also indicate that a lot of the destocking has already happened, and we're getting back to normal demand patterns from our customers. The next natural thing would be pricing going in the other direction, and we're looking at that. It wouldn't be before the first quarter, but that's something that we're looking at. As far as zircon goes, there was a lot of competitive activity. There's been a fair amount of heavy mineral concentrate being mined from China and other parts of Africa. Indonesia has now started to back off. Prices have gotten to the point where the Indonesian market, which is not huge—it's 60,000 to 70,000 tons of zircon per year—but we're starting to see them back off on that.

Can't provide any more color other than that but we're pretty confident in it and in the absence of it I think we still have a growth model.

Speaker #11: And then if they don't , are there any contingency plans for the region ?

Thanks, a lot.

Speaker #1: Well , I'll start off with the last question . India is the second largest country that we sell into . We have currently a 10% duty advantage because we're supplying India out of Australia , and there's a free trade agreement between Australia and India .

Thank you. Our final question comes from Hassan Ahmed of Alembic Global.

I assume you May know Prescott six to meet your line. Thank you.

Good morning, John.

A question around in the press release, you guys mentioned $1 1 million tons.

Speaker #1: So it's still upside for us , even with India supplying the Chinese . At the peak , they were buying . That's a 450,000 tonne per year market .

Tier two capacity being shut it in 2023, so a.

Speaker #1: 300,000 tonnes per year were being supplied by China . We were still growing in that market . It's still our second largest market .

Specific question around I'm, sorry, involution in China in particular, I mean, if my understanding is correct.

John Romano: are other mining projects that have been backed off on, as I referenced earlier. The zircon swing in Q3 to Q4, part of that had to do with the rolled shipment, but we're also seeing demand start to pick up. The last call I made some reference around the rest of the world had kind of picked up, but China had not done much. We're starting to see, I would say, the front end of a pickup in China as well. Maybe a little bit too early to call what we might be seeing on pricing, but the demand pattern in fourth quarter is encouraging on zircon. Okay. That's very helpful. Thanks so much, John. Thanks. Appreciate it.

Speaker #1: So the contingency would be it's going to be slower growth , but we'll continue to grow . We have again , we're not a producer in that region , but we've been actively engaged in discussions with the government .

China has probably around 50.

Activities.

This guidance is 20 of those are quite subscale, 50000 tons or less and quite uneconomic.

Speaker #1: So we have good window into what's going on at the DGR . We do believe those . We believe there will be an answer sometime towards the end of the year , and it's our belief that this particular stage that's going to be a positive one can't provide any more color other than that .

So if I would just sort of bundle all of those 20 subscale facility is up I would say that's roughly around 700000 tons of capacity. So how are you thinking about that capacity is that vulnerable are you guys hearing something about <unk>.

Speaker #1: But we're pretty confident in it, and in the absence of it, we still have a growth model.

He goes around that and sort of generally what are you guys hearing about anchor evolution.

Speaker #11: Thanks a lot .

Yeah. Thanks Hassan it's a great question and just to be clear.

Speaker #3: Thank you . Our final question comes from Hassan Ahmed at Global Hassan . You may now press star six to unmute your line .

John Srivisal: Our next question comes from Edward Brooker at Barclays. Edward, please accept the prompt and ask your question.

Of that 11, $1 1 million tons of capacity is from 2023 to the current date.

Speaker #3: Thank you .

And again, we've correct I believe that the majority of that is offline. There were some Chinese plants included in that were not including our idling of our plant, but we have heard that there are other plants that are looking at being idled and the real question is do they go out permanently or do they bring them down for short periods of time, but I would.

Speaker #12: Morning , John . You know a question around in the press release . You guys mentioned 1.1 million tons of tier two capacity being shuttered since 2023 .

Jennifer Guenther: Hey, thanks for taking my question. I think you sort of had mentioned it as you're going through the cash flow implications of the idling of the facilities. Are you able to provide the actual cash costs of the idling of the facilities and furnaces, and then the closure of the mine that you expect?

Speaker #12: So a specific question around anti involution and China in particular , I mean , if my understanding is correct , you know , China has probably around 50 TiO2 facilities , my understanding is 20 of those are quite subscale , 50,000 tons or less .

Spect that theres going to be some kind of consolidation in that capacity.

Look we're going to have to continue to compete with.

John Romano: Well, first off, we're not closing a mine. We're idling the West Mine, so we're just bringing it down. We brought one furnace down at Namaqua. That furnace supplies a lot of the slag that we consume. As we're not producing as much TiO2, we've idled the furnace. We're idling the mine. We'll bring that mine back up when the market recovers. Our cash generation, our benefit from that idling in 2026, will largely depend on how long we bring that down, but there will be a cash positive input to that. In 2025, fourth quarter, the collective impact from an EBITDA perspective on bringing those assets down is $11 million. I think that's really important. When you think about it, take Fuzhou off the table right now. We're running just north of 80% capacity utilization.

Likes of <unk> billion.

On the long term that's why these duties, albeit not.

Speaker #12: And quite uneconomic. So if I were to sort of bundle all of those 20 subscale facilities up, I'd say that's roughly around 700,000 tonnes of capacity.

Maybe they are not permanent duties typically last five years with a five year sunset that typically follows that so that's why all of our focus has to be on how we become more cost efficient and the traction that we're getting around cost. So that we have a long term sustainable plan to be competitive no matter, where we're selling the product but I.

Speaker #12: So how are you thinking about that capacity . Is that vulnerable ? Are you guys hearing something about closures around that . And sort of generally what are you guys hearing about anti involution .

Do believe well look at it.

Speaker #1: Yeah thanks . It's a great question . And just to be clear , you know that 11 1.1 million tonnes of capacity is from 2023 to the current date .

Our China plant.

Its our lowest cost plant in our entire system, but.

But the market in China is the lowest priced market and it's more competitive today, because that 800000 tons that historically was exported outside into other regions of the market you've got fewer markets for that material to move into all the other areas that are non duty affected are largely.

Speaker #1: And again we correct our belief that the majority of that is offline . There were some Chinese plants included in that . We're not including , you know , our idling of our plant , but we have heard that there are other plants that are looking at being idled .

Saturated with Chinese material anyway, So I would agree with you it will be a matter of time, it's one of those things where.

Speaker #1: And the real question is , do they go off permanently or do they bring them down for short periods of time ? But I would expect that there's going to be some kind of consolidation in that capacity .

John Romano: If you recall, when we were in the last downturn running our assets at low rates, these fixed cost absorption numbers were costing us $25 to $30 million a quarter. That did not include idling a mine. I want to kind of translate that back to we talk about this cost improvement program all the time. It's hard to see in the numbers, but when you think about that LCM or that fixed cost absorption hit we're taking in the quarter at only being $11 million, it has a lot to do with what we're seeing in the cost improvement program. Because we're running at similar rates, we brought a mine down, but our costs have not gone down or have not been impacted as much. John, you want to.

You would've thought it would've happened earlier I think a lot of those are state owned or Smes, where theyre getting subsidies, we don't get subsidies in our Chinese facility. So again, we've idled that for the right reasons and will determine how long that's down based on the current market, but I would agree that that's that's not what you just.

Speaker #1: Look , we're going to have to continue to compete with the likes of Loman , billion on the long term . That's why these duties , albeit not maybe they're not permanent duties .

Speaker #1: Typically last five years with a five year sunset that typically follows that . So that's why all of our focus has to be on how we become more cost efficient .

<unk> is not fully baked into the 100 times thats already been brought offline and in a down cycle that flaccid mountain three and a half years Ive never seen ive never seen in my almost 40 years anything like that amount of capacity reduction.

Speaker #1: And the traction that we're getting around costs so that we have a long term sustainable plan to be competitive no matter where we're selling the product .

Speaker #1: But I do believe , look , you know , our China plant is one it's our lowest cost plant in our entire system .

Maybe 25% of that historically as what you'd see in a downturn of normally what happens some market goes down and right before people start closing plants. There is a recovery and this one has been longer than any other one in every competitor as idled or closed the plant.

John Srivisal: Yeah. No, I think just to be clear, though, it's an $11 million impact, as John mentioned in Q4, but that will be offset from a cash perspective by a positive $25 to 30 million, as we've mentioned. Net Q4 will be a positive from a free cash flow basis. It was important to note that obviously, we do spend a lot of time. We've said before we have a 30-year mine plan, but equally as important is really the handoff we have between mines. The reason why we ran the West Mine for a little bit longer and didn't execute on that earlier in the year is really facilitated by the fact that our new East OFS Mine is coming online. That's why you kind of see that bridge be much more.

Speaker #1: But the market in China is the lowest price market . And it's more competitive today because that 800,000 tonnes that historically was exported outside into other regions of the market , you've got fewer markets for that material to move into .

Speaker #1: All the other areas that are non duty affected are largely saturated with Chinese material anyway . So I would agree with you . It'll be a matter of time .

Very helpful, John and as a follow up I wanted to revisit.

The India anti dumping side of things.

I know.

Speaker #1: It's one of those things where you know, you would have thought it would have happened earlier. I think a lot of those are state-owned or SOEs where they're getting subsidies.

Things are still sort of.

You know <unk> and the like but my understanding is that.

Speaker #1: We don't get subsidies . And our Chinese facility . So again , you know , we've idled that for the right reasons . And we'll determine , know how long that's down based on the current market conditions .

Okay.

The sort of overturning by the courts of the anti dumping duties actually didn't have much to do with the KOL as agents of why those antidumping duties were sort of levied in the first place, but it was far more procedural I mean again my understanding is that you know the Indian Banks Association.

John Srivisal: Cost-effective than you would have had you just had a sharp cutoff of that mine.

Speaker #1: But I would agree with you that that's that's not what you just described is not fully baked in to the , you know , 1100 tonnes that's already been brought offline .

Jennifer Guenther: Got it. Just my next question. Can you dive a little further into why you feel so confident that India will reinstate those duties? If they don't, are there any contingency plans for the region?

Speaker #1: And , and a down cycle that's lasted now three and a half years . You've never seen I've never seen in my almost 40 years anything like that amount of capacity reduction .

Yes.

Came out and said Hey look certain details would not shared with us.

And they were shared with other parties.

We need to be.

Far more procedural than really why they were imposed in the first place is that what actually gives you confidence that they may be levied again.

Speaker #1: It's maybe 25% of that historically is what you'd see in the downturn . And normally what happens some markets goes down and right before people start closing plants , there's a recovery .

John Romano: Well, I'll start off with the last question. India is the second largest country that we sell into. We have currently a 10% duty advantage because we're supplying India out of Australia, and there's a free trade agreement between Australia and India. It's still upside for us. Even with India supplying the Chinese at the peak, they were buying, that's a 450,000-ton-per-year market. 300,000 tons per year were being supplied by China. We were still growing in that market. It's still our second largest market. The contingency would be it's going to be slower growth, but we'll continue to grow. Again, we're not a producer in that region, but we've been actively engaged in discussions with the government, so we have a good window into what's going on at the DGTR. We do believe there'll be an answer sometime towards the end of the year.

Well, that's exactly right I Couldnt restate it any more clearly than you just did there was a procedural error and we believe that the data that they didn't get has been submitted.

Speaker #1: And this one has been longer than any other one. And every competitor has idled or closed the plant.

Central correction will be done and the division will go back into place so.

Speaker #12: Very helpful John . And as a follow up I wanted to revisit the India anti-dumping side of things . You know , I know you know , things are still sort of , you know , transient and the like , but my understanding is that , you know , the , the sort of overturning by the courts of the Anti-Dumping duties actually didn't have much to do with the cause , agents of why those anti-dumping duties were sort of levied in the first place .

I can't state what you stated any mark clearly the right answer.

Very helpful. John Thank you so much.

Thank you.

Thank you Sir there are no further questions today, So I will now hand, the call back over to John Mcmanus for closing remarks. Thank you John.

Thank you very much and we appreciate you joining the call.

Look I.

I do believe that we are clearly it's been a challenging three and a half years.

Speaker #12: But it was far more procedural . I mean , again , my understanding is that , you know , the Indian paints Association , you know , came out and said , hey , look certain details were not shared with us .

But we're pretty optimistic on the things that we're doing around self help the duties are.

John Romano: It's our belief at this particular stage that that's going to be a positive one. Can't provide any more color other than that, but we're pretty confident in it. In the absence of it, we still have a growth model.

A lot of that work was hard work that we initiated.

A lot of the work that we're doing on the cost improvement program. I gave you a lot of details on that it's not just things we're talking about it's things that our operational teams are weaving into the work that we do every single day, just like safety as a priority cost improvement and maintaining those cost improvements and be competitive long term is something that we will continue to do for the long.

Speaker #12: And they were shared with other parties . So those need to be , you know , so it was far more procedural than really why they were imposed in the first place .

Jennifer Guenther: Thanks a lot.

John Srivisal: Thank you. Our final question comes from Hassan Ahmed at Alembic Global. Hassan, you may now press star six to unmute your line. Thank you.

Speaker #12: Is that what actually gives you confidence that they may be levied ? Again .

Speaker #1: Well , that's exactly right . I couldn't restate it any more clearly than you just did . It was a procedural error . We believe that the data that they didn't get has been submitted .

Justin Pellegrino: Morning, John. A question around, in the press release, you guys mentioned 1.1 million tons of TiO2 capacity being shuttered since 2023. A specific question around anti-involution and China in particular. I mean, if my understanding is correct, China has probably around 50 TiO2 facilities. My understanding is 20 of those are quite subscale, 50,000 tons or less, and quite uneconomic. If I were to sort of bundle all of those 20 subscale facilities up, I'd say that's roughly around 700,000 tons of capacity. How are you thinking about that capacity? Is that vulnerable? Are you guys hearing something about closures around that? Generally, what are you guys hearing about anti-involution?

Term and our team has done an outstanding job of implementing those programs and lifting and shifting them from one site to the other so I'm feeling really good and that's largely on the back of all the work that our team has done to get us to where we are today. So we will look forward to updating you again throughout the quarter and next quarter. So thank you very much.

Speaker #1: The procedural correction will be done and the duties will go back into place . So I can't state what you stated any more .

Speaker #1: Clearly , the right answer . .

Speaker #12: Very helpful John . Thank you so much .

Speaker #1: Thank you .

Speaker #3: Thank you . So there are no further questions today . So I will now hand the call back over to John Romano for closing remarks .

This concludes today's call. Thank you for joining and have a great day.

Speaker #3: Thank you . John .

Speaker #1: Thank you very much . And we appreciate you joining the call . Look , I do believe that we are clearly it's been a challenging three and a half years , but we're pretty optimistic on the things that we're doing around self-help .

Speaker #1: The duties are you know , a lot of that work was hard work that we initiated a lot of the work that we're doing on the cost improvement program .

Speaker #1: I gave you a lot of details on that . It's not just things we're talking about . It's things that are operational . Teams are weaving into the work that we do every single day , just like safety is a priority , cost improvement and maintaining those cost improvements and being competitive long term is something that we will continue to do for the long term .

John Romano: Yeah, thanks, Hassan. It's a great question. Just to be clear, that 11.1 million tons of capacity is from 2023 to the current date. Again, we.

Justin Pellegrino: Correct.

John Romano: Believe that the majority of that is offline. There were some Chinese plants included in that. We're not including our idling of our plant. We have heard that there are other plants that are looking at being idled. The real question is, do they go off permanently, or do they bring them down for short periods of time? I would expect that there's going to be some kind of consolidation in that capacity. Look, we're going to have to continue to compete with the likes of Lomon Billions on the long term. That's why these duties, albeit not, maybe they're not permanent. Duties typically last five years, with a five-year sunset that typically follows that.

Speaker #1: And our team has done an outstanding job of implementing those programs and lifting and shifting them from one side to the other . So I'm feeling really good , and that's largely on the back of all the work that our team has done to get us to where we are today .

Speaker #1: So we'll look forward to updating you again throughout the quarter and next quarter . So thank you very much .

John Romano: That's why all of our focus has to be on how we become more cost-efficient and the traction that we're getting around cost, so that we have a long-term sustainable plan to be competitive no matter where we're selling the product. I do believe, look, our China plant is our lowest-cost plant in our entire system. The market in China is the lowest-priced market, and it's more competitive today because that 800,000 tons that historically was exported outside into other regions of the market, you've got fewer markets for that material to move into. All the other areas that are non-duty affected are largely saturated with Chinese material anyway. I would agree with you. It'll be a matter of time. It's one of those things where you would have thought it would have happened earlier.

John Romano: I think a lot of those are state-owned or SOEs where they're getting subsidies. We don't get subsidies in our Chinese facilities. Again, we've idled that for the right reasons, and we'll determine how long that's down based on the current market conditions. I would agree with you that what you just described is not fully baked into the 1,100 tons that's already been brought offline. In a down cycle that's lasted now three and a half years, you've never seen, I've never seen in my almost 40 years, anything like that amount of capacity reduction. Maybe 25% of that historically is what you'd see in a downturn. Normally what happens is the market goes down, and right before people start closing plants, there's a recovery.

John Romano: This one has been longer than any other one, and every competitor has idled or closed a plant.

Justin Pellegrino: Very helpful, John. As a follow-up, I wanted to revisit the India anti-dumping side of things. I know things are still sort of transient and the like, but my understanding is that the sort of overturning by the courts of the anti-dumping duties actually did not have much to do with the cause agents of why those anti-dumping duties were sort of levied in the first place, but it was far more procedural. I mean, again, my understanding is that the Indian Paints Association came out and said, hey, look, certain details were not shared with us, and they were shared with other parties, so those need to be. It was far more procedural than really why they were imposed in the first place. Is that what actually gives you confidence that they may be levied again?

John Romano: That's exactly right. I couldn't restate it any more clearly than you just did. It was a procedural error. We believe that the data that they didn't get has been submitted. The procedural correction will be done, and the duties will go back into place. I can't state what you stated any more clearly. It's the right answer.

Justin Pellegrino: Very helpful, John. Thank you so much.

John Romano: Thank you.

John Srivisal: Thank you. There are no further questions today. I'll now hand the call back over to John Romano for closing remarks. Thank you, John.

John Romano: Thank you very much, and we appreciate you joining the call. I do believe that we are clearly, it's been a challenging three and a half years, but we're pretty optimistic on the things that we're doing around self-help. The duties. A lot of that work was hard work that we initiated. A lot of the work that we're doing on the cost improvement program, I gave you a lot of details on that. It's not just things we're talking about. It's things that our operational teams are weaving into the work that we do every single day. Just like safety is a priority, cost improvement, and maintaining those cost improvements, and being competitive long-term is something that we will continue to do for the long term.

John Romano: Our team has done an outstanding job of implementing those programs and lifting and shifting them from one site to the other. I'm feeling really good, and that's largely on the back of all the work that our team has done to get us to where we are today. We'll look forward to updating you again throughout the quarter and next quarter. Thank you very much.

John Srivisal: This concludes today's call. Thank you for joining, and have a great day.