Half Year 2026 Nickel Industries Ltd Earnings Call

August 26, 2026

Operator 1: Hello, and welcome to the Nickel Industries Limited 2026 H1 results call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star 1 on your telephone keypad. If you would like to withdraw your question, just simply press star 1 again. We will now turn the conference over to Justin Werner, Managing Director. Please go ahead.

Operator: Hello, and welcome to the Nickel Industries Limited 2026 H1 Results Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star one on your telephone keypad. If you would like to withdraw your question, just simply press star one again. We will now turn the conference over to Justin Werner, Managing Director. Please go ahead.

Speaker #1: After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star 1 on your telephone keypad.

Speaker #1: If you would like to withdraw your question, simply press star 1 again. I will now turn the conference over to Justin Werner, Managing Director.

Speaker #1: Please go ahead.

Speaker #2: Thank you, everyone, and welcome to the Half-Year Results Presentation. I forgot—just to ask the moderator to move to the next slide, please. We'll start with Safety and ESG.

Justin Werner: Thank you everyone, and welcome to the H1 results presentation. If I could just ask the moderator to move to the next slide, please. Start with safety and ESG. Zero 12-month LTIFR, 0.45 12-month TRIFR, so these are world-class safety figures. 18 million safe man-hours worked over the past 12 months. In terms of ESG, once again, we were awarded the Green PROPER rating from the Indonesian Ministry of Environment and Forestry, one of only 3 nickel mining companies to achieve that rating. We entered into an agreement to look at feasibility of natural hydrogen in and around the Hengjaya mining lease, which could offer potentially a low-cost, clean energy source in the future. We inaugurated 197 hectare biodiversity conservation area, a short distance from the Hengjaya Mine, and again, one of very few mines to have successfully been able to inaugurate a biodiversity area.

Justin Werner: Thank you everyone, and welcome to the H1 results presentation. If I could just ask the moderator to move to the next slide, please. Start with safety and ESG. 0 12-month LTIFR, 0.45 12-month TRIFR, so these are world-class safety figures. 18 million safe man-hours worked over the past 12 months. In terms of ESG, once again, we were awarded the Green PROPER rating from the Indonesian Ministry of Environment and Forestry, one of only three nickel mining companies to achieve that rating. We entered into an agreement to look at feasibility of natural hydrogen in and around the Hengjaya mining lease, which could offer potentially a low-cost, clean energy source in the future. We inaugurated 197-hectare biodiversity conservation area, a short distance from the Hengjaya Mine, and again, one of very few mines to have successfully been able to inaugurate a biodiversity area.

Speaker #2: Zero 12-month LTIFR. 0.45 12-month TRIFR. So, these are world-class safety figures. 18 million safe man-hours worked over the past 12 months. In terms of ESG, once again, we were awarded the Green PROPER Rating from the Indonesian Ministry of Environment and Forestry.

Speaker #2: We are one of only three nickel mining companies to achieve that rating. We entered into an agreement to look at the feasibility of natural hydrogen in and around the Hengjaya mining lease.

Speaker #2: Which could offer a potentially low-cost clean energy source in the future. We inaugurated a 197-hectare biodiversity conservation area a short distance from the Hengjaya mine and—again—one of very few mines to have successfully been able to inaugurate a biodiversity area.

Justin Werner: The scholarship program continues to progress very well. We now have 30 students actively enrolled in a number of disciplines. Finally, on the CSR side, we received CSR awards for excellence in community development. We also won awards for some of our RKEF operations at the HR Asia awards. If we could just move to the next slide, H1 summary. Very solid results from the existing business prior to any contribution from commissioning of the ENC project. If you could just move to the next slide, please. Group operations and corporate highlights. USD 247.6 million of adjusted EBITDA, up 46% from the same time last year. We also announced the 1.3 billion Sampala valuation in return for a share swap. Sorry, if you could go back a slide, please.

Justin Werner: The scholarship program continues to progress very well. We now have 30 students actively enrolled in a number of disciplines. Finally, on the CSR side, we received CSR awards for excellence in community development. We also won awards for some of our RKEF operations at the HR Asia Awards. If we could just move to the next slide, H1 summary. Very solid results from the existing business prior to any contribution from commissioning of the ENC project. If you could just move to the next slide, please. Group operations and corporate highlights. USD 247.6 million of adjusted EBITDA, up 46% from the same time last year. We also announced the 1.3 billion Sampala valuation in return for a share swap. Sorry, if you could go back a slide, please.

Speaker #2: The scholarship program continues to progress very well. We now have 30 students actively enrolled in a number of disciplines. And then, finally, on the CSR side, we received CSR awards for excellence in community development.

Speaker #2: And we also won awards for some of our RKEF operations at the HR Asia Awards. We could just move to the next slide—half-year summary.

Speaker #2: Very solid results from the existing business, prior to any contribution from commissioning of the ENC project. If you could just move to the next slide, please.

Speaker #2: Group operations and corporate highlights: US$247.6 million of adjusted EBITDA, up 46% from the same time last year. We also announced the $1.3 billion San Paolo valuation in return for a share swap. Sorry, if you could go back a step, please.

Justin Werner: In return for a share swap in the CNE HPAL, which I will talk about a little bit later on. We also announced the 1 billion wet metric ton resource at our Sampala project, so that is a world-class resource. At our mine operations, adjusted EBITDA of USD 73.4 million, up 4% on the same period last year. Although, and I will talk about this a little bit later on, expect to see a significantly increased EBITDA from the mine off the back of a change in HPM pricing. 5.9 million metric tons of ore sales, so it is on track the same as last year, but we are ramping up towards the back end of this year with ENC commissioning and I will touch on that a little bit later. EBITDA per ton margins from the mine were $12.40, and that was also up 5%.

Speaker #2: In return for a share swap in the C and PAL—which I'll talk about a little bit later on—we also announced the 1 billion wet metric ton resource.

Speaker #2: At our San Paolo project—so that is a world-class resource. At our mine operations, adjusted EBITDA was US$73.4 million, up 4% on the same period last year.

Speaker #2: Although, and I'll talk about this a little bit later on, expect to see a significantly increased EBITDA from the mine off the back of a change in HPM pricing.

Speaker #2: 5.9 million wet metric tons of oil sales, so on track, same as last year, but we are ramping up towards the back end of this year with ENC commissioning, and I'll touch on that a little bit later.

Speaker #2: EBITDA per ton margins from the mine were $12.40, and that was also up 5%. Where we see the majority of the improvement in this half was really from our NPI business.

Justin Werner: Where we see the majority of the improvement in this H1 was really from our NPI business. Adjusted EBITDA of USD 146.7 million, up 87%. In terms of nickel sales, they were down slightly. That was in relation to some plant maintenance that was undertaken at ANI and ONI, which are really our two major NPI producers. These results were really driven by a strengthening NPI price, which was $13,784 per ton for the H1, which is up 21% on the same time last year. Then finally, HPAL performed very well the H1 of this year. Adjusted EBITDA from our 10% interest in HNC was USD 35.2 million, up 31% from the same time the previous year. We were pleased to announce our maiden dividend distribution of USD 3.5 million. Then moving to ENC.

Speaker #2: Adjusted EBITDA was $146.7 million, up 87%. In terms of nickel sales, they were down slightly. That was in relation to supply and maintenance that was undertaken at ANI and ONI, which are really our two major NPI producers.

Speaker #2: And then we've had these results, which were really driven by a strengthening NPI price, which was $13,784 per ton for the half, up 21% on the same time last year.

Speaker #2: And then finally, HPL performed very well in the first half of this year. Adjusted EBITDA from our 10% interest in HNC was US$35.2 million, up 31% from the same time the previous year.

Speaker #2: And we're pleased to announce our maiden dividend distribution of $3.5 million US. And then, moving to ENC, a tremendous milestone of first MHP production in July, followed not too shortly afterwards by first COD in August.

Justin Werner: Tremendous milestone of first MHP production in July, followed not too shortly afterwards by first cathode in August. If we could just move to the next slide. Looking at the P&L and adjusted EBITDA. The real drivers of that significant improvement, 46% improvement in EBITDA, was the nickel pig iron price, mentioned up 21% to $13,784, and as of today, it continues to strengthen past $14,000 a ton. The LME price has also risen significantly, up 15%, an average $17,700 for the H1 of this year. We were one of a very small number of companies that was able to increase our RKAB quota from 9 million last year to 14.3 million this year. That will drive some continued improved EBITDA. Then we have seen at the mine more recently, changes in the ore price, which are flowing through to very strong margins at the Hengjaya Mine.

Speaker #2: If we could just move to the next slide. Looking at the P&L and adjusted EBITDA, the real drivers of that significant improvement—a 46% improvement in EBITDA—was the nickel pig iron price.

Speaker #2: Mentioned up 21% to $13,784. And as of today, it continues to strengthen past $14,000 a ton. The LME price has also risen significantly, up 15%.

Speaker #2: An average of 17,700 for the first half of this year. We were able, and we were one of a very small number of companies that was able, to increase our RKEB quota from 9 million last year to 14.3 million this year.

Speaker #2: And that will drive some continued, improved EBITDA. And then we've seen, at the mine more recently, changes in the oil price, which are flowing through to very strong margins at the mine.

Speaker #2: And resilient NPI production. So despite the maintenance that I mentioned, we were fairly much similar to last year. If we could just go to the next slide, please.

Justin Werner: Resilient NPI production. So despite the maintenance that I mentioned, we were fairly much similar to the last year. If we could just go to the next slide, please. I will hand over to Chris just to talk through the balance sheet and the next important falls.

Speaker #2: I'll hand over to Chris just to talk through the balance sheet and the next steps forward for us.

Speaker #3: Yeah, thank you, Justin. Morning, everybody. On the balance sheet, the key balance sheet movements between December and June—so 31 December and 30 June.

Chris Shepherd: Yeah. Thank you, Justin. Morning, everybody. On the balance sheet, the key balance sheet movements between December and June, so 31 December and 30 June, USD 240 million was related to the Sphere transaction. So we had a USD 239 million receivable as at 31 December and a USD 240 million payable to Decent. That is in relation to the 10% interest in ENC that Sphere invested. Those receivables and payables have obviously been received during the period. So that is the main reason for the movement in current liabilities and assets. Net debt of USD 980 million or USD 982 million as at 30 June.

Speaker #3: $240 million US was related to the Sphere transaction. So we had a $239 million receivable as at 31 December and a $240 million payable to Decent.

Speaker #3: That's in relation to the 10% interest in ENC that Sphere invested. Those receivables and payables have obviously been received during the period, so that is the main reason for the movement in the current liabilities and assets.

Speaker #3: Net debt of $980 million or $982 million as at 30 June. Importantly, for our covenants, that puts us at about a 2.3 times leverage ratio, which is within our 3.5 times max covenant, post our recent refinancing.

Chris Shepherd: Importantly, for our covenants, that sits us at about a 2.3x leverage ratio, which is within our 3.5x max covenant post our recent refinancing of our bank loans. If the leverage stays at that level at 2.3x, our margin over SOFR will fall from 3.5% to 2.5% by the end of this year, which effectively reduces our cost of debt from the current 7.1% under the bank loans to 6.1%. Can we move to the next slide, please? We have just set out the profit and adjusted EBITDA reconciliations here on the chart on the left-hand side.

Speaker #3: Of our bank loans: if the leverage stays at that level, at 2.3 times, our margin over SOFR will fall from 3.5% to 2.5%.

Speaker #3: By the end of this year, which effectively reduces our cost of debt from the current 7.1% under the bank loans to 6.1%. Can we move to the next slide, please?

Speaker #3: We've got our profit, and we'll just set out the profit and adjusted EBITDA reconciliations here. On the chart on the left-hand side, you can see the contribution from the three core businesses.

Chris Shepherd: You can see the contribution from the three core businesses, the RKEF business of USD 147 million, the HPAL business of USD 35 million, and so that is HNC and Sing Creation, our trading entity, and USD 73 million from Hengjaya Mine. The total being there of USD 255 million from operations. There is USD 7.6 million of NIC overheads to get us to our final USD 247 million of adjusted EBITDA for the H1 of 2026. On the right-hand side, we then provide the bridge from adjusted EBITDA to profit, and we can see the key items being obviously the USD 80 million D&A, USD 29 million in taxes. Our net finance costs are just under USD 50 million, and then some FX-related charges of just under USD 16 million to give us our NPAT for the H1 of 2026 of USD 74 million.

Speaker #3: The RKF business of $147 million, the HPL business of $35 million, and so that's HNC and Syncreation, our trading entity. And $73 million from Hengye Mine.

Speaker #3: $73 million from Hengye Mine, with the total being $255 million from operations. There's $7.6 million of nickel overheads, which brings us to our final $247 million of adjusted EBITDA for the first half of 2026.

Speaker #3: On the right-hand side, we then provide the bridge from adjusted EBITDA to profit, and we can see the key items being, obviously, the $80 million D&A, $29 million in taxes, our net finance costs are just under $50 million, and then some FX-related charges of just under $16 million, to give us our impact for the first half of 2026 of $74 million.

Speaker #3: Can we move to the next slide, please? On the cash flow waterfall, the three key items—we've got $65 million of cash flow.

Chris Shepherd: Can we move to the next slide, please? On the cash flow waterfall, the three key items, we have USD 65 million of cash flow. You can see that on the right-hand chart, the first two columns, the USD 77.5 operating cash flow less the CapEx of USD 12 million. That is what we say our cash flow prior to any growth in debt. Our higher earnings were, as we have mentioned, show they are partly absorbed by an increase in nickel ore stockpiles of approximately USD 30 million. That primarily relates to limonite as we are preparing for the ongoing commissioning of ENC. Taxes and royalties paid and then a decrease in trade payables of approximately USD 40 million across the half year. We have had growth spend of USD 137 million throughout the H1 of the year.

Speaker #3: You can see that on the right-hand chart, the first two columns, the 77.5 operating cash flow less the capex of $12 million—that's what we say is our cash flow prior to any growth in debt.

Speaker #3: Our higher earnings were partly, as we've mentioned, they were partly absorbed by an increase in nickel ore stockpiles of approximately $30 million.

Speaker #3: But primarily relates to limonite, as we are preparing for the ongoing commissioning of ENC, taxes and royalties paid, and then a decrease in trade payables of approximately $40 million across the half year.

Speaker #3: We've had growth spend of $137 million throughout the first half of the year. $46 million of that was for our final ENC payment for our final 2% to take us from 44% to 46% equity interest in ENC.

Chris Shepherd: USD 46 million of that was for our final E&C payment, for our final 2% to take us from 44% to 46% equity interest in E&C. Our Sampala development CapEx of approximately USD 26 million across the H1, and then an acquisition payment of USD 28.5 million for Sampala. That was the advance payment that we announced in May of this year. Our net borrowings following the successful syndicated loan in April of refinancing the outstanding USD 400 million of bank loans to USD 450 million of the syndicated loans in April. They are the key items there. It shows the movement of cash from USD 323 million at the start of the year to USD 260 million. So a strong cash balance of USD 260 million as we head into the H2 of 2026.

Speaker #3: Our SAMP HALA development capex was approximately $26 million across the half year, and then our acquisition payment was $28.5 million for SAMP HALA.

Speaker #3: That was the advance payment that we announced in May of this year. Our net borrowings, following the successful syndicated loan in April of refinancing the outstanding $400 million of bank loans to $450 million of syndicated loans, in April.

Speaker #3: They're the key items there. We can see it shows the movement of cash from $323 million at the start of the year to $260 million.

Speaker #3: So, a strong cash balance of $260 million as we head into the second half of 2026. Justin, back to you on page 8.

Chris Shepherd: Justin, back to you on page 8.

Speaker #2: Yeah, thanks, Chris. If we could move to the next slide, please. I'll start with the mining operations. 5.9 million wet metric tons for the first half of this year, basically on track and the same as the first half of last year.

Justin Werner: Yeah, thanks, Chris. If we could move to the next slide, please. I will start with the mining operations. 5.9 million wet metric tons for the H1 of this year, basically on track as the same as the H1 of last year. We do have an RKAB for 14.3 million for the remainder of the year. We saw a very strong July, where we delivered 1.4 million tons, and we are on track to potentially exceed that number in August. So expect to see a stronger ramp-up in tons in the H2 of this year. The average realized sale by 28% to USD 31.30. That again has increased significantly in the June quarter. So we expect to see the flow of that adoption of the HPM price into the Q3 and Q4 of this year.

Speaker #2: We do have an RKB for $14.3 million for the remainder of the year, and we saw a very strong July where we delivered $1.4 million.

Speaker #2: Tons, and we're on track to potentially exceed that number in August, so expect to see a stronger ramp-up in tons in the second half of this year.

Speaker #2: The average realized sale rose by 28% to US$31.30. That, again, has increased significantly in the June quarter, and so we expect to see the flow-on effects of that adoption of the HPM price into the third and fourth quarters.

Speaker #2: Operating costs for this year were up slightly—18.7. Well, they're up significantly versus the first half of last year, and that was really driven by higher royalties.

Justin Werner: Operating costs were up slightly, at 18.7. Well, they are up significantly versus the H1 of last year, and that was really driven by higher royalties. Adjusted EBITDA of USD 73.4 million. That was up 4%. I think what you will see is in June, we delivered a USD 45.7 million EBITDA just for the month of June. So we only really adopted the new HPM pricing in May, and we did have, in the June quarter, 14 days of lost production. So the Q3 of this year will be the first full quarter at that new HPM price. If you look at the adjusted EBITDA per wet metric ton, it was USD 12.40 for the H1 of 2026. It was USD 15.90 in the June quarter, and we would expect that EBITDA per ton margin to continue to rise across the Q3 and Q4 of this year.

Speaker #2: Adjusted EBITDA of US 73.4 million. That was up 4%. I think what you'll see is in the June in June, we delivered a 45.7 million EBITDA just for the month of June.

Speaker #2: And so we only really adopted the new HPM pricing in May. And we did have, in the June quarter, 14 days of lost production.

Speaker #2: So, the third quarter of this year will be the first full quarter at that new HPM price. And if you look at the adjusted EBITDA per wet metric ton, it was $12.40 for the first half of 2026.

Speaker #2: It was $15.90 in the June quarter, and we would expect that EBITDA per ton margin to continue to rise across the third and fourth quarters of this year.

Speaker #2: So, looking forward to a very strong second half of the year from the Hengye Mine, through increased volumes versus the first half of this year.

Justin Werner: Looking forward to a very strong H2 to the year from the Hengjaya Mine through increased volumes versus the H1 of this year, and increased EBITDA per ton margins due to the new ore pricing regime. If we could just go to the next slide, please. We were very pleased to announce the Sampala Jork resource upgrade. Over 1 billion wet metric tons. Margins currently at around $15.90. You can see the value of that ore body. It contains 8 million tons of nickel, so it makes it one of the largest ore resources globally.

Speaker #2: And increased EBITDA per ton margins due to the new ore pricing regime. If we could just go to the next slide, please. We were very pleased to announce the Sampang Halah resource upgrade.

Speaker #2: Over a billion wet metric tons. Margins currently at around $15.90. You can see the value of that ore money, as it contains 8 million tons of nickel.

Speaker #2: So it makes it one of the largest ore resources globally. We were able to leverage the value of that ore body into a share.

Justin Werner: We were able to leverage the value of that ore body into a share swap for 18% of Sampala's A&M and ETL IUPs, remembering that it is actually 3 IUPs, so it is only 2 of the 3 IUPs, for a 36% interest in the CNE HPAL project, which has about 28,000 tons of nickel capacity for zero cash. That share swap implies a Sampala valuation of above US$1.3 billion. That is about a 5.4 times value uplift on the consideration that we will pay for the project. In terms of project development, good progress continues to be made. Both the ETL and A&M IUPs feasibility studies are being progressed, and we are hopeful of approval of those in the coming weeks. In terms of the construction of the 24 kilometers of haul road, the first 8 kilometers has been completed.

Speaker #1: Swap for 18% of Sam Parlour's a n and ETL Iups . I'm remembering that it's actually three iups , so it's only two of the three Iups for a 36% interest in the project , which has about 28000 tons of medical capacity for zero cash .

Speaker #1: That share swap implies the Sam Barlow value ratio of above US 1.3 billion . So it's about a 5.4 times value uplift on the on the consideration that we've that we've paid for , that we will pay for the project in terms of project development , good progress continues to be made .

Speaker #1: Both the ETL and IUPs, the feasibility studies are being progressed, and we're hopeful of approval of those in the coming weeks.

Speaker #1: In terms of the construction of the 24 km of haul road, the first eight kilometres have been completed. For the remaining 16 km, we're just waiting on the relevant permits to be issued to be able to continue that 16 km section of the project.

Justin Werner: The remaining 16 kilometers, we are just waiting on the relevant permits to be issued to be able to continue that 16-kilometer section. At the Siduarsi project, feasibility study is also under review, and that is initially looking at a 2 million ton per annum ore operation. For Sampala, we are looking at about 19 to 20 million, so a similar size to what it is, or the intention of the Hengjaya Mine. I should add that we have made an application to increase from the 14.3 million at Hengjaya, and we are hopeful of hearing the results of that very shortly as well. If we could just move to the next slide, please. RKEF operations. Nickel production down slightly due to some scheduled maintenance at the power plants and RKEF lines at ANI and ONI, which produce the bulk of our NPI.

Speaker #1: Feasibility study is also under review, and that's initially looking at a 2 million tonne per annum operation for SAM. We're looking at about 19 to 20 million.

Speaker #1: So, a similar size to what it is, or the intention of the Hinge mine. And I should add that we have made an application to increase from the 14.3 million at Pengjia, and we are hopeful of hearing the results of that very shortly as well.

Speaker #1: If we could just move to the next slide , please . Okay . Yes . Operations . Nicole . Production down slightly due to some scheduled maintenance at the power plants and rkf lines at A .

Speaker #1: And NI, which produce the bulk of our NPI. We did also start a kiln and furnace rebuild on one of the kilns at the end of June.

Justin Werner: We did also start a kiln and furnace rebuild on one of the HNI kilns at the end of June. Cash costs were up 13% to $11,480, driven by the Indonesian government raising the benchmark saprolite ore pricing. Sale price up $13,700 to $13,784 a ton, up 21%. Pleasingly, EBITDA up 87% to US$146.7 million. I think that clearly demonstrates the leverage that would have to an improvement in both the NPI and the LME price. We have got a 21% increase in the NPI price, an 87% increase in adjusted EBITDA. If you look at the EBITDA per ton margin, that has gone from 1250 to 2,500. That is 100% increase in the EBITDA per ton.

Speaker #1: Cash costs were up 13% to 11,480 . Driven by the Indonesian government raising the benchmark Saprolite oil pricing sale price up 13,700 to $13,784 a tonne , up 21% and pleasingly , EBITDA , up 87% to US $146.7 million .

Speaker #1: So I think that clearly demonstrates that the leverage that we have to and improvement in in both the NPI and the and the LME price .

Speaker #1: So we've got a 21% increase in the NPI price and an 87% increase in adjusted EBITDA. And if you look at the EBITDA per tonne margin, that's gone from $1,250 to $2,500—that's a 100% increase in EBITDA.

Speaker #1: EBITDA per tonne . And if you look at NPI demand , looking forward , one of the analysts , they're talking about an additional 697 000 tonnes of nickel required to meet stainless growth , which is about 62% of incremental nickel demand and currently there's a moratorium on any new NPI growth in Indonesia .

Justin Werner: If you look at NPI demand looking forward, one of the analysts, CRU, they are talking about an additional 697,000 tonnes of nickel required to meet stainless growth, which is about 62% of incremental nickel demand. Currently, there is a moratorium on any new NPI growth in Indonesia. So growing demand for NPI through growth in stainless, but a cap on supply. We think that looking forward, the NPI business looks to be very strong, and that is supported by the H1 results. If we could just move to the next slide, please. At our HPAL operations, commissioning of Excelsior Nickel Cobalt is progressing well. We began commissioning in May. We have now announced subsequent to that first cathode and first MHP production. We currently have two kilns that are in the process of commissioning.

Speaker #1: So growing demand for NPI through through growth in stainless . But a cap on supply . So we think that looking forward , the NPI business looks looks to be very strong .

Speaker #1: And that's supported by the first half results . If we could just move to the next slide , please , at our operations , commissioning of NC is progressing well .

Speaker #1: We began commissioning in in May . We're now announced subsequent to that . First cathode and first MHP production , we currently have two kilns that are in the process of commissioning .

Speaker #1: They're at about 50% capacity , and we should have an update shortly as to when we when we will be able to start the commissioning of the , of , of the third kiln .

Justin Werner: They are at about 50% capacity, and we should have an update shortly as to when we will be able to start the commissioning of the third kiln. One of the challenges we are coming up against is this extremely dry wet season, and so we are just looking at ensuring that we can secure enough water for the whole operation. But, other than that, the commissioning is progressing well. At HNC, USD 35.2 million in adjusted EBITDA, up 31%. Nickel sales were down by about 10%. EBITDA per tonne margin up 52%, so very strong margins from MHP for the H1 of this year of $9,113 a tonne. There is obviously some pressures coming through, in regards to the cost of sulfur and the situation in the Middle East. I think pleasingly, the June quarter margins were still at $8,090 a tonne, at our HNC.

Speaker #1: One of the challenges we are coming up against is it's extremely dry , wet season . And so we're just looking at ensuring that we can secure it enough water for the for the whole operation .

Speaker #1: But other than that, the commissioning is progressing well at HNC. Adjusted EBITDA was $35.2 million, up 31%. Nickel sales were down by about 10%.

Speaker #1: EBITDA per tonne margin is up 52%, so very strong margins from MDP for the first half of this year of $9,113 per tonne.

Speaker #1: There is obviously some pressures coming through in regards to the cost of sulphur and the situation in the Middle East . I think , pleasingly , the June quarter margins were still at $8,090 a tonne at HNC , and we announced the first maiden distribution from HNC of US 3.5 million .

Justin Werner: We announced the first maiden distribution from HNC of US$3.5 million. If we could just go to the next slide, please. The HPAL is really where we will see the next leg of growth. I think if you look at the mine and NPI numbers, they are very strong. If we did not have any contribution from Excelsior Nickel Cobalt this year, I think we would still be on track to be somewhere around US half a billion in EBITDA just from the mine and NPI business alone. But you look at what is coming on over the course of the next 12 to 18 months. We have Excelsior Nickel Cobalt obviously commissioning. NIC's attributable interest in that is 33,000 tonnes. Just to remind everyone, it has a 15-year tax holiday with an additional 2 years at 11%. It is the first HPAL globally that will produce MHP, nickel and cobalt sulfate, and nickel cathode.

Speaker #1: If we could just go to the next slide, please. The HPAL is really where we'll see the next leg of growth.

Speaker #1: And , you know , I think if you look at the the mine and and NPI numbers , they're very , very strong .

Speaker #1: If we didn't have any contribution from NC this year, I think we would still be on track to be somewhere around us.

Speaker #1: Half a billion in EBITDA just from the from the mine and NPI business alone . But if look at what is coming on over the course of sort of the next 12 to 18 months , we have ANC obviously commissioning and ICS attributable interest in that as 33000 tonnes .

Justin Werner: We have Excelsior Nickel Cobalt obviously commissioning. NIC's attributable interest in that is 33,000 tonnes. Just to remind everyone, it has a 15-year tax holiday with an additional 2 years at 11%. It is the first HPAL globally that will produce MHP, nickel and cobalt sulfate, and nickel cathode.

Speaker #1: Just to remind everyone that it has a 15-year tax holiday, with an additional two years at 11%. And it's the first HPL globally that will produce MHP, nickel and cobalt sulfate, and nickel cathode.

Speaker #1: And before the end of last year , we announced the transaction with sphere , who's one of only five accredited suppliers to space and the only one with a long term ten year contract .

Justin Werner: Before the end of last year, we announced the transaction with Sphere, who is one of only 5 accredited suppliers to SpaceX and the only one with a long-term, 10-year contract. So nickel cathode will be going into SpaceX rockets. The quality of the cathode that has been produced thus far is very good, and so we are confident that that will allow us to achieve LME registration. That will take some time, but with LME registration, we should be able to command a premium. The recently announced eight transactions, I will start with TMI. That is USD 169 million required to be paid in November. That will give NIC 7,000 tonnes of attributable nickel metal. It is in a very strong consortium of Korean and Japanese partners, LS MnM, who are a significant global copper refiner, as well as other base metals and cathode producer. Hanwa, a Japanese trading company, with long, deep roots into Indonesia.

Speaker #1: So nickel cathode will be going into space rockets. The quality of the cathode that's been produced thus far is very good, and so we're confident that that will allow us to achieve LME registration.

Speaker #1: That will take some time. But with LME registration, we should be able to command a premium. The recently announced HPL transactions...

Speaker #1: I'll start with TMI. That's $169 million required to be paid in November. That will give NIC 7,000 tons of attributable nickel metal.

Justin Werner: That will give NIC 7,000 tonnes of attributable nickel metal. It is in a very strong consortium of Korean and Japanese partners, LS MnM, who are a significant global copper refiner, as well as other base metals and cathode producer. Hanwa, a Japanese trading company, with long, deep roots into Indonesia.

Speaker #1: It's in a very strong consortium of Korean and Japanese partners, who are significant global copper refiners, as well as other base metals and cathode producers. Anwara is a Japanese trading company with long, deep roots in Indonesia, and there is another unnamed strategic investor who is a global player in the EV chain.

Justin Werner: And another unnamed strategic investor who is a global player in the EV chain. As with all of our previous projects, that comes with a CapEx guarantee. Sampala has signed an MoU to be the exclusive supplier of ore to this project, and we feel the integration should bode favorably when it comes time for our AMDAL application at Sampala. Secondly, CNE, which I touched on in Sampala, effectively swapping an 18% interest in the Sampala project, the ANN and ETL IUPs for nil cash consideration for a 36% interest in CNE. That will give NIC about 10,000 tonnes of attributable nickel metal. So effectively, if you look at the two transactions, we are acquiring 17,000 tonnes of additional incremental high-margin MHP for a cash consideration of USD 169 million.

Speaker #1: As with all of our previous projects , that comes with a , with a , with a CapEx guarantee and Sam Pala has signed an MOU to be the exclusive supplier of ore to this project .

Speaker #1: And we feel the integration should bode favorably when it comes time for Arkab application at Sao Paolo and then secondly , C and E , which I touched on in Sao Paolo , effectively swapping an 18% interest in the Sam Paulo project for a n and ETL iups for new cash consideration for a 36% interest in C and E , that will give Nic about ten 000 tons of attributable nickel metal .

Speaker #1: So effectively , if you look at the two transactions we're acquiring 17000 tons of additional incremental high margin MH p for for cash consideration of US 169 million .

Speaker #1: So that's a capital intensity of around US ten zero zero $0 a tonne , which is significantly lower than than any of our peers are paying or have paid in the market to access high margin NHP units .

Justin Werner: That is a capital intensity of around USD 10,000 a tonne, which is significantly lower than any of our peers are paying or have paid in the market to access high-margin MHP units. If we could just move to the final slide, please. I think this H1 has really demonstrated our leverage to the nickel prices, given our strong production base. That was demonstrated through 21% increase in NPI price, translating into an 87% increase in EBITDA at our RKEF operations. We are yet to see any contribution from Excelsior Nickel Cobalt and then looking forward, from CNE and TMI. We are positioned at the very bottom end of the cost curve, through our scale and integration. I think if you look at particularly the H1 of last year where it was, we were at cyclical lows and a number of our peers were loss-making.

Speaker #1: If we could just move to the final slide , please I think this first half is really demonstrated . Our leverage to nickel prices , given our strong production base and that was demonstrated through 21% increase in NPI price translating into 87% increase in in EBITDA at our at our Rkf operations .

Speaker #1: And we're yet to see any contribution from AMC . And then looking forward from C and E and TMI , we're positioned at the at the very bottom end of the cost curve through our scale and and integration .

Speaker #1: And I think if you look at particularly the first half of last year where it was where at cyclical lows and a number of our peers were loss making even during that difficult time , we were able to , to make a robust margin .

Justin Werner: Even during that difficult time, we were able to make a robust margin. Now that we are coming into a period of significantly improved pricing and a much better market outlook, you can see what that has done to our bottom line. Again, a reminder of the material tax concessions that we have and the benefit that brings up to 15 years for our Excelsior Nickel Cobalt project. We are one of the largest owners of nickel resources globally, and we are seeing strengthening mine margins. Expect for the H2 of this year, we are looking forward to increased volumes and significantly stronger margins, and also a very strong focus on bringing on Sampala next year into production. We have a clear pathway that is funded to this growth.

Speaker #1: Now that we're coming into a period of , of significantly improved pricing and a much better market outlook , you can see what that is , is , is done to our bottom line .

Speaker #1: Again , a reminder of the material tax concessions that we have and the benefit that brings up to 15 years for our for our E and project , we , we are one of the largest owners of nickel resources globally .

Speaker #1: And we're seeing strengthening mine margins. So, for the second half of this year, we're looking forward to increased volumes and significantly stronger margins.

Speaker #1: And also a very strong focus on bringing bringing on San Pala next year into production . And we have a clear pathway that that's funded to , to , to this growth .

Speaker #1: And we think this this growth , when you combine the incremental H product margins that will come over the course of the next 12 to 18 months , along with margins from Sam Pala at a , you 19 to 20 million tonne run rate .

Justin Werner: We think this growth, when you combine the incremental HPAL product margins, that will come over the course of the next 12 to 18 months, along with margins from Sampala at a 19 to 20 million ton run rate. That sets us up well to targeting EBITDA of USD 1 billion in the next two to three years. If you look at the market itself, again, coming back to CRU. They believe there is probably about an additional 1.1 million tons of nickel demand up until the end of 2030. It is a CAGR of about 5.6%. 700,000 of that to come from stainless, that obviously bodes very well for the NPI business, given the lack of new supply coming on.

Speaker #1: You know , that's that sets us up well to , you know , targeting EBITDA of us a billion in the next sort of 2 to 3 years .

Speaker #1: If you look at the the the market itself , again , coming back to Cru , they believe there's probably about an additional 1.1 million tonnes of , of , of nickel demand up until the end of 2030 .

Speaker #1: So it's a GA of about 5.6% , 700 000 of that to come from stainless . And so that obviously bodes very well for the NPI business , given the lack of new supply coming on about 250 000 of that from from battery , and then another 150 000 from other .

Justin Werner: About 250,000 of that from battery and then another 150,000 from other, and that is products such as superalloys, which obviously is the market that ENC will be selling into through the transaction with Sphere and the supply to SpaceX. With that, I will hand over to Q&A.

Speaker #1: And that's products such as superalloys, which obviously is the market that ANC will be settling into through the transaction with Sphere and the supply to, to, to space.

Speaker #1: With that, I'll hand over to Gavin.

Speaker #2: Thank you. If you have a question, please press star one on your telephone keypad to raise your hand and join the queue.

Operator 2: Thank you. If you have a question, please press star one on your telephone keypad to raise your hand and join the queue. If you wish to remove yourself from the queue, simply press star one again. One moment please, for your first question. Your first question comes from the line of Lyndon Fagan of J.P. Morgan. Your line is open.

Operator: Thank you. If you have a question, please press star one on your telephone keypad to raise your hand and join the queue. If you wish to remove yourself from the queue, simply press star one again. One moment please, for your first question. Your first question comes from the line of Lyndon Fagan of J.P. Morgan. Your line is open.

Speaker #2: If you wish to remove yourself from the queue, press star one again. One moment, please. For your first question—your first question comes from the line of Linden Feigin of J.P. Morgan.

Speaker #2: Your line is open

Speaker #3: Good morning guys . Thanks for the call . Look , the first one , just a bit of accounting treatment . Tidy up .

Lyndon Fagan: Good morning, guys. Thanks for the call. Look, the first one, just a bit of accounting treatment tidy up. So, with mining, at what point are we going to see all of the revenue going into segment, i.e., I guess the HPAL division consuming whatever is left there. I guess, are you able to give some color on when that will be zero revenue, i.e., it is going to feed everything internally?

Speaker #3: So, with mining, at what point are we going to see all of the revenue going into the segment? I guess the HPL division is consuming whatever's left there.

Speaker #3: You know I guess are you able to give some color on when that'll be zero revenue ? I , I , it's going to feed everything internally

Justin Werner: Chris, do you want to take this one?

Speaker #1: Chris, do you want to take this one?

Speaker #2: Chris line has dropped .

Operator 2: Chris' line has dropped.

Operator: Chris' line has dropped.

Speaker #1: Okay. I think we've lost Chris.

Justin Werner: Okay. I think we've lost Chris, Lyndon.

Lyndon Fagan: That's okay. I can take it offline.

Speaker #3: That's okay. I can take it offline.

Speaker #1: Yeah, yeah, yeah. Okay.

Justin Werner: Yeah. Okay.

Speaker #3: The other one was just just to pick up on your billion dollar EBITDA comments . Are we able to break that down by the vision ?

Lyndon Fagan: The other one was just to pick up on your billion-dollar EBITDA comments. Are we able to break that down by division? I guess a bit under that, just trying to kind of figure out

Speaker #3: I guess a bit under that. So just trying to kind of figure out what I might be missing there.

Justin Werner: Right

Chris Shepherd: Right

Lyndon Fagan: what I might be missing there.

Speaker #4: Sorry , sorry . Linden . I've just been cut off . I heard you say the first one's for an accounting treatment . Tidy up , and then I've been cut off the line .

Justin Werner: Sorry, Lyndon. I have just been cut off. I heard you say the first one is for an accounting treatment tidy up, and then I have been cut off the line. I have just dialed back in. I have not heard anything since that.

Chris Shepherd: Sorry, Lyndon. I have just been cut off. I heard you say the first one is for an accounting treatment tidy up, and then I have been cut off the line. I have just dialed back in. I have not heard anything since that.

Speaker #4: I've just dialed back in. I haven't heard anything since then.

Speaker #3: No, that's all right. I guess what I'm trying to determine is just when all of the mining revenue will be in too.

Lyndon Fagan: That is all right. I guess what I am trying to determine is just when all of the mining revenue will be into segment. I guess that relies on the HPAL division consuming the remaining portion of revenue there that is going externally. When should we expect that to be showing zero revenue in the segment reporting?

Speaker #3: And so I guess that relies on the H pal division consuming . I guess the remaining portion of revenue there . That's going externally .

Speaker #3: When exactly should we expect that to be showing zero revenue in the segment reporting?

Speaker #4: Sorry Zero .

Justin Werner: Sorry, I was. Zero revenue.

Chris Shepherd: Sorry, I was. Zero revenue.

Speaker #3: I guess

Lyndon Fagan: I guess the.

Speaker #4: For the lemonade in the, just the lemonade.

Justin Werner: For the limonite and the saprolite?

Chris Shepherd: For the limonite and the saprolite?

Lyndon Fagan: Yeah.

Justin Werner: Or just the limonite?

Speaker #3: Yeah . So so I guess at this stage it's already it's already zero . The lemonade . And and we're seeing the saprolite .

Lyndon Fagan: Yeah. I guess at this stage it is already zero the limonite, and we are seeing the saprolite. When are we going to

Speaker #3: When are we going .

Speaker #4: Well .

Justin Werner: Well, the saprolite

Chris Shepherd: Well, the saprolite

Speaker #3: When are we going to see

Lyndon Fagan: When are we going to see

Speaker #4: The Saprolite is all , is all internal . So we eliminate that out already . So the intercompany revenues you're seeing there in the nickel ore mining , that's Saprolite revenue .

Justin Werner: The saprolite is all internal. We eliminate that out already. The intercompany revenues you are seeing there in the nickel ore mining, that is saprolite revenue. Currently

Chris Shepherd: The saprolite is all internal. We eliminate that out already. The intercompany revenues you are seeing there in the nickel ore mining, that is saprolite revenue. Currently

Speaker #4: Currently

Lyndon Fagan: Sorry, I got that the wrong way around.

Speaker #3: The . Yeah .

Speaker #4: The , the , the . And whereas the lemonade all sales are currently to have been to third parties . We have been selling to third parties .

Justin Werner: Whereas the limonite ore sales are currently have been to third parties. We have been selling to third parties, so they have not been getting eliminated. It will be a little bit different when we bring on ENC and we have the revenues there, because we are not going to be consolidating ENC, it is going to be equity account of treatment. So you will see in our next set of accounts, in the December accounts, there will be slightly expanded disclosure. What you are seeing there in the HPAL projects, the revenue of EAA, which is backed out, that is the revenue, the sales from HNC to Sing Creation. So that is very different. So HNC, where we have got our 10% interest, sells to our trading entity, so we are backing that out.

Chris Shepherd: Whereas the limonite ore sales are currently have been to third parties. We have been selling to third parties, so they have not been getting eliminated. It will be a little bit different when we bring on ENC and we have the revenues there, because we are not going to be consolidating ENC, it is going to be equity account of treatment. So you will see in our next set of accounts, in the December accounts, there will be slightly expanded disclosure. What you are seeing there in the HPAL projects, the revenue of EAA, which is backed out, that is the revenue, the sales from HNC to Sing Creation. So that is very different. So HNC, where we have got our 10% interest, sells to our trading entity, so we are backing that out.

Speaker #4: So they have not been getting, they have not been getting eliminated. We will have a very... It won't be the same for us.

Speaker #4: It'll be a little bit different when we bring on ANC and we have the revenues there, because we're not going to be consolidating ANC.

Speaker #4: It's going to be equity accounted treatment . So you'll see in our next set of accounts in the December accounts , there'll be slightly expanded , expanded disclosure .

Speaker #4: What you're seeing there in the PAL projects is the revenue of VAR, which is backed out. That is, that's the revenue.

Speaker #4: The sales from H and C to sing creation . So it's that's very different . So HSC , where we've got our 10% interest sells to our trading entity .

Speaker #4: So, we're backing that out.

Speaker #3: Yes, I've got the trading bit sorted. It's really just to try and figure out at what point the mining division is just feeding everything internally to ARC, F, and H PAL.

Lyndon Fagan: Yeah. So I have got the trading bit sorted. It is really just to try and figure out at what point is the mining division just feeding everything internally to RKEF and HPAL. Are we going to get to that point in the next year?

Speaker #3: Are we going to get to that point in the next year?

Speaker #4: The intention . Well currently . Saprolite yes . And we intend to prioritise all of our into ANC . And if there is any external leftover then we will sell it externally .

Chris Shepherd: The intention, well, currently saprolite, yes. And we intend to prioritize all of our limonite into ENC. And if there is any external leftover, then we will sell it externally. But the hope and the plan is that all sales will be internal to the group.

Speaker #4: But the hope and the plan is that all sales will be internal to the group.

Speaker #3: Yeah . So , so so that that'll once A and C is ramped up , we basically won't be seeing any revenue in the mining segment .

Lyndon Fagan: Yeah. So, once ENC's ramped up, we basically won't be seeing any revenue in the mining segment. Is that fair?

Speaker #3: Is that fair ?

Speaker #4: No, no, no, you'll see it. The nickel ore mining will be exact. Sorry. Yes, you're right.

Chris Shepherd: No, no. You'll see it. The nickel ore mining will be exact. Sorry. Yes, you're right.

Lyndon Fagan: There'll be an intersegment elimination for all of it.

Speaker #3: There'll be an inner eliminations for all of it . Yeah . For yeah . Just and and when Wednesday and C expected to be fully ramped up to sort of trigger that .

Chris Shepherd: Yes.

Lyndon Fagan: Yeah.

Chris Shepherd: For the services-

Lyndon Fagan: No, that is cool.

Chris Shepherd: Yeah.

Lyndon Fagan: When is ENC expected to be fully ramped up to sort of trigger that?

Speaker #4: Justin, do you want to talk about the ramp-up timing?

Chris Shepherd: Justin, do you want to talk about the ramp-up timing?

Speaker #1: Yeah. So we're at 50% of the first two Auto Clubs. We're just waiting on the decision and the timing for the commissioning of the third and final Auto Club.

Justin Werner: Yeah. We are at 50% of the first two autoclaves. We are just waiting on the decision and the timing for the commissioning of the third and final autoclave, then we will be able to give a more definitive answer, but its target is still very much before the end of this year.

Speaker #1: And then we'll be able to give a more definitive answer. But the target is still very much before the end of this year.

Speaker #3: Great. And then, Justin, just to pick up on the billion dollar EBITDA target, how should we split that up across the various segments?

Lyndon Fagan: Great. Then, Justin, just to pick up on the billion-dollar EBITDA target, how should we split that up across the various segments?

Speaker #5: Yes . Look .

Justin Werner: Yeah. Look, using just today's margins, if you assume about 125,000 tonnes of nickel in NPI at a $2,500 a tonne, gives you about $300 million US in EBITDA. If you take the Hengjaya Mine at 14.3 million and you use current margins of sort of $15.90 or $16, it's about $225 million. So that's the as-is operations at the moment. As I said, it's about half a billion. That's supported with the US $247 million of EBITDA for the H1 of this year. Then looking forward, if you look at HPAL, we've got 60,000 tonnes of attributable nickel units coming through from ENC, CNE, and TMI. If you use the June quarter margins, which were sort of around $8,000 a tonne, you've got another $480 million.

Speaker #1: Using using just the today's margins . If you assume about 125 000 tons of nickel in MP , at a , at a , at a two and a half thousand dollars a tonne gives you about $300 million in EBITDA if you take the Heng Jia mine at 14.3 million and you use current margins of sort of $15.90 or $16 , that's about $225 million .

Speaker #1: So that's the as is operations at the moment . So as said , it's about , you know , half a billion and , you know that that that's sort of that's supported with the , you know , US 247 million of EBITDA for the first half of of this year .

Speaker #1: Then looking forward , if you look at H , pal , we've got 6000 tonnes of attributable nickel units coming through from E and C , C and E and TMI .

Speaker #1: If you use the the June auto margins , which were sort of around $8,000 a tonne , you've got another $480 million . And then you've got Sam Parlour at at sort of 20 million tonnes again , at that $15.90 margin , you've got about another 300 million .

Justin Werner: Then you've got Sampala at sort of 20 million tonnes, again, at that $15.90 margin, you've got about another $300 million. So those three, four numbers, that takes you to sort of in excess of that US $1 billion in EBITDA.

Speaker #1: So, those three, four numbers—now that takes you to sort of, in excess of that, a US$1 billion in EBITDA.

Speaker #3: Okay, thanks for that. I'll pass it on.

Lyndon Fagan: Okay. Thanks for that. I'll pass it on.

Speaker #5: Thanks . And

Justin Werner: Thanks.

Speaker #2: Your next question comes from the line of Richard Knights of Barrenjoey. Your line is open.

Operator 2: Your next question comes from the line of Richard Knights of Barrenjoey. Your line is open.

Operator: Your next question comes from the line of Richard Knights of Barrenjoey. Your line is open.

Speaker #6: Hi . Pardon me . Hey , Justin . Chris , thanks for the call . Just just wanted to push you a little bit on the water issue at ANZ .

Richard Knights: Pardon me. Hey, Justin, Chris. Thanks for the call. Just wanted to push you a little bit on the water issue at ENC. What exactly are you looking for there in terms of permitting and how should we be thinking about the ramp-up? Are you still expecting to hit nameplate by the end of the year, or how should we think about the risks to that?

Speaker #6: What? What exactly are you looking for there in terms of permitting, and how should we be thinking about the ramp-up?

Speaker #6: You know, are you still expecting to hit nameplate by sort of the end of the year, or, you know, how should we think about the risks to that?

Speaker #1: Yeah . So the we have had a above average dry season . In fact , it's been a very dry , dry season given given obviously the growth in the park and the size of the park , we are looking at what water is , is available .

Justin Werner: Yeah. So we have had an above average dry season. In fact, it's been a very dry season. Given obviously the growth in the park and the size of the park, we are looking at what water is available. We do draw water from one of the major rivers, and that's at a very low level at this point in time. Look, we're confident that when the wet season comes on, which is in the next two to three months, that it'll return back to normal. So it's something that we're just looking at at the moment, and that'll really determine when we're ready to start commissioning of the third autoclave. So at the moment, we've got two commissioning, and the commissioning there is going very well. Availability of water will determine when we start the commissioning of the third autoclave.

Speaker #1: We do draw water from , from , from one of the major rivers . And that's sort of at at a very low level at this point in time .

Speaker #1: Look , we think what we're confident that when the wet season comes on , which is in the next 2 to 3 months , so it'll return back to normal .

Speaker #1: So that's just—it's something that we're just looking at at the moment. And that'll really determine when we're ready to start commissioning of the third Autoclave.

Speaker #1: So at the moment, we've got two commissioning, and the commissioning now is going very well. Availability of water will determine when we start the commissioning of the third Auto Club.

Speaker #1: But we still remain confident given that we we should be coming out of the dry season fairly soon , that we'll be able to achieve that nameplate by the by the end of the year .

Justin Werner: But we still remain confident, given that we should be coming out of the dry season fairly soon, that we'll be able to achieve that nameplate by the end of the year.

Speaker #6: Yeah , yeah . Okay . And , and the two autoclaves that are ramped that are that are operating , they're running . You said about 50% , you know , during .

Richard Knights: Yeah. Okay. The two autoclaves that are operating, they are running, you said about 50% during-

Justin Werner: They are already at that. Yeah. They are already at that 50% of their nameplate.

Speaker #1: The already at . Yeah , yeah , yeah , they're already at 50% of , of their , of their nameplate

Speaker #6: Yeah . Okay . And so we should , we should expect those two to be , to be running that sort of nameplate by the end of the year with a degree of confidence .

Richard Knights: Yeah. Okay. We should expect those two to be running at that sort of nameplate by the end of the year with a degree of confidence?

Speaker #1: Yeah . Look , I , yeah , look , I would think within the next sort of two months .

Justin Werner: Yeah. Look, I would think within the next two months.

Speaker #6: Yeah , yeah . Okay . And then maybe just pushing a little bit on , on sulfur prices and the impact there . I mean , does that come into your thinking at all in terms of the ramp up at ANZ ?

Richard Knights: Yeah. Okay. Then maybe just pushing a little bit on sulfur prices and the impact there. Does that come into your thinking at all in terms of the ramp-up at ENC? Then I suppose the counter to that is what are nickel and MHP prices doing? How are those realizations looking? Have you even sold any material from ENC yet?

Speaker #6: And then, I suppose the counter to that is: what are nickel and MHP prices doing? How are those realizations looking? Have you even sold any material from EMC yet?

Speaker #1: Yeah . So we are still awaiting for the for the IWA or the sales license to be able to sell some some M.h.p from , from from EMC .

Justin Werner: Yeah. So we are still waiting for the IUP or the sales license to be able to sell some MHP from ENC. We are confident of getting that in the near term. So that will allow us to make the first sales of MHP and we also have some cathode which has been produced. MHP payabilities are holding up quite strongly. Sulfur obviously continues to be a challenge looking forward, although we are sitting at around still about 44,000 tons of sulfur in stockpiles. So we do still have a good buffer there until we have to go out into the market and buy some meaningful volumes.

Speaker #1: And if we're confident of sort of , of , of getting that in , in the near term so that that'll allow us to make the first sales of , of MH and we also have some cathode , which , which has been produced .

Speaker #1: M.h.p probabilities are holding up quite strongly . Sulfur obviously continues to be to be a challenge . Looking forward , although , you know , we we are sending it around still about 44000 tons of of sulfur in stockpiles .

Speaker #1: So we do still have a good buffer there until we have to sort of go out into the market and buy some meaningful volumes.

Speaker #6: Yeah , yeah . Okay . Thanks . And then maybe just , just a question on regional quotas . You know , we haven't seen anything firm yet , but there's been rumors that we obey the sort of 20 million ton shortfall that Xingshan had .

Richard Knights: Yeah. Okay, thanks. Then maybe just a question on regional quotas. We have not seen anything firm yet, but there has been rumors that Weda Bay, the sort of 20-million-ton shortfall that Tsingshan had there has now been granted. I suppose, what are you seeing in terms of additional quotas being granted halfway through the year, and how do you expect that to inform your application at Hengjaya?

Speaker #6: There has now been a quota granted, you know, I suppose. What are you seeing in terms of additional quotas being granted halfway through the year, and how do you expect that to inform your application at Pengjia?

Speaker #5: Yeah , look .

Justin Werner: Yeah, look, there was some unfounded news that went out that Weda Bay had received a 20-million ton increase, but that has not been verified. In fact, before the RKAB quotas are released, they are just waiting for confirmation from the government as to whether they will be making any increases in the RKAB. I believe based on, I mean, we have been through iterations of evaluation. I think now that we should be in the next 2 to 3 weeks, potentially even earlier than that, we should know the outcome of the applications that have been made by all participants and who may or may not receive an increase. But at this point in time, we are not aware of anyone that has been issued an increase. There certainly has not been anything formal from the government to indicate that there is going to be a new RKAB quota level set.

Speaker #1: There was some unfounded news that went out that whether they had received , you know , a 20 million tonne increase , but that , that that hasn't been verified .

Speaker #1: And in fact , before the Arkab quotas are released , they're just waiting from confirmation from the government as to whether they they will be making any increases in the RCB , I believe , based on I mean , we've we've been through through iterations of of evaluation , I think now that we should be in in the next 2 to 3 weeks , potentially even earlier than that , we should we should know the outcome of , of , of the applications that have been made by all participants and who may or may not receive a , a , an increase .

Justin Werner: I think now that we should be in the next 2 to 3 weeks, potentially even earlier than that, we should know the outcome of the applications that have been made by all participants and who may or may not receive an increase. But at this point in time, we are not aware of anyone that has been issued an increase. There certainly has not been anything formal from the government to indicate that there is going to be a new RKAB quota level set.

Speaker #1: But at this at this point in time , we're not aware of anyone that's been issued an increase . And there certainly hasn't been anything formal from the government to indicate that that there's going to be a new RCB quota level set .

Speaker #1: And I think that's really what what what everyone's waiting for , for that confirmation of what the number is , whether they're going to stick with it or whether they're going to make a adjustment .

Justin Werner: I think that's really what everyone's waiting for that confirmation of what the number is, whether they're going to stick with it or whether they're going to make an adjustment.

Speaker #6: Yep , yep . Okay . That's interesting . And then just one last one from me , just on the balance sheet . Can you just remind us of the timing of the payments for Sam , Paula , and for TMI , C and yeah , Richard's yeah .

Richard Knights: Yeah. Okay. That's interesting. Then just one last one from me, just on the balance sheet. Can you just remind us of the timing of the payments for Sampala and for TMI CNE?

Justin Werner: Yeah.

Richard Knights: When are those

Chris Shepherd: Richard

Justin Werner: Richard

Richard Knights: kind of due?

Chris Shepherd: Yeah. TMI, there's 169 million due in November. CNE, you just said payments for TMI and CNE. There's actually no payment for CNE. That's the share swap.

Speaker #4: TMI , there's 169 mil due in November . CEU just said payments for TMI . And . There's actually no payment for C and E , that's the share swap .

Richard Knights: Okay. Yeah.

Speaker #4: And then the remaining payment for Sam Pala is in April 144 mil for our for our equity interest in the project . That's in April 27th .

Chris Shepherd: The remaining payment for Sampala is in April, 144 million for our equity interest in the project. That's in 27 April.

Speaker #6: Yeah . Okay .

Richard Knights: Yeah. Okay.

Chris Shepherd: The follow-up which other people may have, and I'm expecting to get it, is we announced when we did the transaction for TMI, the USD 169 million payment that should we require it, Tsingshan would look to fund, would be available to fund if required. Subsequent to year-end, we've now actually entered into a facility agreement with a partner of Tsingshan for that purpose. So obviously we haven't drawn down any of it. I'm not expecting to draw down on it, but for completeness, that facility is there. It's been executed. So if we did require it, we can draw down on that.

Speaker #4: The follow up , which the follow up , which people may have . And I'm expecting to get it is we announced when we did the transaction for TMI , the 169 mil payment that should we require it .

Speaker #4: Qingshan would would look to fund would would be available to fund if required subsequent to year end . We've now actually entered into a facility agreement with a partner of Xinjiang for for that purpose .

Speaker #4: And so obviously , we haven't drawn down any of it . I'm not expecting to draw down on it , but for completeness , that facility is It's been executed .

Speaker #4: So, if we did require it, we can draw down on that.

Speaker #6: Yeah. Okay. And that's a $144 million facility, is it?

Richard Knights: Yeah. Okay. And that's a USD 144 million facility, is it?

Speaker #4: Oh, sorry. The facility is $169 million to match the TMI payment, which is due in November. Yeah.

Chris Shepherd: No, sorry. The facility is USD 169 million to match the TMI payment, which is due in November.

Richard Knights: Yep.

Speaker #6: Yep . Perfect . Okay , great . Thanks , guys .

Chris Shepherd: Yep.

Richard Knights: Yeah. Perfect. Okay, great. Thanks, guys.

Speaker #4: Thanks , Richard .

Chris Shepherd: Thanks, Richard.

Speaker #5: Thanks , Richard .

Justin Werner: Thanks, Richard.

Speaker #2: Your next question comes from the line of David Coates of Bell Potter Securities. Your line is open.

Operator 2: Your next question comes from the line of David Coates of Bell Potter Securities. Your line is open.

Operator: Your next question comes from the line of David Coates of Bell Potter Securities. Your line is open.

David Coates: G'day, Justin. G'day, Chris. Thanks for the call this morning. Congratulations on a good result. Just a couple of quick ones from me, hopefully. Just on the mining ramp up, you're waiting on the RKAB license. What's your mining strategy in the meantime? You're running flat chat and then banking on the payment coming through, or are you adjusting your mining volumes, like in case of delay? That's the first one.

Speaker #7: Justin: Christopher, thanks for the call this morning. Congratulations on a good result. Just a couple of quick ones from me.

Speaker #7: Hopefully just on the on the mining , the the mining ramp up you you know , you're waiting on the arkab license . What's your mining strategy in the meantime ?

Speaker #7: You're sort of running flat chat and then and you know , banking on the sort of permanent coming through or are you , are you adjusting your mining volumes , you know , like in case it doesn't or there's a delay .

Speaker #7: That's the first one .

Speaker #5: Yeah . No thanks .

Justin Werner: Yeah. No. Thanks, David. For the mining strategy, we'd sort of kept it at about 6 million for the H1 of this year in anticipation of saving volumes for the ENC commissioning and ramp-up. We did 1.4 million tons in July. Probably on track to do about 1.5 in August. We're just sort of matching the demands of ENC along with making sure that we sort of get close to our, or we meet our RKAB target. What we do have, which is great, is we have the flexibility of third-party limonite sales to other HPAL producers. So we're balancing that against the RKAB quota, and then against the commissioning and anticipated limonite requirements coming from ENC. As I said, hopefully we'll know the outcomes of our RKAB application in the coming weeks.

Speaker #1: Dave . Yeah . For the mining strategy , we , we sort of kept it at , you know , about 6 million for the first half of this year in , in anticipation of , of saving volumes for the for the ANC commissioning and ramp up .

Speaker #1: We did , we did 1.4 million tonnes in July , probably on track for about 1.5 in in August . And we're just sort of matching the demands of , of , of NC Along with the making sure that we , you know , we , we sort of get close to our , or we meet our Arkab target .

Speaker #1: What we do have , which is great is we have the flexibility of third party sales to , to , to other HBL producers .

Speaker #1: So we're just , we're balancing that against the Arkab quota and then against the commissioning and anticipated limonite requirements coming from coming from ANC .

Speaker #1: And as I said , hopefully we'll have we'll know the outcomes of our Arkab application in the coming weeks . And then depending on what that is , we do have a strategy in place to , you know , if required , if we do need to ramp up how we can , how we can look to achieve that ramp up .

Justin Werner: Depending on what that is, we do have a strategy in place to, if it's required, if we do need to ramp up, how we can look to achieve that ramp-up for the larger volumes if we're successful in our application to increase.

Speaker #1: But for the larger volumes, if we're successful in our application to increase,

David Coates: Cool. Just a quick reminder, that's about 19-point-something million tonnes, that application you made, is that correct?

Speaker #7: And just a quick reminder that that's a 19 point something million tonnes . That application you made , is that correct ?

Speaker #1: Yes. Application for 19.

Justin Werner: Yes. Application for 19.

Speaker #7: And then secondly , the registration of nickel cathode with the LME , I mentioned it might take some time . And I don't , you know , particularly , you know , want to hold you to a schedule is probably a bit out of control , but broadly , broadly speaking , what kind of timeline are you looking at and what kind of marketing plans do you , you know , will that kind of enable that , you interested in pursuing , assuming it comes through

David Coates: Secondly, the registration of nickel cathode with the LME. You mentioned it might take some time, and I do not particularly want to hold you to a schedule that is probably a bit out of your control, but broadly speaking, what kind of timeline are you looking at? What kind of marketing plans will that kind of enable that you would be interested in pursuing, assuming it comes through?

Speaker #1: Yeah . Look , our head of battery materials , Simon Miller , is he's he's really driving that LME registration process . My understanding is it will probably be about 18 months time frame , but that that that's sort of the target that we're that we're working towards for the , for the registration .

Justin Werner: Yeah, look, our head of battery materials, Simon Miller, he is really driving that LME registration process. My understanding is it will probably be about an 18-month timeframe. That is sort of the target that we are working towards for the registration. I think what is interesting for cathode is obviously we already have a large volume that is accounted for outside of the LME for Sphere. I think their volumes requirements will continue to grow with the growth of SpaceX and/or the forecast growth of SpaceX and their superalloy requirements.

Speaker #1: I think what's interesting for , for , for cathode is obviously we already have a , a large volume that's accounted for outside of the LME for , for sphere .

Speaker #1: And I think their volumes requirements will , will continue to grow with the growth of , of space and , and all the forecast growth of , of face and their superalloy requirements

David Coates: Cool. Okay. You look to leverage that LME premium pricing into that Sphere offtake or-

Speaker #7: Richard, that you've looked to leverage that premium pricing into that SPHA offtake, or yes?

Justin Werner: Yes, absolutely. Yeah.

Speaker #1: Yeah. Absolutely. Yep.

David Coates: Okay, cool. Excellent. Thanks very much, guys. Cheers.

Speaker #7: Excellent. Thanks very much, guys. Cheers.

Justin Werner: Thanks, Dan.

Speaker #1: Thanks

Speaker #2: Your next question comes from the line of Donovan Tan of BlackRock. Your line is open.

Operator 2: Your next question comes from the line of Donovan Tan of BlackRock. Your line is open.

Operator: Your next question comes from the line of Donovan Tan of BlackRock. Your line is open.

Speaker #8: Hey , thank you for the presentation . I think I have a couple of clarification questions . Apologies . I didn't hear it clearly , but can you just double check that some cathode has already been produced once ?

Donovan Tan: Hi, management. Thank you for the presentation. I have a couple of clarification questions. Apologies, I did not hear it too clearly. Can you just double-check that some cathode has already been produced? One. And two, when you were speaking about the EBITDA waterfall, it is going to be 300 from RKEF, half a billion from the HPAL, and about 300 from the mine. Is that correct?

Donavan Tan: Hi, management. Thank you for the presentation. I have a couple of clarification questions. Apologies, I did not hear it too clearly. Can you just double-check that some cathode has already been produced? One. And two, when you were speaking about the EBITDA waterfall, it is going to be 300 from RKEF, half a billion from the HPAL, and about 300 from the mine. Is that correct?

Speaker #8: And two, when you were speaking about the kind of EBITDA waterfall, it's going to be $300 million from RKF, half a billion from the HPL, and about $300 million from the mines.

Speaker #8: Is that correct

Speaker #1: Yes . Yeah . Thanks . Donovan . The correct way . First , cathode has been produced . And and the quality that we're producing subsequent to that is very good .

Justin Werner: Yes. Thanks, Donovan. That is correct. First cathode has been produced and the quality that we are producing subsequent to that is very good, so we are very happy with that. Yeah, just in terms of the EBITDA, yeah, we are looking at about USD 300 million from the NPI business, about USD 200 million from Hengjaya Mine, about USD 300 million from Sampala. Then from the HPAL, we have 60,000 tonnes of attributable at nameplate. Really it depends what margin you use there. We have used the June quarter margin of USD 8,000, so that is another sort of USD 480 million of EBITDA there.

Speaker #1: So we're very happy with that . Yeah . Just in terms of the EBITDA . Yeah , we're looking at about 300 million from the MPI business , about 200 million from Hangzhou and mine , about 300 million from Sam Pala and then from the H pal .

Speaker #1: We've got 6,000 tons of attributable—that’s at nameplate. And really, it depends what margin you use there. We've used the June quarter margin of $8,000.

Speaker #1: So that's another sort of $480 million of EBITDA there.

Speaker #8: Okay . Got it . Thank you . Yeah . So I have two questions . So the first one is just a asking about the sphere side of things from ANC .

Donovan Tan: Okay. Got it. Thank you. I have two questions. The first one is just asking about the Sphere side of things from ENC. I understand the products will be kind of pro rata. Is there any expectations of selling your own share of the ENC products over the sales, like incremental demand from them?

Donavan Tan: Okay. Got it. Thank you. I have two questions. The first one is just asking about the Sphere side of things from ENC. I understand the products will be kind of pro rata. Is there any expectations of selling your own share of the ENC products over the sales, like incremental demand from them?

Speaker #8: I understand the products will be kind of pro rata. Is there any expectation of selling your own share of the products over the sphere?

Speaker #8: So, like, incremental demand from them.

Speaker #1: Yes . So the , the , they obviously have the right to offtake their , their pro rata , 10% . We have entered into an agreement to provide over and above that , that 10% , due to their demand .

Justin Werner: Yeah, so they obviously have the right to offtake their pro rata 10%. We have entered into an agreement to provide over and above that 10% due to their demand. I think that demand will continue to grow. Obviously subject to the pricing being competitive, then we would look to entertain further cathode sales to Sphere.

Speaker #1: And I think that demand will continue to grow . And obviously subject to the pricing being competitive , then then we'd look to entertain further cathode sales to , to sphere

Speaker #8: Okay . Got it . And I think just one final question for myself , I think this is regarding a headline back in July where Tsingshan kind of , you know , suspended some exports of metal products .

Donovan Tan: Okay, got it. I think just one final question from myself. I think this is regarding a headline back in July where Tsingshan suspended some exports of metal products. I understand that you guys sell it to Tsingshan, which is not exactly an export, but have they communicated anything about this to you guys?

Donavan Tan: Okay, got it. I think just one final question from myself. I think this is regarding a headline back in July where Tsingshan suspended some exports of metal products. I understand that you guys sell it to Tsingshan, which is not exactly an export, but have they communicated anything about this to you guys?

Speaker #8: So I understand that you guys send it to Tsingshan, which is not exactly an export, but have they communicated anything about this to you guys?

Speaker #1: Yes , they , they did pare back some of the production at at their IIPH bal operations I should note that those operations aren't integrated with with all supply .

Justin Werner: Yeah. They did pare back some of the production at their Indonesia Weda Bay Industrial Park HPAL operations. I should note that those operations aren't integrated with ore supply, and so as a result, they are paying a much higher price for ore than Excelsior Nickel Cobalt. So, again, look, we think it just demonstrates the benefit of being integrated and sitting at the bottom end of the cost curve.

Speaker #1: And so as a result they are paying a much higher price for for all than than ANC . And so I think they took the decision to just to pare back the production .

Speaker #1: So again , look , we think it just demonstrates the , the benefit of , of being integrated and sitting at the bottom end of the , of the cost curve

Speaker #8: Okay . I hear you . All right . Thank you . That's all for me . I'll go back to the queue .

Donovan Tan: Okay, I hear you. All right. Thank you. That's all from me. I'll go back to the queue.

Donavan Tan: Okay, I hear you. All right. Thank you. That's all from me. I'll go back to the queue.

Speaker #1: Thanks , Jonathan .

Justin Werner: Thanks, Oliver.

Speaker #2: Your next question comes from the line of William Jing of Iron and Analytics. Your line is open.

Operator 2: Your next question comes from the line of William Jing of Ion Analytics. Your line is open.

Operator: Your next question comes from the line of William Jing of Ion Analytics. Your line is open.

Speaker #8: Hi . Thanks for taking my question . So I have just one follow up question about the the mining strategy . So basically we are seeing very strong production at the mine and at the same time , our production at the project is still ramping up .

William Jing: Hi, thanks for taking my question. I have just one follow-up question about the mining strategy. Basically, we are seeing very strong production at the Hengjaya Mine, and at the same time, our production at the ENC project is still ramping up. Therefore, there should be a mismatch between the strong production at Hengjaya Mine, which produce limonite used in ENC production. I just wonder, in case that the limonite production is very strong, that outpace the need for limonite at ENC. Are we going to sell all those excess limonite production to a third party, or we are going to stockpile it until ENC reach its nameplate production and consume all the limonite? Because I guess we are going to exhaust all the RKAB quota this year so that we can keep the same quota or lift our quota next year.

Speaker #8: So , so therefore , there should be kind of like a mismatch between the strong production , which produces a limonite used in , production .

Speaker #8: So I just wonder, like in the case that the production is very strong, that it outpaces the need for limonite at NC. So are we going to sell all that excess limonite production to a third party?

Speaker #8: Or we're going to stockpile until, like, NC reaches its nameplate production and consume all the units? Yeah. Because I guess we are going to exhaust all the RCAP quota this year so that we can keep the same code or lift our quota next year.

Speaker #8: So, therefore, I think probably you guys want to produce, like, up to the AB quota. Yep.

William Jing: Therefore, I think probably you guys want to produce up to the RKAB quota. Yep.

Speaker #1: Yeah . Thanks , William . No , that's that's absolutely right . Our target is to is to get is to produce right up to the quota .

Justin Werner: Yeah. Thanks, William. No, that is absolutely right. Our target is to produce right up to the RKAB quota. At the moment, our strongest margins come from the saprolite, given the very good pricing that we are seeing there. We have 30 million tonnes stockpiled, so there is no risk of us running out of limonite for ENC, but we will continue to balance ENC's demands, along with ensuring that we hit our RKAB target. I think what is positive there is we have the flexibility of third-party limonite sales. At this point in time, they want to take everything that we produce. That is how we are sort of managing the RKAB and limonite sales.

Speaker #1: And so at the moment , our strongest margins come from the Saprolite . Given the very , very , very good pricing that that that that we're seeing there .

Speaker #1: And we have 30 million tonnes stockpiled . So , you know , we're there's there's no risk of us running out of limonite for for EMC , but we're just balancing .

Speaker #1: Ian . We'll continue to balance NCS demands along with ensuring that we , you know , hit our Arkab target . And I think what's positive there is we have the flexibility of of third party limonite sales .

Speaker #1: And at this point in time, they want to take everything that we produce. So that's how we're sort of managing the RCB and limonite sales.

Speaker #8: Oh , okay . Okay . Sure . Got it . Just one more follow up question on the Hvm . Sorry , the royalty on the based on the Hvm HPM price .

William Jing: Oh, okay. Sure. Got it. Just one more follow-up question on the royalty on the limonite, based on the HPM price. Basically, I think a few quarters ago, you guys mentioned that although the HPM for limonite is higher than the market price, but then actually the transactions for limonite are actually happening on a level which is lower than HPM. Which basically means that we need to pay more royalties based on higher-than-market-level HPM price. I just wonder if that changed or whether the buyers for the limonite is accepting a higher price, which basically means that we are not undertaking or paying more royalties than the market price than the HPM. Or it is like we are still paying royalties on the higher HPM price, but then selling the limonite at the market price. Sorry, maybe I am not being clear enough there.

Speaker #8: So so basically , I think a few quarters ago , you guys mentioned that the , the , although the PM . Is higher than the market price , but then the , the actually the transaction for laminitis are actually happening on the , on the , on level , which is lower than PM , which basically means that we need to pay more royalties based on the higher , higher than market level .

Speaker #8: PM price . So , so just wondering if that change or like whether the , whether like the buyers for the each laminitis are accepting a higher price , which basically means that we are not undertaking like paying more royalties than , than , than , than , than the , than , than , than the market price .

Speaker #8: Sorry . PM or it's like , like we're still like paying royalties more on the higher price , but then they're selling the , the market price .

Speaker #8: So , so I'm not , maybe I'm not being clear enough . Yes .

Speaker #1: No , I think I understand what you're saying . You're right that we are paying more royalties on , on , on limonite and we haven't seen any change in the market price .

Justin Werner: No, I think I understand what you are saying. You are right. We are paying more royalties on limonite, and we haven't seen any change in the market price. That market price has been pretty consistent for the last three years, sitting around that $20, $22 a tonne sale price. I don't think there will be any changes in that in the foreseeable future. But on the saprolite side, we have seen very strong growth in margins there, and that is really because of the increase in the HPM price there. I mean, if you look quarter on quarter, our Q1 average saprolite sale price was around $30, and then the June quarter, that had risen to $51.60. So we are making up margin in the saprolite.

Speaker #1: And that market price has been pretty consistent for sort of the last three years , sort of sitting . Sitting , sitting around that sort of , you know , 2020 , $22 a tonne sale price So that I don't think there'll be any changes in that in the in the foreseeable future .

Speaker #1: But on the Saprolite side , we've seen very strong growth in margins there . And that's really because of the the increase in the the HPM price there .

Speaker #1: So , I mean , if you look if you look quarter on quarter , our first quarter average Saprolite sale price was around $30 .

Speaker #1: And then the June quarter that that had risen to sort of $51 , 60 . So , you know , we're making up margin in the saprolite

Speaker #8: Okay. Yeah, that's all from me. Thank you.

William Jing: Okay. Yeah, that is all from me. Thank you.

Speaker #2: Your next question comes from the line of love . Pardon . Your next question comes of love . Sharma of .72 . Your line is open .

Operator 2: Your next question comes from line of Love.

Operator: Your next question comes from line of Love.

Justin Werner: Thanks, William.

Operator 2: Pardon. Your next question comes from Love Sharma of Point72. Your line is open.

Operator: Pardon. Your next question comes from Love Sharma of Point72. Your line is open.

Speaker #9: Yeah

Chris Shepherd: Yeah.

Speaker #10: Hi . Morning . So two questions from me . First one , if you can just highlight the working capital usage for the first half .

Love Sharma: Hi. Morning. So two questions from me. First one, if you can just highlight the working capital usage for the H1, and if you can break it down between Q1 and the Q2. It seems to be quite decent given the gap between your EBITDA and the operating cash flow. Second one, about the question about Tsingshan's ability to export and some disruption there. Did you mention that they have been paying you or pairing back to production? I did not catch that part. So if you could clarify some bit of that. Thanks.

Speaker #10: And if you can break it down between first quarter and the second quarter , it seems to be quite decent given the , the , the gap between your EBITDA and the operating cash flow And second one , I U about the question about zinc , Shantz , you know , ability to export and , and some , some disruption there .

Speaker #10: Did you mention that they have been paying you or paring back the production? I didn't catch that part, so if you could clarify a bit of that.

Speaker #10: Thanks

Speaker #1: Yeah. Chris, do you want to take the first part of that question?

Justin Werner: Yeah. Chris, do you want to take the first part of that question?

Speaker #4: Yeah , yeah . I can I don't have the exact numbers , but or split between the quarters at hand . We did have quite a large working capital build in , in Q1 .

Chris Shepherd: Yeah. I can. Love, I do not have the exact numbers or split between the quarters at hand. We did have quite a large working capital build in Q1, and a lot of that unwound in Q2. However, and that was working with Tsingshan, particularly around our trades receivable. We managed to really tighten up a lot of the days there.

Speaker #4: A lot of that unwound in Q2 . However , and that was working with Qingshan , particularly around our trades receivable . We managed to really tighten up a lot of the days there .

Speaker #4: And I think it's a testament—I'm talking about the NPI sales. I think it's a testament to our relationship there with them.

Justin Werner: I think it is a testament, I am talking about the NPI sales, I think it is a testament to our relationship there with them. I am happy to follow up with you with the specific numbers. I do not want to give out.

Chris Shepherd: I think it is a testament, I am talking about the NPI sales, I think it is a testament to our relationship there with them. I am happy to follow up with you with the specific numbers. I do not want to give out.

Speaker #4: I'm happy to follow up with you with specific numbers. I don't want to give them out right now.

Love Sharma: Yeah, sure. That will be very useful. But broadly speaking, Q1 was negative in terms of the working capital usage, and Q2 you had positive.

Speaker #10: Yeah , sure . That will be very useful . Yeah , but but broadly speaking , first quarter was negative in terms of the working capital usage .

Speaker #10: And second quarter, you had positive—

Justin Werner: It would improve it. Yes, that is correct.

Chris Shepherd: It would improve it. Yes, that is correct.

Speaker #4: It would improve it. Yes, that's correct.

Speaker #10: Okay . Understood . Okay . We will be good to get some numbers later . Thanks . And then the other question about zinc .

Love Sharma: Okay. Understand. Okay. Will be good to get some numbers later. Thanks. The other question about Tsingshan, if you could clarify what was it about the pared-back production, or I thought you said they pared back on.

Speaker #10: And you know , if you could clarify what was it about the the pared back production or I , I , I thought you said they paid , paid back .

Speaker #1: Yeah , yeah . And did announce that they , they were scaling back production out of two of their h pals that at Iwarp .

Justin Werner: Yeah. Tsingshan did announce that they were scaling back production out of, I believe, two of their HPALs at IWIP.

Speaker #10: Right . Okay . And and how does it impact you as of now or , or has there been a change in terms of your own , you know , production or output to .

Love Sharma: Right. Okay. How does it impact you as of now, or has there been a change in terms of your own production or output?

Speaker #1: No . Look , no , no impact for us . And , you know , probably a positive in terms of , you know , that's , that's , that's maybe higher , higher costs , MH p capacity that that's , that's not in the market So obviously means we can look to replace it with , with lower cost MH as , as EMC ramps up

Justin Werner: No, look, no impact for us and probably a positive in terms of that's higher cost MHP capacity that's not in the market. This means we can look to replace it with lower cost MHP as ENC ramps up.

Speaker #2: Thank you. That's all the time we have for today's Q&A. I would now like to pass the call back to Justin Werner for some closing remarks.

Operator 2: Thank you. That's all the time we have for today's Q&A. I will now like to pass the call back off to Justin Werner for some closing remarks.

Operator: Thank you. That's all the time we have for today's Q&A. I will now like to pass the call back off to Justin Werner for some closing remarks.

Speaker #1: I hope that thanks again everyone . Really just just to sort of hit on , you know , the , the fundamentals of the business and , and , and , you know , we've built the business historically on nickel , pig iron and mining .

Justin Werner: Look, thanks again, everyone. Really just to sort of hit on the fundamentals of the business. We have built the business historically on nickel pig iron and mining. Both of those segments look very good moving forward. We are now moving into the commissioning of the higher margin HPAL business along with the commissioning of or first production from Sampala, which is also an exciting milestone for the company. Coming back to the numbers that I mentioned at the end of the presentation, with the additional 1.1 million tonnes of nickel required by 2030 according to CRU, and a cap on NPI as well as a cap on MHP and HPAL out of Indonesia. We think that, looking forward, the integrated low-cost producers such as ourselves that have a diversified product across different segments of the nickel market, we are positioned very well.

Speaker #1: And both of those segments , look , look , very good moving forward . And then we're now moving into , you know , the commissioning and of , of , you know , the higher margin H pal business , along with , the , the commissioning of the first production from San parlor , which is also an exciting milestone for the company .

Speaker #1: And then coming back to , you know , the numbers that I , that I mentioned at the end of the presentation , you know , with an additional 1.1 million tons of nickel required by , by 2030 , according to Cru and a cap on NPI and as well as a cap on MH P and H pal out of Indonesia .

Speaker #1: We think that looking forward , the integrated low cost producers such as ourselves that that have a diversified product across different segments of the nickel market , we're positioned very well .

Speaker #1: And again , I think our leverage to the , to the nickel price , clearly demonstrated in , the first half , you know , 21% increase in MPI , 87% increase in EBITDA .

Justin Werner: Again, I think our leverage to the nickel price really demonstrated in H1, 21% increase in NPI, 87% increase in EBITDA. Look, thank you everyone. If you have any further questions, please don't hesitate to reach out to Chris or myself.

Speaker #1: So look , thank you , everyone . And if you have any further questions , please don't hesitate to reach out to to Chris and myself

Operator 2: Thank you. This concludes today's conference call. You may now disconnect.

Operator: Thank you. This concludes today's conference call. You may now disconnect.