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Earnings Transcript for NGLOY - Q4 Fiscal Year 2020

Mark Cutifani: Thank you very much, and welcome, everyone. I probably should give a little bit of a health warning at the start of the presentation. We are trying a new approach and a new technology. And so if there are any stuff-ups, it's my fault. It's not Paul's and it's not the operators. So we'll see how we go. The theme for our presentation is keeping our feet on the ground. And while I'm a believer in the strong fundamentals to demand in our industry and the likely constrain of supply in many of our products, the last thing I want to see in our team is anyone lifting their heads and forgetting about our focus on our continuing business transformation journey. So to be clear, we believe we have a portfolio of assets and opportunities that play favorably into the big global themes around climate change, circular economy and the growing importance of material sciences in finding new and exciting uses for our metals and minerals. We've been strategic in our outlook and positioning for a number of years, and today's world continues to confirm we are, mostly, more than ever, position to improve and grow our business, both in the short, medium and the longer term. I now move to the cautionary statement. You should read carefully, preferably in your own time. On Slide 3, our order of play is consistent with our established routines. I'll touch on performance and highlight a few key points. Stephen, or mister balance, will then run you through the numbers to provide detailed insights and to reinforce our focus on capital and our investment disciplines. And to close, I will take you through how we are transforming the business and positioning for today and the future. So again, next slide, please, on number 4. On safety, health and environment. For us, the improvement journey continues. First, on safety. Over the last 5 years, we've recorded a 40% reduction in total injuries and an 82% reduction in fatal incidents. For us, despite a couple of serious incidents early in the year, it was our best ever safety performance as we continue our journey towards zero. And as we say, no year is a good year if you've lost someone in your operations. And so we still have to get there, but we're getting very close. And from our point of view, everything is going in to get us there. Secondly, on health cases. Those issues are made up of less obvious or immediate hazards of risks in the business, we are also heading in the right direction. And again, significant improvement since 2013, about 95% reduction. So we're very proud of that performance. And on the environment, our improved planning and operating disciplines continue to support incident reductions across the group. And as people know, making sure we don't get that call in the middle of the night, requires constant focus, appropriate technical design, operating disciplines and an open and effective governance process to ensure we're doing the right things the right way all the time. And for us, we still haven't got to a point where we've eliminated all of our incidents and our early issues last year point to that. But I do want people to understand we're working very hard to eliminate all of those things from the business. And from our point of view, we've made significant progress. But we're certainly not yet where we want to be. I've now moved to Page 5. And on our broader ESG context, we continue to make good progress on our critical targets. Our energy efficiency improvements have also supported our greenhouse gas savings. And as you can see, we have met both improvement targets for 2020. Working off our 2016 baseline, and that's represented by the horizontal green bars that we have on those charts, our next step is an absolute reduction of 30% on both by 2030. On our social way compliance, and social way being our social standards and the practices package, per our broader operating model approach to business, you can see we are approaching full compliance across the group. Now as you know, these things evolve and develop over time. And so we have now designed the third-generation social way package that will be used as a new and higher bar to community and social engagement. And we would say, we've still got a long way to go. We haven't yet got our community relations where we want them to be. But again, just to let you know, we are working very hard in all of our communities and across all of our sites on this particular aspect of the business. The new package goes beyond industry benchmarks and has been imaginatively called Social Way 3.0, so a new industry standard with a title that only an engineer could love. Next slide. On COVID-19, despite the encouraging vaccine progress in many countries, it is clear the pandemic and the challenges for most are not going away quickly. Our responsible holistic approach, including supporting our communities, continues. And this broader community approach is an approach we share with many of our industry colleagues, particularly in jurisdictions where government support is less equipped to deal with these types of issues. And we have been taking these initiatives further, as we have understood when people in communities are under stress, domestic- and gender-based violence issues can grow. So we're working with our community leaders and governments to make sure we're dealing with all of the direct and indirect impacts of COVID. The lives and livelihoods of our employees, their families and the communities are the priority, and we've managed a strong operational recovery at the same time. We've been strengthening and reinforcing protocols to help deal with second waves affecting our operations as well. Our focus on people returning to work post-Christmas has been very important, and we've seen some impacts, but they're being managed effectively. And in anticipation of that post-Christmas surge, we put in extra levels of testing to identify and mitigate risks. Based on our latest data, we expect most of the site impacts will be negligible as we move into March. On demand for products, despite lockdowns and limitations, our order books are generally pretty full. And on diamonds, the demand bounce has been quite solid. So the early signs have been encouraging. But we do have some residual risks that will probably remain in some jurisdiction, probably to the mid year, but it's not significant. It's being managed. And from our point of view, I'd have to say the teams have done a great job in managing all the dimensions of the COVID-19 issue. On results, an encouraging finishing -- finish after a tough start to the year. Despite all the issues and dramas through the first half, we finished the year running at around 95% of full production capacity. But even more importantly and despite lower volumes, our unit costs and our capital spend were held in tight control. Along with the improving prices, we saw our second half EBITDA recover to $6.5 billion, our highest for a 6-month period since 2011. This recovery, and the disciplines that have gone with the learnings from the Q1 disruptions, have put us in a good position going into 2021. On earnings per share, $2.53 for the year or 1.81 or $1.81 in the second half. The full year return on capital employed, at 17%, was impacted by our higher capital base. We're spending on Quellaveco and the Sirius acquisition impacting the denominator for the calculation. We will show pre and post new project spend when we report these quarterly numbers going forward. However, the half -- the second half ROCE number was a pleasing 24%. So that's a good number. Hopefully, we're all now on Slide 8 and looking at our 4 key business segments. De Beers has been -- has seen sales picking up through the fourth quarter and continuing into 2021, with site 1 in January, delivering our highest site sales for 3 years. The team will continue to manage production levels to demand and have kept costs very well-managed through the process, with a 10% unit cost improvement year-on-year, despite 18% lower volumes. Given our broader restructuring, we expect to see more unit cost improvements through 2021, which the guys have done some really hard yards through the year, and we will continue to work through 2021. In copper and nickel, we've delivered consistent performance. In copper, we've navigated the twin challenges of water constraints and COVID, with production in the entire levels, despite the challenges. The effective implementation of social distancing in Chile and Brazil has been a model for all of our operations, with work on water and securing alternative sources in Chile being a real winner for the year. And our Peruvian guys have done great work there, Reuben and the crew in full support. On PGMs, a pleasing mining performance and processing production back to 100% levels by year-end. At the same time, the reinstalled A unit at the ACP has been running very well since late November, after a very careful and well-managed commissioning process by Natasha and the team. So we are looking forward to a better year of both mined and refined production. And with current strong spot prices, we're very well placed to deliver some strong margins and cash generation. In Bulks, Minas-Rio Rio has continued to improve. Another record performance in a year, when we were down for 1 month for the planned pipeline inspection, makes it a really an incredible performance. At Kumba, despite lower production, largely as a result of COVID, unit costs were 6% lower, at $31 a tonne, and it was a similar story in our South African thermal coal operations. In Met Coal, the spat between Australia and China still remains an issue, although the pricing gap is starting to close as the market adjusts now for deliveries to new customers or adjust to new deliveries for new customers. In addition, we've had our operating challenges. Most recent, the current longwall panel at Moranbah has been moving through some tough ground since last Saturday night, and we recorded a high carbon monoxide gas reading in the waste areas. Now carbon monoxide is a result of latent heating in the gulf area. So as per our protocols, we withdrew the workforce, and we commenced monitoring the gas from the gulf since that time. And by the end of the shift, the levels had actually returned to normal. Now we think that might have been the result of the gulf wall, but we're taking extra precautions, we're actually pumping nitrogen in to make sure that we don't have any further gas levels. And we'd expect to return to operations in the next 2 to 3 weeks. We are working with the inspector in Queensland, again, to make sure we've got all the angles covered. But at this stage, I think it is -- we have seen these things before. And it usually takes a week or 2 to get through them. So watching it carefully, but I think the guys have done a good job in handling it and certainly satisfied that all the issues have been covered. On Grosvenor, the key issue for us is the timing of the restart and the commissioning of the new longwall. We expect to restart sometime in the second half of the year, but we don't want to preempt the inquiry or its filings. And so we will be both patient and cautious in our approach. And so if I can go to the next slide, please. Okay. Consistent with growing cash flow and returns, you should be on Slide 9 -- consistent with growing cash flow and returns, for Anglo American, the improvement journey does continue. While we've reported a 43% margin for the year, our 47% margin in the second half was the eye catcher. Our 2023 target is greater than 45% using long term prices. And with Quellaveco and our other projects and the incremental projects we have, in the pipeline, we'd expect to hit those numbers. The long-term improvement approach has been driven by portfolio restructuring, our technical reconfiguration through Tony and his team and in his work with the operating leaders, of the assets that stayed within the portfolio, and the introduction of our industrial operating disciplines brought by the Anglo operating model. And that is unique to the industry. The total change package supported a 45% real improvement in our operating costs, or around 30% in nominal terms. And that's despite running 50% less assets. And that is -- we've actually grown production by around 12%. That's in 2019 numbers. Obviously, we've come back in '20. But again, we'll be back on that profile this year and beyond. And as I've said before, the improvement journey has no end in terms of what we see. In our Phase II work, we'll continue to drive up the benchmark performance curves on our capital assets, while building incremental and new capacity that has a lower cost structure, further supporting our margin growth. So it's not just about growth, it's about quality growth in terms of the portfolio. Now if we go to Slide 10 and looking forward, we have carefully sequenced the execution of our portfolio of incremental and new projects, which drive significant margin accretive production growth over the next 5 years and beyond. From a strategic perspective, this growth is also continuing our portfolio repositioning towards future-enabling commodities. And so our 20% growth by 2023, and that's compared to 2018, is more like 30% if we compare it to last year's production. And that is well underway. And the 25% by 2025 builds off our technology footprint and is as much about quality, as I said, as it is about top line growth. And our sequencing -- and with our sequencing, we are not trying to do too many things at the same time. That's being considered quite carefully in the way we've phased our projects. Now Stephen will step you through some of this later, but the 2 main new constituents in our stage growth process are Quellaveco and Woodsmith. On Quellaveco, we're tracking the original schedule, despite COVID. So whilst we picked up 6 months in the pre-COVID execution work, we've given most of that back to COVID. And whilst we are still dealing with some cases on site, we're at about 90% manning levels, and we've got the work focusing on the critical task item. So we do -- we're still doing very well on the schedule, and Tom and the guys have done a great job. We have also -- we have now also approved the installation of coarse particle recovery in the plant following very successful test work. So that will enhance overall production recovery, and we'll continue to improve the economics of the program as we try and bring our commissioning process forward in terms of additional production, which we can see we can do as a consequence of the latest drilling. The other thing that we've done is we're in the process of committing to fully renewable energy power, a fully renewable energy power contract, which will also improve our carbon emission credentials as part of the development of the project. At Woodsmith, progress is solid. The tunnel has now been driven to almost 13 kilometers of its 37-kilometer target. Our detailed technical review is nearing completion and confirms the quality of the overall project design and the development approach within the parameters we had set. Ahead of our scheduled mid-2021 update to the market, which will present final capital and schedule estimates, we are refining 2 aspects of the project that we had allowed for in our investment case. We will likely bring forward the investment in additional ventilation to increase early production flexibility, and we are working through the detailed scheduling of the 2 shaft installations. Based on our work and involvement so far, we're very happy with the asset and its market potential. And importantly, it sits in the Q1 of the cost curve and is therefore capable of some really attractive returns. And from our point of view, these are really important points to focus on. I will again stress the point that it's not a potash mine, it's polyhalite, 4 nutrients, low carbon footprint. We don't have to do all that downstream processing. And we can put product on a boat and ship it literally anyone and deliver it to almost any market in the world. This is a very different project to the ones you've been hearing about. And from our point of view, we think it's great potential. We're certainly very pleased with what we've got, based on everything we've seen so far. So if I go to the next slide, finally, and most importantly, on our business improvement focus, as I've said before, the first steps were in the operating model, setting a stable base, from which we use our P101 program, which is about getting all of our capital assets up to top industry performance, not in top quartile, we're talking top. P101 means best of the best to drive improving performance levels. To date, the team has delivered around $2 billion in raw numbers in the improvement, which is in terms of annual EBITDA on the business improvement side, through efficiencies and operational delivery. The more difficult issues, we've given some of that back due to the instability that we have in some parts of the process and the ACP failure in platinum is an example of that instability. So the opportunity to get that additional $1 billion back to the bottom line is around stability and consistency in the operation. That's a real focus in the operating model. Yes, we've come a lot of productivity to drop it say, out of that cost. But getting that stability to get to the next, that for Tony and his team and the operating leaders across the business. We're able to approach, but we where we would be. So with that, let me hand it over to Stephen.
Stephen Pearce: Thanks very much, Mark. And so you know, I'd like to the number [Technical Difficulty] operations cash flow and we'll work hard to recapture that in 2020. Two, return to your holders, now 40% paying ratio dividend; and three, a strong balance sheet and invest in the future. And that balance really sets us up for a strong and sustainable future. So on Slide 13, let's turn to the 2020 numbers our EBITDA, good recovery, $6.2 billion in the second half, a record since '11. Looking at the full year, strong present [ earnings ] results, this [ unit costs ] income challenges that we had. Earnings per share fairly consistent, and that then flows through to consistent dividends. Net debt at 0.6x EBITDA benefited from good prices, but more to come in terms of that story with the unwind of the working capital buildup that we had this year. Half 2, free cash flow, $3.3 billion drawn with SSA, without the help of the working capital. So if we turn to Slide 14, looking across the different venues, recovery of diamonds in the second half, strong mining margins, at 54%, which talks to the underlying quality and resilience of the assets, $650 million in revenue from site 1 in 2021. So encouraging recovery so far, helped by a decent selling season through Thanksgiving, Christmas, New Year, and lower rough and polished inventory. Copper, good performance on unit cost of 113 cents per pound, we had some additional noncash movements in provisions in the year. But again, [indiscernible] margins. PGMs, good recovery in the second half, plus price on spots around or above 3,000 PGM an ounce. And remember that 60% had previously known as minor metals. Obviously [indiscernible]. Even with the ACP disruption, last year, we generated, I think, $2 billion of revenue from palladium and $2 billion from radium [indiscernible] '21, the DA which as we mentioned, would be most likely [ business in dollars ]. In [indiscernible], Minas-Rio has been our outstanding performer, gaining good stability into driving the sales in here at 24 million tonnes of high iron content product. That is $1.9 billion of EBITDA [indiscernible] 2%. Our convert margin was 55% and an 80% return on capital employed year. Clearly we see the prices that those higher-quality products from both Minas and Kumba, we believe [indiscernible] managing steel industry. Clearly, a topic for met coal that improved prices totally persist into 2021. So overall, a good set of numbers, and particularly pleasing with the recovery through the second half. And just before I leave this slide, I encourage you to play with all the spreadsheet that I think is the first-line and please form your own view on forward prices across the year. But I would note if you won't ask moving [indiscernible], if you put in spots from a couple of weeks ago, you could well end up with a number [indiscernible] all it does work. Turning to slide [indiscernible], a quick look at drivers of EBITDA shows that overall, we're at relatively consistent levels, even with the volatility for price, COVID and operational disruptions. Importantly, as I mentioned, we are seeing underlying cost and volume improvements, primarily this period of copper in Minas-Rio, but we are very focused on turning on as operating challenges at PGMs and met coal going forward. So I think you see the improvements drop to the bottom line and I'll expand on that a little bit more on to the next slide [indiscernible]. [indiscernible] on Slide 16. The half as shown a bit of help from PGM improvement, core net debt down to the $0.5 billion and as well with our target gearing at a ratio of 0.6 [indiscernible]. [indiscernible] very well to stage of delivery. Just to remind you $5.6 billion of net debt includes $1 billion of [indiscernible] accounting [indiscernible] $1.6 billion for inventory build all through the year, largely in PGMs and diamonds and particularly in PGM, where we're used to see that unwind over the [ year ], so actually in a very good position, a strong balance sheet, a strong pipeline value [indiscernible] to able to retain good returns to shareholders. If we go to slide [indiscernible] favorably balanced, reposition the portfolio when required and return cash to shareholders. So mentioned good cash across the period, $2.7 billion after funding sustaining capital with $3.3 billion in the second half. As such, we use that to support the payout ratio based item with a total of $1.2 billion declared for 2020. We allocated $1.4 billion in terms of growth CapEx, $0.7 billion in terms of the acquisition of Sirius minerals and a further piece of the puzzle, $0.2 billion remains from a $1 billion share buyback scheme that we initiated in July '19 and completed early in 2020. So if we turn to Slide 18 and just over the next couple of slides, I want to spend a little bit of time just focusing on CapEx. I know there's a few questions out there to understand the timing, particularly in how that relates to the volumes. And so I'll focus and talk through in detail, both in terms of sustaining and growth CapEx, and hopefully, you get a better understanding of some of our priorities. Just to be clear, there's no change to previous guidance on CapEx that we provided back in December. So let's have a first look at sustaining CapEx on this slide. You can see that there's a long-term sustaining CapEx level around that $3 billion as our portfolio evolves and Lifex [ aimed ] is on top of that, and that will be a little bit variable. We are seeing slightly elevated levels of Lifex CapEx over the next couple of years, around that $700 million to $900 million per year, and that's as we complete the development of projects that you know around Venetia underground, Aquila and Kolomela. Longer term average, more around that region of $500 million per year. The underlying sustaining CapEx is also a touch higher in the next couple of years. The main drivers being the deferral of spend from 2020 and as we reprogram those work streams over the next year or 2. We've also included the desalination plant at Collahuasi. It's probably a combination of sustaining and growth that supports both current water requirements and wider expansion of Collahuasi, which I'll come onto in a moment. And so it's probably a combination of growth and sustaining. Needless to say, there's some growth -- I mean better numbers simply linked to the growth in the portfolio, a copper unit equivalent basis as we deliver that growth. So let's now look at growth CapEx on Slide 19. So in terms of growth CapEx, again, I'll walk you through a couple of slides just to provide a bit more clarity on what we're setting up here, particularly in terms of that growth CapEx and how that links to delivering the growth volumes over time. Again, just to emphasize, no change to the guidance that we provided back in December. So if we exclude Woodsmith just for the moment, growth CapEx per year around $1.5 billion to $2 billion over the next 3 years. And with that, we see our copper equivalent production increasing by around at 20% by 2023 of that 2018 base. It's disciplined, it's margin accretive and predominantly focused around forward-facing or future enabling portfolio, it's technology friendly and links directly to the decarbonization agenda that we have in many cases. The CapEx that's forecast on this slide out to '23 also provides some of the earlier spend on some of that volume growth beyond 2023 on projects that we do anticipate approving in that interim period. For example, Collahuasi Phase I, Mohali cline and the MG plant debottlenecking. We go to Slide 20, please. So let's look at some of those projects in detail. Each case, attractive IRRs. And as Mark mentioned, they're well sequenced across time so that we managed to spend in the balance sheet appropriately. Quellaveco, as Mark mentioned, progressing well, our share remaining around that 1.5 billion over the next 18 months or so. In 2023, we expect to see copper production of 300,000 to 350,000 tonnes. That adds, in its own right, around 10% to our overall copper equivalent volume. At spots from about 2 weeks ago, obviously, it's a fast-moving at least from about 2 weeks ago, that would give us EBITDA of around $1 billion in 2022 and more than $2 billion in 2023 on a 100% basis. Another project on the Marine Namibia new vessel, the AMP 3, again on time for delivery. It's a fast returning brownfield project, adds around 500,000 carats at a very high-value per carat on a 100% basis. And for us, it adds about 1% in copper equivalent volumes for our 50% share. Turning to Collahuasi, it's clearly a world-class long life asset, and we're looking at efficient and incremental growth over time in a number of phases. Phase I, which see us adding additional mill and related infrastructure our CapEx while still being refined around [ 1 billion ]. Phase I increased throughput by around 20%, moving from about 160,000 to 200,000 tonnes per day. This equates to about 50,000 tonnes per annum of additional copper for our share. And that's about copper equivalent production growth at the group level. We'll also progressively look at technology initiatives, such as bulk ore sorting to further optimize the operation, but that's more likely to be in a Phase II expansion. Those studies are underway. That would most likely be a full fourth line expansion, increasing throughput to around 300,000 tonnes per day. And that would add about 100,000 tonnes of copper equivalent production in our share. Obviously, we will require new permits, and it's a little early to provide capital units on that just at this stage. [ Cliner ], a long life asset, we've almost already doubled production over the last 8 years, without spending major capital. The focus has been on embedding the operating model and production efficiencies. And while we'll continue to drive efficiencies, the next stage will require some debottlenecking. And it's likely that we'll add some additional concentrator capacity, which will add around 300,000 to 600,000 PGM ounces of production. While still being refined, it's expected to cost between around $0.8 billion to $1.4 billion. And again, we take a technology focus and the studies to analyze this are underway through 2021. So if I could then turn to Slide 21. So if we look beyond 2023, you would have seen earlier this week, we approved the Sishen UHDMS project. It adds iron units to existing production, if you assume that we're well constrained by increasing iron grade and quality of product. And importantly, the Sishen adds 3 -- at least 3 to 4 years of mine life. In terms of Woodsmith, as Mark mentioned, the Q1 cost curve asset with strong margins. We've committed to spend around $0.5 billion this year, and we'll provide further guidance in July. [ In this iron market], it would add around 5% to our copper equivalent production when it's fully ramped up to that 10 million tonnes production level. And Moranbah-Grosvenor, again a brownfield debottlenecking plant -- debottlenecking of the wash plant. Immediate focus, though, does remain bringing Grosvenor safely back in H2. But when completed, would add around 3% copper equivalent growth in around 2024. And finally, on the technology projects, there's a number of fast payback, relatively small individual investments, and there's quite a bit more detail provided in the appendix. Programs such as the bulk ore sorting, or the coarse particle rotation projects, cost competitive, modernize the operations to set us up on a more sustainable basis. For example, the hydrogen haul trucks and really underpin that journey as we move forward. So if we move to Slide 22, just to pull those themes together across the 3 pillars, as we've spoken about on our journey through to 2022. The 3 pillars
Mark Cutifani: Thanks, Stephen. And now we'll look more broadly and forward across the business. I am now on Page 25. So on diamonds, at an industry level, the fundamentals continue to improve. Our views on a positive recovery are simply built on industry fundamentals and the associated buying behaviors of our customers. First, on demand, demand has been steady and the outlook looks pretty encouraging. So given long-term and most recent experience, we expect demand to continue to follow global GDP and perhaps more importantly, for a luxury good, personal disposable income, or PDI. Both GDP and PDI are expected to grow by around 3% per year over the next decade as the middle class is growing in size and their aspiration to grow as we better target advertising and key customer segments. In China, currently, the second biggest diamond market after the U.S., Chinese middle classes are expected to purchase around $1 billion worth of diamond jewelry over this same period. Globally, the demand profile is shifting towards female self-purchasing, now making up almost 1/3 of diamond jewelry purchases. And the continuing shift in focus on branding and provenance is something De Beers has lead for many years. On supply, looking forward in terms of natural diamond production, it's generally agreed the industry is on a flat to declining production trajectory. There has been a lack of significant kimberlite discoveries most recently, and that's on a global basis. In addition, some 15% of existing supply by volume has been taken off stream or has reached the end of its mine life. The combination of growth in consumer demand for diamond jewelry and the flat to declining production, points to good prospects for the diamond industry, both in the medium to longer term. Certainly, we expect the recovery to continue in 2021 off those fundamentals. On De Beers and our branding story, and this has really been the most significant part of Bruce and team's work most recently, we're building off the De Beers brand and tailoring our offering to target segments. That is a key to the driving price for only the best philosophy that we have in De Beers. Our drive towards longer-term margin improvement is built from our COVID response, with the accelerated business transformation necessitated by our stark first half reality being a key player in driving the necessary modernization business with more efficient inventory management, increased online purchasing and growing consumer design for products with demonstrable ethical and sustainability credentials, including an enhanced depreciation of the natural world, really have been key considerations in the evolution of our change model. These are all messages that are resonating and consistent with the Anglo American and De Beers branding positions. The De Beers' focus on continuing cost reduction reflects what all good businesses should be doing. And shortening production to customer times, increasing our own jewelry business offerings and premium brands are all part of a strategic remaking of the business, all connected through digital technologies in mining, processing, cutting, selling, tracing. They're all part of the strategic makeover Bruce and Tony and their teams in terms of technology application are joined at the hip. Consistent with our De Beers strategy, our Lightbox strategy for lab-grown products has also been an important part of our strategic approach to different market segments. De Beers is all about natural products that reflect and recognize every natural diamond is special or one of a kind, a measure of a personal commitment on our very most, or our most special personal relationships. On Lightbox, a fun fashion lab-grown product with growing discounts, now around 60% to 70% compared to the natural product. And from our point of view, a good market to be in, but sub market to the naturals. And whilst that's not a simple 2-market piece, what we are seeing is the differentiation of those 2 segments in people's mind increases over time. And Bruce and the team are very sensitive to make sure the messaging is right in both context. Now to go to Slide 27. On PGMs, we have another sector with strong fundamentals and a great long-term potential. Obviously, the news from Russia overnight probably increases the short-term potential, given palladium and nickel impacts. PGM pricing is also being driven by strong fundamentals on a broader basis. The strength in demand with mixed supplies resulted in a 50% increase in PGM basket price in 2020, and this strength in pricing has obviously continued into the new year. On the demand side, ever-increasing emission standards is crucial for the auto industry and means higher loadings of PGMs. We believe a 40% increase in loadings in 2029 is quite possible. In particular, tighter emission standards in both Europe and China are driving demand for palladium and rhodium, both are currently in deficit. Palladium is expected by many to remain in deficit for at least 2 to 3 years, even after taking into account a 10% substitution to platinum. And in our case, it's not a bad thing. We're happy to see platinum pick up more market. But again, when we look at platinum, it's the all-round PGM, a diverse range of other demand sources continue to emerge
Operator: [Operator Instructions] And your first question comes from the line of Jason Fairclough from Bank of America.
Jason Fairclough: So I wanted to come back to a line of questioning from your business update in December, which is on technology. So Tony gets $1 billion to invest in these high-return, fast payback projects. I think you spent $200 million so far. And I was just looking through your Slide 49, and I think Stephen mentioned this coarse particle flotation retrofit, if we can call it that, at Quellaveco and he says 3% improvement in recoveries over the life of the mine. Now to me, that's huge. That's absolutely huge, right? And if we're talking $250 million EBITDA benefit per year. I guess the question is, why aren't you pushing this out at other properties as fast as possible? Why can't you be more agile with these technology initiatives?
Mark Cutifani: Jason, I'll make one comment and hand it across to Tony. Each ore body is different. And so the approach has to be different. So with that, I'll hand across to Tony, and he'll give you the real technical story. Tony?
Anthony O’Neill: Yes. Thanks, Mark. Jason, good to hear you. Quellaveco, we're really chasing the [ super G ] upfront, and that's why we've really accelerated that. Across the company, though, we've got enough sprints. And the technology, what we found with these sprints where we are able to move it much, much quicker. We've got other stuff we haven't talked about, for example, our microwave technology that we're trialing or trial. We've got the heap leaching technology, really quite amazing. We -- I think the rate-limiting step for us at the moment is basically getting approvals through the statutory side of things. The guys in copper have had days with the Chilean government people, and they've been fantastic. We've just got to see that now manifest into, if you like, an accelerated approval process. That's the rate-limiting step at this point.
Mark Cutifani: I think that's the important point to make, Jason.
Jason Fairclough: Okay, Mark. So just in terms of some of the other properties, I mean, you're saying that you're putting it in place at Mogalakwena and then the potential rollout at Los Bronces, maybe even Collahuasi. Can we be talking about a 3% improvement in recovery at these other properties? Or it's not going to be quite as beneficial?
Anthony O’Neill: Listen, Jason, really, to Mark's point, the horses per [ corpses ], it's certainly in the design from Mogalakwena. At Los Bronces, we actually, in the initial phase, has put it down to the Los Bronces. So we see it's different, depending on each site, basically.
Mark Cutifani: It's fair to say that in some cases, we might get a little more volume versus recovery because that's a more effective outcome, depending on the ore body capacity.
Anthony O’Neill: Yes, that's correct. I think the other part on CBR, apart from the value, the -- we have -- in May this year, we will have -- I mean a new tailings trial commissioned in El Soldado. So it's key for us not only for value, but basically moving away for into engineered tailings dam. It's a key part of our strategy. And we're driving it as hard as we can.
Operator: And the next question comes from the line of Alain Gabriel from Morgan Stanley.
Alain Gabriel: I have 2 questions from my side. As the first one, so on current spot prices, would almost being debt-free by year-end. Is your dividend this year up for debate internally? And are you going to make any changes to your payout to match your peers, in spite of your superior cost profile? That's the first question.
Mark Cutifani: Well, I'll give the first one to Stephen. Stephen, your turn.
Stephen Pearce: Listen, we're comfortable with the base payout given, call it, yesterday's realistic expectation of prices. But that doesn't mean that we can't, to any reporting period, stop, and in fact, we do as part of that capital allocation cycle, stop and consider any other forms of additional returns to shareholders. You saw that, what's now 18 months ago, of July 19, I think it was, we announced the $1 billion buyback. So it's something that we do think about. It's something that we actively discuss and something that actively consider. If prices continue, then obviously, that challenge comes nearer term even with the growth spend. But I'd probably see that has been in the form of some sort of special return above the base. Remembering, the beauty of the payout ratio is that, that also increases in terms of amount as profits increase. And so 40% of a couple of billion is bigger than 40%, $1 billion. So it sort of naturally adjusts in addition to considering additional returns.
Alain Gabriel: And the second question, Mark, is on the PGMs business. So you've touched on the issues that have been faced by your competitors in Russia. How do you think if these issues eventually turn out to be more frequent or structural, how is that impacting your thinking around PGMs? Do you have scope to accelerate some other projects? How do you think about the business holistically in that context?
Mark Cutifani: Well, firstly, we don't know how structural the challenges are. Obviously, the processing side is more readily fixable. The mining side, I don't have better information at this stage. You may have better information than it does at this stage. But it does -- it's an issue for the industry because what we don't want to see are PGMs rushed away too far in terms of pricing and encouraging alternatives. But certainly, in terms of application, the PGM suite are attractive for a whole range of reasons, rhodium, for example. So we're watching it carefully, our ability to accelerate. We are already improving at Amandelbult. At Mogalakwena, we've got incremental improvements planned. And most have to be planned out carefully because we've got communities that we've got to make sure that we've got good relationships as we grow the business. And we've got other assets where the people are aware of what they're taking over. So we've got the ability to accelerate and get bigger. But we still think it's a bit too early to call anything big. And from our point of view, probably best to debottle -- continue our debottlenecking and improving the processing operations, and making sure we're getting the best bang from our buck for our internally sourced products by getting our cost down. So we can't build and improve, but we'll watch the market and we look for a few more signs. But certainly very encouraging at the moment.
Operator: And your next question comes from the line of Jack O’Brien from Goldman Sachs.
Jack O’Brien: My question is a high-level general one, as we are seeing moves from some jurisdictions or countries potentially making mine development more challenging. And I was just wondering from a sort of business risk perspective, whether you see that applicable to any of your jurisdictions, whether that's something that -- it keeps you up at night and it's sort of a meaningful risk for Anglo?
Mark Cutifani: Jack, it's something we always think about. We really pushed the sustainability agenda from '13, '14 really hard. We built the technical team under Tony. And we built the Corporate Relations team under Anik because we thought there were 2 critical areas of the future that you had to get right and you had to make sure that you were connecting well with communities, regional governments and federal governments. And the living mining concept that Tony's been talking to for those that know the product will have a sense of what we've got in our heads and innate work in such a way and making sure those 2 pieces connect is a really strategic approach to making sure we're developing partnerships, and we don't have this old paternalistic management approach to managing communities. I mean you don't manage communities, you have to partner with communities, whether that's on heritage issues or whether that's on mine development or whether that's the work we do in the communities in developing jobs. And our sustainability targets on being a catalyst for 5 jobs for every 1 job on site. If you're doing those sorts of things, you're going to have lots of problems getting your projects away. But I think, look at Quellaveco as a good example. Peru has had a history of challenges. And I think so far, Thomas has done a fantastic job in connecting with the local communities. That's the sort of stuff we have to do to be successful. So it's a big issue. It's a long term issue, and you really have to treat it as a strategic issue from our point of view.
Stephen Pearce: Mark, if I might just add. It can be underestimated a little bit of the ease of bringing on additional projects or supply because it does take time to work through, I should say, with a community or as Tony mentioned, permitting with authorities. And that could be a rate limiter on the supply side as we go forward.
Mark Cutifani: Yes, that's going to be -- we think that's biggest 15-year time line to get a new project up.
Jack O’Brien: No, no, I was just going to add it. Obviously, it's something with a potential new constitution in Chile next year, with some comments from Biden, I know that more relates to oil and gas, but it just feels like things are getting incrementally harder and so I know it's quite a general question, but it's just something I'm considering more broadly. Perhaps just one follow-up, if I may. Obviously, you mentioned that at current spots, '21 earnings look pretty good, obviously, from a balance sheet position, some interesting -- some very interesting initiatives. I mean, what are the things that you are sort of most concerned about from a risk perspective, if at all?
Mark Cutifani: Look, somebody asked me the question about resource nationalism. I don't worry too much around resource nationalism in terms of relationship. We have got a diversified portfolio. That's a big advantage. Geographically diversified. And we continue to improve our relationships in most of those jurisdictions, but we still have a lot to do it. We've started to do a lot of work. What worries me for the industry is where we have incidents, whether it's a safety issue, whether it's an environmental issue, whether it's a heritage issue. These sorts of things tend to harden up regulators in dealing with the industry in an open and constructive way. So we've all got to do better, connect better and help communities understand what we actually do in society. A lot of people don't realize that the mining industry drives 25% gross GDP through 10% on a denomination basis, another 10% through the services that we use to provide the products we produce. And then we drive industry's ability to be more competitive. And people don't understand that you need copper and nickel and all of these things to decarbonize the world's economy. So we've got to get our message out there much better than we have. Our plate base work, for example, is about getting the 2 billion people that are really influential with NGOs and helping them understand what work we to do and how we're trying to partner. And we're changing the nature of global conversations around mining. We all have to do it, or the world is not going to be an easy place to live without mining. And we have a commitment and a dedication to make sure we get the story at the right way.
Operator: And your next question comes from the line of Chris [ Yosofino ] from Jefferies.
Unidentified Analyst: Mark, you've talked about a regional strategy, which is, I guess, about bringing online incremental volumes at low unit cost, moving cost curves, generating high returns long haul, which is obviously a smart way to run the business. If we're in a multiyear period, let's say, a very high commodity prices, is it okay, first of all, to bring online capacity that might be much higher on the cost curve? And if so, where is there operational flexibility for intentionally capitalize on this period of very high prices?
Mark Cutifani: So we are really sensitive to bring on high-cost capacity, or we wouldn't go out and buy new capacity at high cost because we think longer-term that lost economy. There will be volatility. We think we know resources, we understand how to get the best of them. And we do things like the UHDMS project at Kumba. Kumba used to be really high cost, used to cost $77 a tonne breakeven cost into China. Today, it's in the 30s. So we halved our cost and we've got the ability to bring on new technologies to get more production. And those are the sort of smart things we can do. Tony, do you want to talk about some of the technology stuff that you're driving in terms of the volumes across the business, the money strategies in terms of those -- that question?
Anthony O’Neill: Look, I think it's really about value. And we look at the ore bodies, 0 rate per hour or dollars per hour, how do we push more through the whole system. So things like bulk ore sorting and bulk ore sorting is now effectively handed over to the business units and it's for them included in their businesses. The microwave technology, the CPR are all about fundamentally shifting the rates where possible, probably up 20%, 25%. So we concentrate on that. We've got a really good strategic understanding of our ore bodies. I think it's important that we, to Mark's point, keep our discipline. And you could -- in previous cycles, we've seen everyone blow their heads off. And I think before if we can keep our discipline, push through these extra tons where we've got them, then I think it actually helps us reposition further again.
Mark Cutifani: So we don't want to add too much volume to a market and take the steam out of it. What we're trying to do is be smart in the way we allocate our capital, get the best returns, hold our margins and at the same time, keep an eye on when this will turn the other way and not get caught. And I think that's a really important discipline to keep in the business. That's why from the outset, we're keeping our feet on the ground.
Unidentified Analyst: Sorry, just as a follow-up to that, if we're not talking about any significant changes to strategy, it looks like you'll be generating enormous amounts of free cash flow. Balance sheet is already strong. This question was sort of asked earlier, but just kind of a follow-up on this. In terms of capital allocation, should we expect surplus cash flow to just be returned to shareholders? Is that going to be the model going forward? or is it possible that you start to invest more aggressively in the business? I mean, how do we think about that surplus cash flow being the balance sheet is already strong cash generation is so strong already?
Mark Cutifani: Well, let me take Stephen's word, balance. We think too many times in our industry, we forget about that word, and it's a really important word. So we're investing in the right things to back. We saw a great opportunity in Sirius, and we're certainly very pleased with what we've seen. So far we've got a pipeline of opportunities that we see. We're not looking to jump all over the place, we're going to keep that discipline. If we do see an opportunity out there, look at but we've got to think long and hard about where it fits longer term. We're not going to do short-term stuff that doesn't make sense. So we're going to keep the discipline, create strategy. And as Stephen said, and he talked to, is making sure that capital discipline or allocation is right, and we're very happy to return money to shareholders on the basis that seem to like it.
Stephen Pearce: Chris, from my perspective, when the CEO and a technical director are talking balance and discipline, my job is done.
Operator: And your next question comes from the line of Liam Fitzpatrick from Deutsche Bank.
Liam Fitzpatrick: Two questions, please. Firstly, on De Beers. For 2019, De Beers was generally averaging around $1.4 billion in EBITDA per annum. Given what you're seeing today in terms of demand recovery, is there any reason that you're seeing that it doesn't reach or exceed that type of level in 2021? And then second question on the group structure. I know today, everything looks very bullish, and it's going well in terms of cash flows, et cetera. But a lot of that is still view Anglo as a relatively complicated business. You've got 2 subsidiary listing to NSA. They are a large priority through the group, et cetera. So the U.S.A. management team believe these complications impact the group in terms of this rating? And is there any current thinking or plans on how you could simplify the group going forward, whether that's through divestments or consolidating minorities. And I'm thinking beyond the coal divestments that you've already mentioned.
Mark Cutifani: Yes, 2 good questions. Firstly, on De Beers, Bruce and the team had the same cash flow return and sustainability targets we have across the industry -- the company, and they compete for capital. And certainly, we expect with the new strategy, Bruce should be able to deliver beyond those numbers. We talked about [ 1.4 ], he certainly got a higher target than that. But at the same time, you've got to be careful in forecasting how quickly the business recovers is something we'll work carefully through 2021. But I think his strategy is right. I think the focus and understanding and playing to our brand strategy, which is something that we've rebuilt after we've got the De Beers brand back in the stable, I think that was a really important strategic move. The success of Forevermark, the success of the work he's done in China. The work on Lightbox and differentiating between the naturals, I think, they are all things that will help us get back to those numbers and better. And certainly, that's where we're taking the business. And again, we're very excited by what Bruce is doing in the hard yards he's taking, the demands, we're confident and certainly big support of what Bruce and the guys have done. In terms of complexity, one thing that we would certainly like is for some of those relationships to be a little bit easier. But at the same time, we're not about to go and do something for the sake of just doing it and blowing value. So we have all those types of issues on our radar, and there are certain things we'd like to point. So there's no doubt about that, making it an easier entity to analyze is very important to us. That's why Paul has put his business under pay. And certainly, we had great feedback in being demising it all people. There's a lot more stuff we can do. And let me say it's all on our radar. But at the same time, we look to do those sorts of things for value. And in time, we'll do it.
Stephen Pearce: Mark, if I could just add, obviously, the diamond market is coming back nicely at the moment, but we do remain as cautiously optimistic through '21. So I would love it to be there in '21, but really getting back to that level is probably a multiyear journey. Hopefully, stability, the profitability comes back to that market. But certainly, those targets are there over a number of years to mean exceed those previous profit levels. I'm a big fan of simplicity in capital structures. And yes, we are somewhat complex. We've halved the number of assets, as everyone knows, over the last sort of 5 to 7 years. I suppose we will continue to look for opportunities to simplify. But as Mark says, it's about discipline and value. And they are paramount in anything that we would consider.
Liam Fitzpatrick: Is it fair to say that any kind of simplification from here is more about structure and minorities rather than shedding more assets?
Mark Cutifani: Yes. Yes. Yes. We like the portfolio we have. There's always a process of renewal and improvement. So that one, we're pretty happy with what we've got generally. We always incrementally improve, and we're growing in different areas. But there are certain things we understand we could simplify things. I think but some of those things occur naturally at the time. So we don't need to rush but we certainly are focused on those types of opportunities and get there as quick as we can.
Operator: Your next question comes from the line of Sylvain Brunet from Exane BNP Paribas.
Sylvain Brunet: Well done on the H2 performance. My first question is on working cap in diamonds. With a strong catch-up that you guys could quote later part of the year, the 5% price increase in January. It looks like conditions are probably stronger than most of as expected. Is there, okay, could we expect a faster unwind of inventory in the course of H1 already? That's my first question. My second one is on PGMs and really reflecting on your Slide 27, when you're showing an increase in earnings with EU7 and China 7 standards coming by 2025. And if you could perhaps help us understand if some PGMs are going to be impacted more than others? Is it more of a gold and palladium story, which would exclude the restock we're seeing at the moment? Or would you say those standards would impact all the 3 of them in a symmetric way? My last question is on emissions. When we look at [ source of ] emissions, and Mark, you mentioned that fugitive methane emissions are [indiscernible] a bit share of your Scope 1 in met coal. I know the core leg of the strategy mainly about thermal. But if you only stay ahead of the curve on this theme is not a time to also consider met coal as a little bit more problematic than is usually perceived. And obviously, you had some operational issues at Moranbah, we've seen China pushing back on imports. I'm just wondering whether it is still worth deploying technology, CapEx and time in a business which is facing so many headwinds. Thanks.
Mark Cutifani: Okay. So Stephen, do you want to pick up the De Beers, and then I'll pick up the PGM and the met coal.
Stephen Pearce: Yes. Thanks, Mark. So we finished the last quarter last year resale with some good sites and therefore, good volume pull-through. And I should say that continued through site 1 and hopefully, through this first quarter. So I would expect any of that excess time inventory to largely worked a play out of De Beers through that first quarter. And we're on track to do that at this stage. So the focus for us on working capital then largely moved to a PGM buildup that we had. We've done a lot of work, and the team have done enormous amount of planning out over the next 12 plus months, but that will take us a little bit longer as we see it today, but we continue to look for opportunities to unwind that working capital as well. Thanks, Mark.
Mark Cutifani: Thanks, Stephen. Look, on the PGMs, it's a very good question. And as you know, there's also rhodium now it's in the mix as well. When you look at the hydrogen, where we produce, I think it's around 100,000 ounces of rhodium, it's up near 30,000 now. So all of these things are becoming quite interesting as we -- as the vehicle emissions are being dealt with, and we're getting the hydrogen economy and demand -- the demand source is really important. Whether the PGMs will be impacted on a symmetrical way will depend on price. I think platinum will still be increasing its substitution across on palladium, albeit that will take a bit of time. Rhodium at 20,000 to 25,000 worries me a little on the demand side. But because of its ability to clean NOx emissions at low temperatures, it remains a favored technology. But in those sort of numbers, I think the pressure will be to pull it back at around 10,000 to 12,000. I don't think there's issue for rhodium but 25,000 it's a bit higher. So depending on the price you're assuming, yes, I think there will be some asymmetry, which will probably favor platinum demand as we go forward. And the other one will sort of adjust, based on the relative prices between the 3. So your guess is as good as mine as how that will play out, but that's how we see it at the moment. On met coal, you're right in saying methane and emissions that we're focusing on. Tony, do you want to talk about Pierre's work and how we're thinking about broadly the emissions, but in particular, the handling of the leak and the research work we're doing.
Anthony O’Neill: Look, we -- a, Mark. We are working on burn and methane. We currently burn a percentage of that, but we are looking at technological approaches to actually lift our rate of, I guess, disruption to a much higher level. The early days are promising. But it's a little bit too early at this point to quarterly at how that will pan out.
Mark Cutifani: I think, Mark, since -- yes, yes, thanks, Tony. I think 2016, just to add the second part of that question about whether we should continue to invest in met coal. Look, from our point of view, all the businesses compete for capital. We've got some great assets on the ground. So we'll nurture those assets and make sure we get ourselves back up to full rate. The business has generated, I think about $5.5 billion free cash flow since '16. So Seamus have done a great job. We'll get it back up there. And probably take us the best part of this year with the Grosvenor retake and Moranbah but it is a great business. It is worth the effort. Certainly, the returns are there. We've got a great team, probably the leading I think in Australia and the coal industry, certainly by numbers. So yes, we're still there. We're going to stick with the -- they've done a good job. It has great earnings potential, and we've posted a pretty good set of results without much from coal. So Seamus will come back and the team will come roaring back in the next year.
Operator: And our next question comes from the line of Ian Rossouw from Barclays.
Ian Rossouw: Mark, you mentioned a comment about the community relations and you're not where you want to be. Could you provide a bit more color on this? And I guess, what do you need to do to fix that? And then maybe just related to that, your PGM assets, I guess, with the disposal of [indiscernible], you you've gained it from most of the assets you've sold now, but your key assets now are 100% owned. Is there plans to, I guess, involve some of the communities in some of these sort of asset sharing in the asset equity stake? And then just a second question on Cerrejón, it seems like the process is getting a little bit longer than what you alluded to in terms of the exit there versus what you said in December. I was just curious what's causing that delay? And just now that you've given an intention to exit that asset, I just wanted to get a sense of what your case are within the JV, whether you need to [indiscernible]
Mark Cutifani: Okay. Is -- let me -- we don't believe this industry, this is Anglo, we don't believe as an industry we [indiscernible] good communities. And there'll be all the -- and I'm not pointing the finger anywhere. I'm saying we've all got a lot of work to do. For those that have tracked our faith-based engagements and some of our other community in the conversations stuff that we on South Africa, it's all of the [indiscernible] people values, their beliefs to ensure we connect with the way in South Africa, we're on a journey. We're on a journey of our communities. In some cases, our relocation is done pretty well. We just based up [indiscernible] in general. We have still got more difficult now for I think a [indiscernible] reset we make press [indiscernible] what we've got to do to engage a guiding show that we really incredible ability to not living or maturing where we go. I don't think we've [indiscernible]. So we're moving all of our things and the commitment to the Social Way 3.0 is all about taking that up another level. And so what I'm saying is I'm making an observation of our industry. And [indiscernible] we brought some large environment for the [indiscernible], but when you [indiscernible] impact [indiscernible] they get good governments or regional [indiscernible] as well and all that. And a commitment to cast 5 jobs for each job that we have on time, is about doing more in those communities. And [indiscernible] other recognizes the digital technologies are coming towards. So we're trying to get ahead of those curves, and trying to make sure we improve all operations [indiscernible] running 1 operation [indiscernible] I'm saying in across [indiscernible] in Australia, [indiscernible] whether in Mogalakwena, whether it's around Sishen or whether it's around in to see us to [indiscernible], but we [indiscernible] certainly is a unique package across our industry, but it needs more.
Unidentified Company Representative: Elsie, if [indiscernible] just next question very quickly. I've got another second question queued. I'm afraid we got time for [indiscernible] other also, but we will do your questions first in the roundtable that follow. Thanks [indiscernible] question.
Operator: Our next question comes from the line of [indiscernible]
Unidentified Analyst: Just going back to PGMs and rhodium and palladium. But what we're seeing, I guess, over the months is of acceleration in battery [indiscernible] sort of operation of the EVs, do you think becomes an issue for rhodium and palladium, where there is no alternative end use?
Mark Cutifani: Well, I'm going to say I think hydrogen will certainly be a beneficiary on the large-scale of the largest scale transportation industry. And I think that's good news from our point of view, particularly with platinum. But I think in terms of palladium, we see slightly [indiscernible] palladium which ones [indiscernible] till we bought, we think it starts out and platinum becomes the out. So our assets to be a 3-year [indiscernible] in as well. I've got other unit ratio and other physical characteristics that supports broad use. But certainly, we think in around a 2- to 3-year period, palladium starts to drop away in price compared to platinum. [indiscernible] but this quarter benefits particularly for the hydrogen industry. And then my view is that there will also be reconsideration of palladium in a whole range of other [indiscernible] battery technologies as well. So I don't think the games played out yet. I don't think people fully appreciate where the demand [indiscernible]
Operator: And your last question comes from the line of Dominic O’Kane from JPMorgan.
Dominic O’Kane: So my question relates specifically to South Africa. And I guess in the context of your slides with Slide 32 with the target for free cash flow and return on capital employees. How does yesterday's sort of relaxation of currency controls, which is clearly what you've been talking about for years, change your attitudes to investing in South Africa? Clearly, you have some of the some great expansion options, great deposits in South Africa, long term. How should we think about your appetite there for greater investment in South Africa in the long term? And equally, to your comment on the minorities, does the removal of those exchange controls make it more value-accretive to subset, maybe look at increasing the minority stakes there rather than upstreaming of dividends in South Africa?
Mark Cutifani: Look, I've worked in South Africa or with South Africa since 2007. And the single most important issue in terms of investment in the country has been exchange control. With that announcement and with what we've done in the last 12 months, I think that's the single most important strategic issue for us as a group. And it make South Africa one hell of an attractive investment, even with its challenges for the mining industry. You've got a maturing leadership, the financial team understands the importance of attracting foreign direct investment, and this is a critical step. For us, absolutely key. And for those that talk about 2 balance sheets, forget that conversation, there's only 1 balance sheet in Anglo American today. And I think the move is quite significant. . I think it's strategic. And whilst all countries have got their issue, South Africa has made another important step in making itself an attractive destination for FDI. And it's going to be important in terms of the growth in the future, and they know it. So I think it's a big step, really important to us and very pleased to see. Stephen, do you want to add anything to that?
Stephen Pearce: Hard to add too much, Mark, except that we've always had great working relationship, both with the reserve banking and with the national treasury. You've seen what we've done progressively over time in terms of additional flows and returns to shareholders out of South Africa. But as you say, I think, a great step for the economy going forward in their ability to attract capital in. And we're no different as we consider that decision, I should say, you want to have an even and consistent set of fiscal regimes as you can as you consider different projects. So I think it's a terrific step forward for the country, and we happen to benefit from that as well.
Mark Cutifani: Thanks, Steve. Guys, one thing I didn't answer the Cerrejón question earlier. I should just make the point that we'll wait for Gary [ Enable ] to get his feet under the table and work out where he wants it to go. But hopefully, we'll be able to resolve something in the next 12 months with the 2 partners on Cerrejón, but we have to wait and see.
Unidentified Company Representative: Mark and [indiscernible], thank you very much for that, Thank you very much for running the show. Audience, thank you very much, indeed, for your time and your patience this morning. It was a slightly longer presentation than previous. There were some key messages that we wanted to try and share with you. As ever, if there is anything that Investor Relations and my colleagues can do, then you know where we are. Please contact us, we'll be delighted to try and help. For the sell-side analysts that are joining us on the round table, that will start in about 5 minutes' time. So stay safe. Stay well. Thank you very much, indeed, all the very best.