Boliden AB (publ)

Thank you Olof, and welcome from me as well, to all of you in there and to everybody here in the room. Presenting these results is, of course, a little bit easier than other quarters sometimes are.

We've had a really good quarter especially in the mining division, and I think you've all seen that. On top of that, we have the price and terms which are all helping us, not unknown to anybody because you've all seen that before.

We have an inflation pressure on us, we'll talk a little bit more about that when we come into the numbers. And that is also, I think nothing new, I think that we're seeing that in a large part of society right now with that pressure going up.

We had announced before on that we've had issues [Indiscernible] with Tara and Harjavalta, I'll give a little bit flavor to that later down in the presentation to what really happened. So the financial performance was good.

We've had a profit of SEK2.8 million in the quarter, and a free cash flow of about SEK2 billion. The Capex also came down lower -- came out lower than where we had guided for and also lower than we expected.

We've had the COVID issues in our Capex side -- or COVID issues in our operations and thus we have focused on the operations and had to take some resources away from some of the maintenance Capex that normally goes on. The dividend proposal is also out, and you've all read that.

It's all in line with our dividend policy. Nothing has changed regarding the policy.

And when we applied the policy to the numbers, we get a cash dividend of SEK10.5 per share, the ordinary dividend. But we also have extra space in the balance sheet for an extra dividend that will come in the form of redemption shares of SEK15.50 per share as well.

So the total dividend or total payout to the shareholders will be SEK26 per share. Regarding the projects while we have commissioned the nickel capacity in Hiawatha, there's all sounds good but we've had challenges with Nickel line, I'll come back to that.

Regarding the expansion, we have signed along [Indiscernible] of key contracts during the fall, and we have. -- we're now saying this right now, as of early January, we're full speed, with all the ground works in Odda, and so far, everything is looking fine.

Tara Deep we will come back to that when we speak to Tara as well. But of course, the Tara Deep has been delayed by the water inflow in Tara.

And we've had on projects generally COVID-19 related delays. Both from suppliers not being able to supply in time; but also from ourselves, focusing the resources that we have on operations rather than on the project at this time.

Once again the Group, profit was at SEK2.8 billion, was interesting is of course, mines SEK3 billion, so we make more in mines than we make all together. The mines have had a very good quarter apart from Tara which was well known.

We have produced record levels. I'll come back to that.

The smelters have had a somewhat of a more challenging quarter. The zinc smelters have done recently well but the copper smelters have had challenges not just the nickel issue in Harjavalta.

And all in all when that happens and you have mines running very well and you have smelters not running quite as well, you build up inventory. And when you have a situation like right now when we're making lots of money in the mines, that inventory turns into a negative internal profit elimination both because of the high prices, but also because of the high inventory and we've had record negative internal profit elimination.

This of course over time it should -- it will eventually flow through to the P&L, but as of now that puts it all back. Regarding the ESG, you all know that we're very proud of our ESG profile.

The quarter was not the best from an ESG standpoint. We've had relatively high LTI frequency.

We end up the total year of 2021 on around the same level as 2020, which is a level that is too high, it's a level that we don't like and we want to go down. We can blame part on this on COVID and part of this is of course, always with injuries.

You can also blame the unluck factor and so on, but we are continually focusing very hard on it. I should have it also point out that we have with the end of 2021, we are now 14 years fatality-free streak in, in Boliden, which I think is totally unique to the industry.

The sick leave, as you can see, is high. It's higher than the 4% that we normally want to see, is also higher than what we had the year before.

The sick leave linked to COVID has of course gone a little bit up and down. It started in the quarter quite high, back in October, was getting better in November and mid - up until mid-December.

And of course, late December it all went the wrong way, and we've had actually some challenging times in January as well, with very high sick leaves regarding coming to COVID. The carbon intensity also went you can say the wrong way, with an increased carbon dioxide intensity in the quarter compared to last year.

This is partially due to the fact that we, last year had very good grades and with high grades you get a better profile automatically. But it's also due to the, we can say, unfortunate events that we've had and the not so perfect production in smelters and also in Tara that gives a higher footprint on CO2.

This is nothing that really changes anything regarding what targets we have, what we are doing we all feel very good about the targets that we do have. Price and terms.

I'm not going to go too much into detail. You all know this one before, base metal prices are increasing in a very good level.

Precious metals, although they are not increasing, they're stabilizing. There are on a high level and from my point of view we also had help with the relatively good dollar exchange rate.

When we multiplied this altogether, we've had probably one of the best [Indiscernible] in terms quarters in the history of the company. If you start looking a bit more into detail on the prices and terms, this slide to some way captures all: 1.

You can see that the prices both for copper, zinc, and nickel are way above the cost curves, i.e. there is already a very high price level priced in, because yes, it is a very high demand situation going forward and we see that and they are limited supply, but a lot of that is already priced into the price.

But you can also see about the cost, I think is interesting, you can see on the copper side that all the different percentiles on the cost curve goes up. This is inflation that has started hitting the copper industry.

You can also see that it's relatively worse if you look at the 90th percentile. We also see some new marginal capacity coming into the industry, which also drives up the cost especially at the 90th percentile, this is of course also one thing that it's long term helping the kind of Balsam levels slows down turns in terms of where the coupled price will be.

You can see that even more nickel, where you can see that there's coming in quite a lot of marginal capacity in the nickel industry with very high marginal cost. And you can see the 90th percentile really kicking in the nickel side.

On the zinc side, you might be a little bit fooled and think that all those zinc miners in the world are the best ones at managing costs, despite the general inflation in the world, these guys seem to all to be able to reduce the costs. Well, that has basically one big explanation and that's the lower zinc TCs which benefits the miners in these calculations but they can't really do much about.

So the actual cost of inflation apart from TC is probably prevalent also pretty much in zinc mines. Also, the relatively strong silver price during the year of '21 compared to '20 is also helping the cost as that is counted as a credit in the calculations.

If we then start talking about our mines, we've had record production for the quarter in Aitik. We have reached the 45 million tones, which we are very pleased that we have been able to prove that we can do.

We also had better grades than anticipated, which is of course we're also very happy. You know that we have a plus minus 10% situation and this is right on that margin plus 10% and that happens sometimes.

It's good when it happens on the positive side. Garpenberg also very strong general production profile right in line with where we were guiding and where we thought we were going to end up.

Kevitsa has now finished the year $9.5 million. They were all over that speed for the fourth quarter, but for the full year we have SEK9.5 million.

We have not really been able to achieve what we have promised to do on the Kevitsa side. Boliden Area, very stable in terms of mill production, very good quarter.

Now, Tara I will come back to that later has had a challenging due to the water inflow. If you go look at the Smelters, well, in Harjavalta, there's been quite a lot of things.

We've had a planned maintenance stop, which was in there, but there was also a delay and increase of that in terms of days and also delayed ramp up in the Nickel line. After that, this was installing the new capacity in nickel line and we have that.

We've also for Harjavalta had a negative raw material mix that is especially clear compared to last year where we had a very strong raw material mix into Q4 of 2020. We had the explosion, I'll come back to that in the nickel line.

On top of that and if you clear out all these other things, actual throughput on the copper line has been pretty strong. Also interests have been effected by the negative raw material mix that's both a question about exactly which concentrates we had available during the quarter and also the amount of E-scrap that we've been able to source at that.

And we also had a delayed ramp up of the expansions in Ronsskar. We are not quite there where we want to be in terms of throughput's in the copper line with the double converter operations that we have installed.

We don't have that fully up to speed in this quarter yet. The zinc smelters basically stable production, nothing much to talk about.

[Indiscernible], our smallest units, we are hampered by the environmental permit on sulfur emissions, that means that we have to curtail production there as we go forward. You can also see here I think graphically just looking at the nickel and not so much on corporate you can see graphically on the nickel, how relatively to production we've had, and of course where you have a Kevitsa mine producing fuel, you get inventories and that's part of the internal profit eliminations situation that we do have.

Looking at the full year as we presented here, once per year, we do have a record profit for the full year. And if you compare the full-year to the full-year of '20 where we had very strong prices and terms, we've had decreasing volumes because of lower grades and which has been well communicated.

But we've also had disturbances in Aitik. And the early part of the year in Tara, both in the early part of the year, in the later part of the year, and Harjavalta in later part of year.

It was a big maintenance year in smelters and of course, we also closed Kylylahti in the end of 2020, that is also affecting the numbers. The inflation is coming to kick in here.

We've had roughly a 4% inflation full-year 2021 over 2020, slightly stronger towards the later end than the earlier end, and the power prices as part of that. But we -- that's the number that we have been able to calculate to figure out what our own inflation rate has been.

If you look at the different units, we are of course, very happy generally on the mining side that we are producing good profits in all of our units apart from Kylylahti that was closed down. And on the smelter side, the Zinc smelters have had a tough financial year with the very low Zinc TC's that we've had for the year, that is hit them relatively hard.

Whereas the copper smelters are producing profits on a relatively high level throughout the year, and that's all despite the fact that we've had pretty strong price increases here as well, and more linked to chemicals and the power situation. Exploration.

We're also today releasing our R&R statement. And I think just to get a highlight; 1.

We are increasing exploration costs it's nothing new. I think we had an ambition to go even higher than this number in the early part of year, but we're hoping slightly hampered by COVID, also in the exploration area.

Garpenberg is of course, a really positive news. We've had a strong uptick in mineral resources and we're very happy about that.

Kevitsa, though, we have a decline in mineral resources as we've been doing some infill drilling in some of the areas in which is outside the existing final pits closure. We've not gotten quite as good results as we had anticipated, and we have a negative number there.

The Boliden Area well [Indiscernible] well announced beforehand that's now in -- the new discovery is now in as a mineral resource and Rävliden that we've been able to convert now from resource to reserve, at least part of that mineralization with the investment that we're doing there. On the Tara and Tara Deep side we have had a delay in several stages that's partially due to what happened really towards the end of the year with the flooding.

But also before that, we've had challenges with water and other things in our exploration drilling in Tara Deep. If you look at the numbers, you see that graph to the right is not everything so much above the sector this year as we are comparing the reserve life of 10 years back where there's throughout or so left now but it's important to point out as you can see that our short-lived mines in and Tara are still keeping up.

After 10 years of our production there roughly at the same levels they were before, and Aitik and Garpenberg, have increased. If you looked at this particular year on the research side, it's not so much new to say on the Aitik side.

There's not so much new to say on the Boliden Area, even though we've extended it for a year. [Indiscernible] not so much to say.

It looks like a reduction here, but that has to do with the increased production compared to what we said last year. Now with the 3.3 million tones put into place, and Tara have not really much change there either in terms of reserves.

It's more on the resources side but we see things happening. We've seen that in The Boliden Area.

And we see the major increase that we have in the Garpenberg sites. And we've also had positive news on Tara Deep.

We've been able to continue and explore and we've finding the similar grades. The uptick in tonnage has not been as big as we would've liked in the beginning of the year.

It's not really because of the fact that we haven't been able to find it, it's more than we haven't been able to drill as much as we would like to. And once again, all this drilling is done from surface, we have not been able to drill anything from underground yet.

And the Kevitsa is a disappointment in this one with the reduced resources that we do have. Is -- having to point out that this is outside the final pits, so there's nothing of this that was ever in any production plant.

So with that, I'll leave it over to you Hakan, to take us through the financial summary.

So thank you Mikael, and good morning. Well, as Mikael talked about, we have reported an EBIT excluding process inventories of SEK2.8 billion.

That is roughly SEK200 million lower than Q4 of last year and SEK400 million better than Q3. I will come back to that as usual.

Investments are close to SEK2 billion in the quarter. That's higher year-on-year, and higher sequentially, but it's a good bit lower than the number we were aiming for.

Free cash flow, SEK2 billion, also lower than last year, but above Q3. And then finally on earnings per share of SEK9.27, which is an historically strong number.

Looking at the profit, to business area by business area, I think it's obvious that mines have had a good quarter. A profit of 3 billion, which is a good step-up to both comparison periods.

Prices were high. Prices were also helped by the definitive the pricing that what we sometimes refer to as MAMA, month-after-month of arrival, which contributed by about 240 million in the quarter.

On the negative side in mines, we've had the water inflow in Tara on and we closed Kylylahti compared to last year. But we have had strong production in our key mines, Aitik, Kevitsa, and [Indiscernible].

Smelters 553 million, so then other elimination a large negative numbers of $7 million to $1721 million. Out of that, the internal profit elimination, which Mikael referred to is SEK660 million.

And just to give some order of magnitude, about 2/3 of that number is connected to higher prices. The sensitivity that we have at unchanged inventory levels and so on, is that 10% increase in metal prices will lead to roughly SEK300 million effect on EBIT, and during this quarter we have seen prices on average come up with about 15%.

So 2/3 is related to prices, but 1/3 is an inventory buildup primarily in nickel concentrates. The inventory buildup will of course release during the first half of the year, and the price will continue to move with market prices.

Comparing Q4 of this year to Q4 of '21 to Q4 of '20 we're SEK200 million down. Starting with prices and terms, we were helped by about SEK1.7 billion.

Both metal prices and currencies have moved in the same direction. We have a stronger U.S.

dollar, the main impact though is higher base metal prices, primarily copper and zinc. Volumes are down SEK1.5 billion, and here it's about SEK500 million for each one of the three segments that we're reporting.

Starting with mines, most of the SEK500 million, it's 460 to be exact, most of that number is lower grades and I think that is well known to the markets. And Aitik is of course a big component in there.

In addition, we've had the water inflow in Tara and Kylylahti closure compensated by strong production in all other mines. On the smelting side, the SEK500 million is largely connected to a lower performance in the nickel line in Harjavalta.

As you heard earlier in this presentation, we had a slower ramp up after maintenance and we had an explosion in the nickel line around Christmas. In addition, we've had higher maintenance than last year, both planned and unplanned, and unfavorable raw material mix.

For those of you that recall the Q4 presentation of last year, we made something of a point that we had an unusually strong material mix, especially a lot of gold containing material in Harjavalta. And then finally the internal profits.

Also about 500 negative. This was a was a quarter were we built stock, same quarter last year we released a lot of stock.

The costs are up SEK366 million, inflation is the main component here. To give one example, we're up SEK210 million in energy, energy here includes electricity and diesel.

In additional, we've got higher maintenance costs and about 60 million one-offs related to reclamation. That's on accounting change, I'll come back to that briefly in a while.

Q4 to Q3, again on the pricing side, we've been helped by stronger metal prices and a stronger dollar. Volumes compared to last quarter, we had a very good production in mines, higher mill volume and higher grades.

And then on the negative side, lower performance in smelters at higher internal profit eliminations. On the cost side roughly the same factors, the higher production costs connected to production disturbances, intolerant Harjavalta.

But there is also a fairly big seasonal component here of about SEK150 million cash flow. Cash flow is SEK2 billion, that's 750 million lower than last year and I think the main components here or slightly lower EBTA.

The higher investments. Even with higher investments, as Mikael talked about, the full-year Capex is lower than we expected.

We have not reached the tonnage of stripping in our open pit mines, we've prioritized all production and we also have some delays, partly COVID-related in other projects. Working capital is in line with last quarter.

This is in a context of increasing prices so we've released the tonnage in the working capital a bit. Capital structure, strong balance sheets, which is then one of the reasons to the dividend payouts, and that payment capacity of SEK16 billion, net cash position at year-end of about SEK900 million, and all-in-all a robust financing in place.

Then there is also a comment in the report that we've updated, discount rates for [Indiscernible] reserves. This is a pure accounting change.

There's no change in our reclamation plans and the actual cash flow that we plan to incur. One point to take away from this is that going forward '22 and onward, we will have slightly higher depreciation, about 60 million and the corresponding improvement in the financial net, so hence, no change in net profit.

With that Mikael, something about our low-carbon offering?

[Indiscernible]. Earlier in the week we announced what I think that you all anticipated for quite some time, we also announced our new no carbon-zinc product.

To the right of the slide, you see curves that you will recognize from our Capital Markets Day, although they are slightly updated. Their basis says that when you're looking at Scope 1 and 2 of zinc production, even if you look on mines on top, or you look at smelters on the bottom, we are very well positioned.

And we've known that there's nothing new, and we also know that with the Odd investment, we will number one, get better in Odda they've been they were really good to start with and we'll have more production in that low-end.

We should by the way say we've also introduced another product at the same time and that one is called recycle zinc because we do recycle zinc. That one has a very high, compared to us, CO2 footprint of about 3.8, also externally verified.

And what's interesting with zinc is, as you can find out, that actually recycled zinc does not have a better CO2 position, rather rewards CO2 position. Now as there are certain customers who want recycled Zinc anyway, because it fits with their profile to make sure they have recycled material, and of course, we've committed to try to get that 3.8 down over time.

And then we have the rest, which will vary over time. But we'll push that down as well, but that's around two to 2.5 kilos.

All these numbers are extremely good. We think that the general part of the industry is somewhere between 3 and 4, but we don't really know because nobody else publishes their scope three emissions the way that we do.

at least as far as we are now. We have contracted the first volumes already, for this new product.

It is similar to what it was on the copper side. We do get a premium for it already.

The premium is small and we clearly hope that the premium will get bigger over time. That is not going to happen in a linear fashion.

It's going to happen one day when there will be certainly a rush to get to the low carbon material, maybe around the time we talk about Zinc, maybe around the time that we will have low carbon steel because how can you produce low carbon steel and then dip it into high CO2 zinc? But we'll see when that will happen exactly.

But as we say, we already have sold the product and we've done that with a premium even though the premium is not that big. Tara.

Tara had a water inflow and we'd -- you've seen that in separate announcements. We were working to get a ventilation shaft into the Tara Deep area of the mine.

We had the pilot hole coming through -- 15-inch pilot hole coming through and we had massive inflow of water with that. That you get some inflow is not unusual, I mean, this is Tara, it's a wet mine.

But this was massive it was -- if we normally have in all of Tara just to get a sense, maybe about 400 cubic meters per hour inflow from all sources that we have, we suddenly got this one source with over 2,000 extra cubic meters on top of the 400 we get an otherwise, and we have a pumped capacity around 750, you all understand that that pumped capacity is not tell for anything. Also on top of that, we have in environmental permit that we're not allowed to release more than about 750 to the river either.

So the pump capacity is linked to the environmental permit. With that total situation, the mining got flooded.

The whole Tara Deep drift, got flooded and started pouring into the rest of the mine. We've used service providers from the oil industry to be able to use similar technology as the oil industry has done historically when it comes to getting oil leaks from oil wells under control environmentally.

This time there was no environmental risk, as this was water, by the way very pure water. But we've managed to use the same technique, and after about 12 days we managed to plug the hole.

Twelve, I would say, very intense days for everybody who were involved with it. Once it was plugged and we've been able to do security [Indiscernible] up, we've been able to start pumping.

And also as we got under control, we could also start producing from certain parts of the Tara mine that was not the deeper parts, and we could increase some more way the positions that we had in the shallower part. But we will not be able to have full production until we get the bottom of the mine pumped out and reinstalled.

And that is slightly to happen around March time this year. So we still haven't pumped it out and once we pump it out, we have to see how the infrastructure that became under water has survived.

Also, we do have the higher grade ore in the bottom part. So the ones that we are replacing with on the side is a lower grade ore.

On top of this, just to make everything worse because one accident doesn't really come alone, we actually did pretty big fire in Tara in December 27th. This fire started in one of the underground conveyor belts and nobody got hurt.

We got everybody out, nobody was affected, but it was a big fire that was taken under in about -- took about six hours to get it under control by our local internal fire brigade. Now you can say that it was bad that two things happened at the same time and in another way, it was also [Indiscernible] to be good because this is the conveyor belt that's usually used to convey or take out the material from the bottom of the mine, while the bottom of the mine was already flooded, so there was not so much use for it right now.

So if this was ever gone to burn at some time this was not such a bad timing, so we hope to have the whole conveyor restored in about a week from now, so mid-February. And this should be ready also to be in place when the ore starts coming from the bottom part of the mine.

The Tara Deep drift, we have down prioritizing this thing. We have focus on production, so once we have everything done in all the production areas, [Indiscernible] water, we will start focusing on the Tara Deep drift and get the water out of the Tara Deep drift.

That is going to take an additional couple of months and maybe somewhere towards June, we will be able to have the water out and then we have to start assessing what's happened to infrastructure in the Tara Deep drift. And when we can get back sometime in the second part of the year to start the exploration from underground which is the next activity.

And then of course, we're looking very much into what to do with this ventilation shaft that's caused all the problems to start with. We do need to have a ventilation shaft.

Not urgently as kind of right away, but we will need it relatively soon in order to be able to do all the things that we want to do down in the Tara Deep drift. And we will look into the situation.

Our ambition is still to be able to rescue the existing hole. But they're clearly engineering challenges in doing that, but we're probably lost in terms of getting ventilation into Tara Deep, we've lost a year.

Harjavalta, as I said, if we had two accidents happening at Tara [Indiscernible], we also had a series of mishaps. If you want to call that on the nickel line in Harjavalta which is unfortunate because this is right now a very high earner if it were to work perfectly, you all know that we're expanding the capacity of the line.

We had a maintenance stop in October when this was supposed to be put in and it was put in that thanks for extra, but it took quite a lot of extra time, so we were late already starting. The ramp up of the production was also not going quite to schedule.

We'd had issues with some of the new technologies, as you know, this is a line that uses a totally new technology for the concentrate dryer. And going away from fossil fuels, burning in the drier to using heat exchangers we had some 2U thing for all them with that and it was not really working for full.

And then on top of that, we had this steam explosion on Christmas eve. What happened was that we got -- due to the, I'd say human factor, but also may be due to organizational factors, we should not blame anybody but we had a situation where slag from the electric furnace in the nickel line was mixed with water in a way that should not happen and we got a big steam shock out of that.

Once again, nobody got hurt, which is the important part, but we were down for almost a month until we could resume production again. As I'm standing right now, the line is there, the line is running.

We're back to what I would say the original ramp up curve. We're not running at exactly 100% of the production right now but maybe more like 90% production which is part of the normal ramp up curve as we had envisioned when we were supposed to start up the project.

With that, Olof has told me I need to make a big pitch that we have a Capital Market Day scheduled for November. It will be here in Stockholm and it will be followed by a site visit the day after.

So it's November 15, for the presentation at Stockholm and November 16, with the site visit. Going forward, I think we have not really anything new to say.

Regarding Aitik, we have the same guidance regarding the 0.20 grade and the 0.1 gold grade, and Garpenberg no change in guidance. also not for Kevitsa.

Now in Tara, we will have an effect of water in Q1 both effecting throughput and effecting the grade. This will be in the order of magnitude, or maybe 20% less metal production than would have been a normal one.

Now you know that Tara also normal terms goes up and down quite a lot, so not how much you're helped by that, but just to get an order of magnitude, it's not half, it's around 20%. In Harjavalta, we still have an effect in one Q1, due to the nickel explosion.

As I said, we didn't start anything up until late January. Maintenance shutdowns for '22, slower maintenance year, but this was also known before COVID.

I just want to reiterate that even though we are, as I speak today, maybe heading down the COVID infection in our part of the world. It's gone much better just in the last week.

We've had a pretty challenging January, to say the least, in terms of making sure that we can get all the production running. Inflation pressure, we talked about that.

I talked about the 4% roughly inflation that we saw year-on-year '21/20 as we look to 22/21, it's difficult to say because lots of this is dependent on raw materials, metals but also we're still using quite a lot of power, and quite a lot of diesel. But it's pretty obvious that there's still a high inflation pressure in the economy in general.

The Capex guidance has not changed. It's still at a little bit more than SEK10 billion for the full year of 2022.

Thank you all.

Thanks. Thanks Olof.

Thanks for the presentation. I have a few question from my side.

First, on the electrification which you are working with. Pretty high speed steel, I would guess, and you typically say that the electrification strategy should stand on its own merits with regards to economics, right.

So my question is, how does it stand on own merit, with regards to the electricity prices have more or less flied away -- up. Even though with diesel prices are much higher as well.

But if you take everything into consideration, how does it look right now?

Everything into consideration is diesel prices are high, but also the, whatever you call it in English, the fact that we have to mix a certain amount of renewables into the diesel that we're using, so this mixing factor is making diesel much more expensive and also given the power prices that we can get, the economics looks better now than they used to.

Okay. Good.

So how is the trend going with regards to the electrification? Are you still increasing it going into 2022?

We're not announcing any new plans. We're still delivering on the plans that we have announced before.

I think the other day I heard was the Aitik is now up to ten or 11 trucks. They are electrified and then they're starting to run around and Kevitsa have the 2 first trucks in the first line up and running.

So we are delivering on the ones. But we don't have any additional projects as of right now to announce.

Okay. On the grades, you expect rates to come down in Kevitsa, obviously because it was quite high in Q4 on corporate side, but you know you're not talking about nickel.

We should expect nickel in cable to be pretty much in line with, the reserve?

With the reserve, yes.

Okay. And how certain are you that you will come down on the grades in Aitik already in Q1.

Because when we go back to one quarter, you didn't guide for 0.23, definitely not in Q4. So what is the uncertainty on Q1?

And you should be pretty certain because we are now in February.

Well, there's always a plus minus factor, but I'm pretty certain we'll come down.

Okay. Great.

And then on investments, you said you were running pretty much behind your schedule for 2021, right? SEK1 billion or so?

or SEK2 billion? I don't remember, but it was quite a big figure.

We are we are below our schedule. One important component is waste rock.

For various reasons, COVID being one of them, we have not reached the levels of waste rock production that we aim for. In this situation, we also prioritize our resources into ore production.

So that is one important thing. And next year's plan includes an increase and we are working to reach that.

But there is no change in '22 guidance in that respect.

But how can it not change if you're picking up speed in 2022?

The plant already had an increase in wastewater production. The number 10 that we guided for already included an increased waste.

As you may recall, we lifted the maintenance Capex to SEK5 billion compared to SEK4.5 billion, which we used to have. And that is an increased ambition in stripping.

And we're sticking to that, but we don't feel that we can increase it further already in 2022.

I don't get it fully because previously you were also guiding that it should increase, and you are running behind your schedule. So does that mean that 2023 will be upgraded?

Over time, of course, you cannot change the fact given time we will have to do the stripping. Now, the mine plan also changes for maybe a little bit up and down.

But we are a little bit behind on way struck, which we don't like. It doesn't affect production in the normal situation but it does give us fewer degrees of freedom if something were to happen because we will have fewer positions open as the way struck removal.

It's not quite as advanced as it would've ideally bid.

Finally, then for me on the OpEx, you should have pretty good knowledge where OpEx's in Q1 I guess, even though you're seeing uncertainties for the full year as we said on the inflation. So Q1 2021 was you had some disturbances [Indiscernible] if I remember correctly.

Q1 2021? Yes, we had we disturbances in Tara and in Aitik.

Do you still expect OpEx's call it unit OpEx or whatever to be up year-over-year in Q1?

Well there is an inflation component coming in there. And that is difficult to avoid.

I mean, energy, for instance.

So the answer is yes.

Yes.

Okay. Thank you very much.

Thank you. A few questions for my slide at more on the smelters.

I was wondering if you could help us to understand how you look at premiums, both for copper and zinc. I've noticed that your German smelting friend talked about all-time highs, copper premiums.

So if you could talk a bit about those and maybe add nickel as well.

If you start with copper, which I think is the one that is more obvious, you know that our customers don't pay premiums just to be nice. They pay premium has a compensation for service that we're giving them and that's the leverage that they get.

And as all kind of logistic costs have increased, there will be an increase of premiums. It doesn't necessarily mean that the net premiums are that much higher because there is a pretty strong cost component in serving those tones all the last mile to the customer.

And I think that's what you're seeing coming through in these numbers that premiums are coming up to reflect the increased logistic cost. And on nickel, there the market is not so clear because we have other types of contracts.

It's not for -- our nickel is a mat not a finished metal. So there the premiums are totally different.

Basically nothing that will drive profits for you in 2022, that's the thing?

I mean, in copper for example, the premiums you been talking about 1% of the price, of course is much more important what happens to the price, it's not the premiums themselves that's not going to drive the price -- the profit level.

But you're going to get a bit curious when I read that nickel premiums are up to $600 per ton or something like that.

Yeah, unfortunately that's not for us, because we don't have a finished product to deliver.

And could you also talk about the compensation to the smelter from the mines, and the TCR Cs, how do you look on them, they are pretty substantial for U.S. group, I mean in terms of earnings delta?

Well, the copper ones are already being announced and they're going up slightly, on the Zinc side, there is no announcement it's not expected, maybe for another few weeks, what -- where there will be. We are of course, less affected than many others because we have a relatively balanced situation on Zinc.

But net on that, it's of course, higher TCS are better for us. I don't really have a point of view.

I think that the Zinc [Indiscernible] will come up. But by how much, I don't know.

And then a final question from me here. The sulphuric acid markets also seems very tight, and you're doing loads of those volumes.

I think it's the biggest product of yours in tonnage. How does this affect you for 2022?

Well, it's of course a positive, and now due to many different reasons, many of the sulfuric acid contracts are relatively fixed in pricing, or have very slow moving pricing formulas in them as we having these very long relationships. But net-net, it's of course a positive with high citric acid prices, and over time, it will be even more positive.

Thank you very much for that. Just firstly on your increased planning prices, copper up a bit.

Just curious to know, obviously, maybe marginal up taking in those, but on the exploration results, how much was, a result from higher planning prices and how much was organic exploration results?

I will say that; this is basically all due to either engineering results or other exploration results. The planning price has not played a very big deal as of right now.

Okay. And also just in terms of your mining plans for let say I can your [Indiscernible] mines, is this something that can affect how you choose to distribute grids in the coming years or is it a marginal impact?

If you were to make a marginal change upwards it wasn't going to change as much, if you were to make a very big uptake, it will change because there are marginal force, things that we call [Indiscernible]. But of course, waste struck is not totally demineralized, it has some mineralization and with very higher -- over the higher planning prices, we would rather take those into the mill and it would reduce our grades.

And also on the planning prices, do you feel that you have any projects that was previously not economically viable, that is now or?

Now, I think that this update that you see now in the published prices, it's not as big as it will make things turn profitable or not as I've said many times, I think for us, we have a pretty big pipeline of products that we would like to do if you want got permits. That's just more of our limiting factor.

And then also on unit costs in Aitik in 2021, just thinking about 2022, if you're able to ramp up to four to five million tones, should we think about those unit costs come down, or is the inflationary pressure that high so to speak?

Those are the inflationary pressure but also lower grades, of course, will push the unit costs up. Better production will help it to come down but then I always have to remind everybody that every open pit becomes deeper every year.

Every ton that is produced next year is going to travel slightly longer than [Indiscernible] last year.

I see. Yes.

Thank you very much. Thank you.

Okay, Operator. That opens up for the International analysts, please?

Yes. Good morning and thanks for the presentation and for taking my questions.

The first question is on throughput rates across Kevitsa which came in at or above nameplate capacity. I guess this is a sign they you can meet your targeted production levels once COVID challenges subside fully.

But what should we expect for Q1 given the resurgence of COVID that you highlighted starting in late December?

Expecting in Q1, that will vary up and down partially due to the end-year COVID situation and also due to other things that can happen. So no more detailed guidance than the one that you got.

Maybe one reminder that we usually talk about is that Q1 being a winter quarter is often a bit challenging for, open pit mines.

Okay, thank you. And the second question given, if I can push you a bit on cost inflation.

So last quarter, you've been talking about the 5% cost inflation on a year-over-year basis. How should we think about ignoring the one-off effects and just looking at underlying levels.

Are you still at single-digit inflation growth?

Unless something extremely strange happens from now going forward yes a single-digit for sure.

Okay, great. Thank you very much.

Good morning, everyone. Two questions from me.

The first one on power costs. So you told us with the Q3 results, that around 80% of your power costs are hedged for the next 12 months.

What does that mean if we're looking out through this year, is it the second half when, higher power costs will start to feed through into the business, particularly the smelters. And can you remind us of the percentage of costs for the smelters that are power-related.

That's the first question. Secondly, just on M&A.

You've got a very strong balance sheet. There's delays to Tara.

You also got relatively short life at two of your mines. Are you looking at potential opportunities out there?

Or is it very much an internal focus?

I can start with the second one right away that you can say is very much an internal focus because there's always the focus of Boliden to make sure that we take care of what we have, and develop what we can do internally. There is always a focus on the outside, and we are not ruling out doing something, but we will not do it because we have to feed the smelters.

We will do something because it's a good project in of its own. On power cost, Paul, can you -- probably can update exactly what's the share of the power cost for smelters, it's more for Zinc than it is for copper.

Yes.

I can say on the power structure we -- you know that we have a situation we're basically at 80% hedged. And if you're far away out, that's work out pretty well and we're pretty fixed hedged for the full year of '22 at 80%.

So it looks relatively good.

Regarding the energy and electricity costs I will give you absolute numbers rather than percentages here. I hope that's fine.

Energy, which includes an electricity on the, all kinds of energy in Q4 was 490 million in mines and 417 in Smelters. So just shy of half a billion in each of the business areas.

Out of that electricity was SEK285 million in mines and SEK340 million in smelters.

Okay. Thank you.

That's helpful.

Hi. Thanks for taking my questions.

Maybe just a follow-up to the cost question again and attacking at it a different way. In terms of the quarter-on-quarter waterfall, there was a half billion negative effect Q4 versus Q3.

Backing out maintenance from the very one-off with Harjavalta and Tara it's still implying something like an incremental SEK1.5 billion per annum annualized EBIT impact from costs. I'm just trying to square that relative to your guidance of around 5% inflation rate pressure.

And I suppose whether -- what I'm trying to get at is, to what extent now into Q1 is there going to be any incremental cost coming from power and energy costs? That's my first question.

Okay. So looking at -- just going back to the numbers in the quarters, if we start there, it's an increase of about SEK0.5 billion as you say.

There is a big element of seasonality. We typically spend about SEK150 million more each Q4 compared to each Q3 due to vacation periods and so on.

We also charged about SEK60 million one-off costs related to reclamation in Q4 in this quarter. So those two together, is a bit more than SEK200 million out of that.

Then we have an increased production between the two quarters and some costs for disturbances. So electricity, for example, between the two quarters are up about 100 million that is, of course, both production and price.

I don't see any major shock coming into Q1 due to electricity and so on, I think we build most of it already into Q4, but then we don't know how the prices will move from here and towards the end of the quarter. But again we're 80% hedged so the impact is limited anyway.

Okay. That's very clear.

Thank you for that. That's much more of a broader question around to the operation and reliability in general.

We had obviously two to three issues at Tara the last couple of years. It's been a crasher issue in Aitik the last couple of years as well.

And then obviously five at Garpenberg. And the problems more recently at Harjavalta.

My question is, is this sort of more of a fundamental issue around operational risks in the business? Do you think it's their understanding on maintenance?

And is that something that will have to increase on a normalized basis going forward? Obviously, you talked about waste stripping on the spending of 2021, but more broadly is there a risk around the reliability of the business?

Well I can answer generally that of course we are unhappy with what has happened, and we are operating in a business that has, have volatility. There is always a risk with things breaking down, and things do break down, all the time.

Have we had more than our fair share in 2021? I think so.

I think that we've had more on luck than our fair share, and we should be able to get that back. I cannot say that there we're exactly something that happened that shouldn't happen and so on.

We know that especially the Tara mine is an old mine that has very old infrastructure and that is more susceptible to getting these kind of problems than others. But would I say that we generally have a maintenance debt?

Not really. We have maybe somewhat of a maintenance debt which is due to COVID, even though we had a record maintenance here in 2021.

It was not quite as big as it was originally planned to be because we postponed some maintenance due to COVID. It still looks like a big number, but the maintenance number that we give is -- basically, the biggest part of it is [Indiscernible] production lost during maintenance stops.

So it's very expensive with maintenance stops when you're ma -- earning lots of money, where as you don't make so much money is -- that's not so expensive to stop for maintenance stops. So do we have a major maintenance debt?

No. Do we have some minor maintenance debt?

Yes. Are we working on?

Yes, we're very happy to get back to normal procedures going forward.

Okay. Great.

So just maybe one final question if I may. Permitting.

Apologies if I missed this in the presentation, but there's two or three permits outstanding, can you maybe just remind us where they currently fit and the timing of them please.

As they are important right now, is the Liikavaara permit in Aitik. We have gotten the permit from both the lower court and the appeal court in Sweden.

It has been taken up to the Supreme Court. Supreme Court is not yet given the timing on if they will at all take it up, or whether it will be dismissed even before listening to it and we don't know what timing.

The Supreme Court in Sweden does have the luxury of setting its own time and doesn't have any time linked to it. That's one important one.

We have the environment permit linked to the Rävliden expansion [Indiscernible] That one I think we've said to you guys that we expect to engage you in Q1 this year. I think that now more better assessment is Q2.

It's taken a bit more to work through. We're still not really worried about that permit because it is an extension of the existing [Indiscernible] permit, but also minor extensions take time.

And I would say those are the two big -- what are important for what we're doing. We got the Garpenberg Permits.

That one is over and done with. We have the expansion at 3.3 And regarding Lager, which is the other one outstanding, that one is in the Supreme Administrative Court of Sweden.

And there we have appealed and the declining of permit for it, also the Supreme administrative courts in Sweden sets it on time limits and you cannot get out of them when they're going to rule on the issue.

Yeah, morning, guys. Thanks for taking the question.

I guess I just wanted to zoom in a little bit on the effects of the underspent in capital last year [Indiscernible] billion. Is this going to have any impact on production over the medium-term, particularly from the open pit mines?

And can we potentially see Capex are drifting upwards in 2023 as a result of that?

I think I've said that before, just to be very clear, we are -- we always have prided ourselves on having somewhat of a leeway in terms of our stripping so that we have flexibility in the mine. The fact that we have under stripped in Aitik and to some extent in Kevitsa gives us not a problem to plan to produce according to the plan that's in there, but it gives us less flexibility if something were to happen.

So maybe this is in an increased risk situation if we were to in some way have something happening. But we would lose a phase or something like that, we have less flexibility to move around production.

Over time, while yes, something that was not stripped today, will have to be stripped tomorrow. So we are in some way rolling a little bit of a Capex ahead of us.

We can't say exactly when and where it's going to happen because as you will know, we will change our mining plans or update on mining plans every year anyway. And that this might come into a such a rescheduling, exactly when it's going to happen.

But we are not as well stripped as we have -- would've like to be and as we have typically been.

Okay. And [Indiscernible] is there any impact on your projects as a result of this under spend?

Now, there is -- the under spend is stripping and the other part of the under spend is, you can say lots of small projects which are linked to little bit of debottlenecking, to replacements and all these things that have been pushed forward. And we will need to do those, we can't push them forever forward.

The main reason -- there are several reasons but COVID is a large part of these things, projects have been canceled or postponed. Those will also have to catch up, but we're not changing the guidance for '22 because we are basically at '22 flat out of what we can do, we will have to do with those things.

And it's an engineering -- also an engineering bottleneck on our own side.

Okay. And then final question was just around can you update us on your electricity hedge position for 2023?

It's a -- we're not going into too many details. We can say that we are somewhere -- I hadn't known [Indiscernible] somewhere between 60 and 80.

We are pretty well for '23 hedged with the base of 60%. And we -- I think that we've already filled some positions out there already.

The ambition is to be close to 80% for [Indiscernible] two years but we might not be exact at 80% as of yet.

Okay. That's great.

Thank you.

Hi. Thanks so much.

Nice questions have been asked, but first one, is on the Capex budget for the Odda smelter expansion, you possess it mid-year when there was already quite a lot of cost pressure in the market. But can you give us just an update on how you're feeling about the moving parts there and what's the level of contingency you have in the budget for either the capital pressure or overruns?

It's difficult to give an exact number on the contingency because we have, of course, done certain things around the budget estimates that we had in the summer where we knew that there was a different metal price and that we had done certain things that were linked to have this price effect taking into place. And I know you have normal contingency as you would do in every project, because something goes wrong anyway.

We do not see any reason at this stage that we have to in any way revise those numbers.

Okay. Great, I see you're comfortable on the budget.

The second question, just to be clear on the timeline for Tara, I think maybe when we discussed -- before you said you'd lost six months, but then you said the ventilation will be out for a year. What's the -- could you just clarify the -- how much time you would expect to have lost in the development timeline of Tara Deep and then what you'll, estimated potential timeline for an investment decision on the project is now?

The timeline for investment decision, we've said 2024 for a long time. That is still the ambition, even that you can see the things that happened now may made them lead that there's a risk study we’ll have to push out until 25.

That is, as of right now, not a major issue because we have -- for two reasons, both because we're producing less. That is, to some extent giving some more flex in the existing [Indiscernible] facility, but also the fact that refining more ore is helping us.

So it's not critical for the actual survival of Tara, we can promote move that to 25 rather than to 24. And the exact loss of timeline is a little bit difficult to say because yes, we can say clearly that there's been several months where we cannot do drilling the way we thought but of course we're not doing nothing just because of that.

We're still continuing surface drilling to save some time in the situation. We are working with the ventilation shaft that we -- it was originally planned so that we would have a little bit of leeway.

The fact that that might be one year late might not delay the whole project for a year. I would say if I were to be skeptical, I think you could ask the question, okay, so you had one big water inflow, how do you know that's not going to happen again?

How do you know that maybe there is something in Tara Deep that has lots of water all over it? And the answer that is that, yes, there's such a risk and of course we're also in [Indiscernible] everything else right now doing a very close geophysical surveys and hydro geological survey of the area to try to figure out if there is something fundamentally that we have missed out on in terms of the water situation or was it just a one-off bad strike that made us have this inflow situation.

Great, thanks very much.

Hi, thanks. Thanks very much for the call.

My question actually is just going to be on Tara and the water, and the risks around that project. So I will leave it there and return to the queue.

Thank you.

Thank you, Operator. Good morning.

Just to follow-up on Tara, when do you think this hydro-logical survey will be completed? And in case Tara Deep is a no-go, do you plan to remain at your existing mines or would you then consider going into some of the newer Zinc mines?

There is nothing in portfolio because you said you won't pursue any [Indiscernible] to feed your smelter. So is there a plan B in case Tara Deep doesn't work?

There's not really a plan. I mean, there may be plans A's and B's sees within the Tara Deep project around how to handle a potential issues and we have those.

If were to come out that the Tara Deep project is either not feasible from a technical point of view, or from an economical point of view, or from a social point of view, or if we don't get permits for it or whatever can happen, then we will think about our next step as of that. We are not pursuing any mining activities just to feed the smelters That one can be handled in much easier way, and much different ways.

But of course, we will always look at potential opportunities to do things in zinc with or without Tara Deep. Operator, please, we have time for one more final question.

Thanks.

Thank you so much.

Just a follow-up on the electricity costs. I think you mentioned a 100 million SEK increase quarter-over-quarter.

So annualized, it's about 20% inflation if I'm not mistaken and I think in the last call you were talking about 12% to 13%. So am I looking at the right numbers?

And if that's the case, what's driving the incremental costs?

One important part of the difference between the two quarters is, consumptions. We had quite significant maintenance stops in Q3, so the volumes are different between the two quarters.

That's clear. Thank you.

Well, I thank you-all for listening into this discussion. I hope you-all feel a little bit more educated afterwards.

I'd like to summarize that I feel that we've had a very good quarter especially within the mines. We feel very good about going forward.

We've also had a, I would say, strong update of the R&R situation which means we feel confident going forward. Thank you, everybody.