Glencore plc

Thank you. Good morning.

Thank you for joining us wherever you are. This morning from the Glencore side, Gary Nagle, CEO; Steve Kalmin, CFO; and our Chief Operating Officer, Xavier Wagner, will be presenting today.

I'll hand over to Gary now.

Thanks, Martin. Good morning, everybody, and good afternoon for those dialing in from other parts of the world.

Thank you for joining us for our first half results presentation for 2025. The presentation is up on the website.

Some of you will have it already. I think Martin sent it out to many of the analysts.

And we'll skip straight to Slide 4, which is a familiar slide to all of you. We kept it the same format so it allows for easy understanding of our presentation and our results, and give you our 2025 first half scorecard.

We all know this year had started off with weaker commodity markets, some economic uncertainty around geopolitics, around tariffs. And we've seen despite that a very pleasing financial result for Glencore.

Our adjusted EBITDA for the first half of the year, $5.4 billion, made up between our industrial asset business and our marketing business, focusing a little bit on each separately first. The industrial asset business and adjusted industrial EBITDA of $3.8 billion, and that's despite very low, in particular, coal prices.

Period-on-period, we've seen new cost of coal prices down more than 20%, and we've seen hard coking coal prices down as much as 33% in the first half of the year versus the first half of last year. So naturally, we would expect to see a lower adjusted industrial EBITDA.

On the positive side, we've had a very, very strong result from our zinc gold business, in particular, the zinc gold business out of Kazakhstan, which has benefited from strong zinc exposure in our Kazakh operations. We've also had a slight disadvantage in the first half of the year which will come back in the second half of the year simply because we have a mismatch in the weighting of production of copper in the first half versus second half.

As you would have seen from our production report last week, our copper production is heavily weighted towards the second half of the year. In fact, 60% of that will come out in the second half of the year and only 40% in the first half.

It's a temporary change in weighting. And these are largely expected operational factors, which will come back in the second half of the year.

Much of it relates to grade, 1 or 2 other things, and we can do a deep dive into that a little bit later, and Xavier is here, who can help a lot with that. We're also very happy to have EVR as part of our reporting suite for the first half of this year.

It wasn't part of our reporting suite to the first half of last year. It contributed an adjusted EBITDA of $786 million.

And those of you who joined us on our EVR site visit a month ago would have seen the top class Tier 1 asset that we've now brought into Glencore, the amount of value creation and synergies that we're bringing in. We have a superb operational team there, a very exciting multi-decade, low-cost, high-quality asset in an excellent geography.

So that rounds out the highlights and sort of main issues that have impacted our industrial adjusted EBITDA for the first half of the year. Moving on to marketing.

A very pleasing result given the type of uncertainty we've seen. And we spoke a bit about this at our previous results presentation, where a lot of the uncertainty and volatility within the market is not always something one can capitalize on from a marketing perspective because these are not structural arbitrage opportunities where things like tariffs are being announced on Monday, changing on Tuesday and being scrapped on Wednesday.

So these are not areas where one can be -- positioning yourself for an expected arbitrage in the long term. But with that said, we've had a very pleasing marketing result coming in at $1.4 billion adjusted marketing EBIT for the first half of the year.

That is annualizing above the middle of the range, our old range, and I'll talk about the new range in a second. That's annualizing above the middle of our old range of $2.2 billion to $3.2 billion.

It's been a challenging energy market conditions. However, the metal side had done particularly well, and in particular, we call our copper with the very low TC/RCs and a very tight concentrate market that's allowed our copper department to have a very healthy Q1 marketing results.

With regards to our marketing range going forward, we've had a number of questions for many years around when are we going to adjust the marketing range. Steve had been quite clear that we wanted to make sure that, a, we had moved into a new sort of era of where we're comfortable on the marketing range.

And also to have a bit of clarity once we knew that the Viterra earnings were moving out of our marketing business on the sale of Viterra to Bunge. We concluded that sale on the 2nd of July this year and therefore the marketing earnings come out of that range.

So the old range of $2.2 billion to $3.2 billion, in fact, if you remove the marketing earnings from Viterra, let's call it, an average $200 million a year, maybe a bit higher in some years, a bit lower in other years, was ex Viterra, probably $2 billion to $3 billion. We've now, on an ex Viterra basis, increase the range from -- to $2.3 billion to $3.5 billion going forward.

So the midpart of the range has now moved up to $2.9 billion from effectively a $2.5 billion ex Viterra, which is a 16% increase in the midpoint of the range. We're very comfortable with that, and we look forward to achieving that profitability in the years ahead.

Moving on to -- or before we move on ahead. On our net debt to adjusted EBITDA, we're coming in slightly over 1, 1.08.

And just to point out, we did close Viterra a few days later than we expected to. That was meant to close just before the year-end, closed on the 2nd of July, as I noted.

Had it closed on the 29th or 30th of June, our net debt to adjusted EBITDA would have been 1, which is a very comfortable position to be in. Our cash generated by operating activities, a very healthy $4.3 billion.

And as we've announced previously, we are repaying our shareholders handsomely $3.2 billion of announced shareholder returns. We have our base dividend under our very clear and transparent capital framework.

And we've also already completed a $1 billion buyback, and we've announced another up to $1 billion buyback to be completed by our annual results. So we are paying back our shareholders for their continued loyalty, and very comfortable and happy to be able to return those -- make those returns to shareholders.

Moving on to Slide 5. We have announced with our production results last week and a little bit more granular detail today around some organizational reviews that have resulted in approximately $1 billion of cost savings, sustainable cost savings on an annualized basis across the business versus our 2004 baseline.

What we've done is a comprehensive review across our industrial portfolio. We have streamlined our operating structures.

We've optimized our departmental management, and we've identified opportunities to support enhanced technical excellence and operational focus across all the businesses that we run. As a result of that, certain changes have been made, including the creation of a combined nickel-zinc departments, as you know, there were 2 separate departments previously.

And they also have management oversight over our overall custom met processing asset portfolio, which has created a lot of synergies and a lot of cost savings for us. I mean that's just one sort of initiative.

There's close to 300 or I think a little over 300 different initiatives and programs on the go. And all of those have led to approximately $1 billion a year of recurring cost savings across these initiatives and across the entire business.

These include optimization and savings of headcount, energy, consumables, contractors, maintenance, admin functions and the like. And we expect to have at least 50% of that, in fact, quite a bit more than 50% of that, achieved and banked during the second half of this year, and we'll have the remainder of that done for the full year 2026.

If you move over to the right-hand side of Slide 5, you'll see a little bit of split by department and split by level. Starting by the split by level, this is heavily weighted towards the assets where we've got 3/4 of the savings coming out of the assets, but with obviously corporate and department overheads have kicked in their share.

And if we drill down a little bit more on the first wagon wheel on the right-hand side of Slide 5, most of the savings coming from the coal, copper and zinc-nickel divisions with alloys and oil putting in their fair share and corporate as well, streamlining, making use of our technology and ensuring that we save this $1 billion in the business going forward. And with that, I'll turn it over to Steve on the financial performance.

Thanks, Gary. If we look at Page 7 and, again, in a fairly usual format that you've become familiar with over the reporting periods of Glencore, various of our financial headline numbers, most of which are covered later on in more detail in slides.

I'm not going to dwell too much on this. But adjusted EBITDA, Gary spoke about at $5.4 million, down 14% for the reasons have been noted, primarily in the industrial side, lower coal prices, although they have turned from Q2 lows, and we'll show you some spot generation numbers also in cost structures later on in the business.

We are running around but we produced our spot illustrative EBITDA at $14.2 billion. So to put the half in context and also expected large recovery in both earnings and cash flow into H2 and if we hold at these macro levels.

Balance sheet wise, we did move higher to $14.5 billion net debt. We'll talk about that later on.

You've seen just a 1- or 2-day unfortunate timing around closing of the Viterra-Bunge transaction just on 2nd of July. There was circa $900 million of cash and received the Bunge shares on that day.

That would have brought us into sort of the mid-13. We'll show the clear pathway back towards $10 billion by the end of the year and the prospects of significant additional top-up returns by virtue of our Bunge shareholding that we also have, which we'll talk a bit later on as well.

And with the pro forma, the net debt EBITDA with those Bunge proceeds at 30 June around 1x still show significant financial strength and headroom. If we go across to Slide 8, then we'll drill into the various numbers.

We can see the adjusted EBITDA in the industrial side of $3.8 billion, down 17%, really a function of 2 areas: lower coal prices, we'll see that on the waterfall bridge slide on the next slide, which we'll run through; as well as the lower timing-related operational factors within our copper industrial business across various operations there, Collahuasi, Antamina, Antapaccay and Katanga, all of which are expected to see significant additional volumes in H2. And we'll see through the leverage on both cost structure as well as pricing, cobalt, you've also got the lags in the stockpiling currently going on in DRC.

We're not -- our cost structures later on, we're not assuming that Q4, as soon as the ban gets lifted, that's all going to sort of flow through. It's going to take time to work its way through the system.

So that has impacted, obviously, earnings and cash flow during that period. On the metal side of the equation on the industrial side, we saw a lowering of EBITDA, $2.9 billion to $2.4 billion.

That was down $0.5 billion. All of that was in the copper earnings contributed, it was down $0.8 billion, $1.9 billion to $1.1 billion of EBITDA for the half year.

And really, we need to think in the context on particularly in copper and industrial as being half times score that we expect the full year to be significantly better if I think of that business on an annualized basis, it's a $4 billion plus EBITDA business at the sort of volumes and cost structure that we would expect. But that 40-60 split around volume and production impacts on the copper business, particularly at all those 4 operations that we're talking about, has really lagged in terms of how that flows through.

And we'll show how that sits at this half year in the context of what a full year spot illustrative number looks like and what our cost structures look like also later on. Offsetting some of that drop in the lower copper earnings was a very pleasing increase in zinc reported earnings, which was up $400 million from $0.5 billion to $0.9 billion.

A big part of that was our gold production out of -- one of Kazzinc's units over there, and we saw a big increase in realized gold prices. And spot prices, we'll see later on or even higher than the average.

So there is momentum both pricing and volume significantly into H2. On the energy steelmaking coal side, we've seen a drop of $0.4 billion from $2.1 billion to $1.7 billion, exclusively in pricing.

Again, we'll see that on the slide. Gary spoke about a Newcastle average price down 21% period-on-period, and the premium coking benchmark down 33% period.

Pleasingly, EVR, it's the first period that's come in, in the H1 period. That contributed $786 million for the first half.

It will become clear as we work through the slides later on, the $3.8 billion for the half year in industrial EBITDA is sort of positioned and should be thought of in context of a spot illustrative industrial contribution of $10.9 billion that we'll see later on. So that is -- which itself was higher than the full year '24.

So that does sort of augur well for the contribution and earnings prospects of this business, both in H2 and beyond as well. The waterfall bridge on Slide 9, The themes have come through in previous slides.

$4.6 billion was the first half of '24. $1 billion down in price variance, $1.2 billion of that $1 billion was in energy, $1.1 billion was coal, a little bit lower on the oil side where we have a little bit of upstream oil and gas exposure in our oil business.

The prime contributors there is both steelmaking. Average hard coking benchmark was $277, the previous year to $185.

That was down 33%. You can see that average of $185.

We have seen in the last 4 to 6 weeks a pickup in pricing there, and we'll reflect that later on in our spot illustrative, on the Newcastle side, average $131 in the previous period to $1 03. Forward curve is -- the play is over $120 now.

So again, we'll look at the contribution there. And the zinc business was a positive 0.2 contribution, and that's what gold prices having averaged from $2,200 to a little over $3,000, again, significantly trailing spot price at the moment that was up 39%.

So that volume variance is turning and has turned since 30 June, and we'll see that through cash flow generation. On volume side, of that $1.1 billion, $0.9 million of that was in the copper business, including $160 from the cobalt variance period- on-period in terms of having to stockpile cobalt since February and the impact that, that has in terms of capitalization and inventory that's not otherwise being able to be sold and contributing to both cost alleviation and EBITDA generation.

Again, that's a big turning a little bit on the ferro side as well as we've shut down some ferrochrome production. Cost variance was 0.

A pleasing performance today. We'll see that, and that should develop positive as we go through this year, particularly as we deliver some of those cost savings that Gary mentioned.

FX was a small tailwind through first half that should moderate a little bit as we've seen a bit of U.S. weakness creeping towards Q2 relative to Australian dollars and the Canadians.

EVR, we've separated just for the purpose of this period. You can argue that that's a volume variance, but that's the business that's come in that was only acquired in July 2024.

At some point, that will cease being separately presented and we'll just feed in the various categories that we do have. The other was a small positive contribution, just to call out the aluminum business that, for us, the more recent acquisition of the Alunorte.

We have our stake there. And we also have our stake in Century, both associates, equity accounting, good flow contributors and good financial performances from both those businesses.

That should start seeing cash flow benefits through dividends and the likes coming through. They both massively improve their balance sheets and strength, and we're very happy to be investors in those 2 businesses.

If we look over to Page 10, very busy slides which provides at least across our 4 main businesses that we give specific guidance on in copper and zinc, steelmaking coal and energy coal. We've got all the cost volume profit aspects of how everything is derived with some commentary and various changes period-on-period as well as full year '25 updated guidance both around cost and the various aspects that you can revisit some of your modeling.

That's for both copper zinc byproducts and the steelmaking and energy coal is updates for latest macro 6 months forward as of this particular period. I think before we come back and finish on Slide 10, I'd just like to jump forward to Slide 16.

I think it's worth spending a few minutes on the various costs of those particular businesses as well. On Page 16, you can see copper off to the left of how that's developed from '24.

'25 is very much a sort of an outlier now by virtue of sort of mathematical denominator and asymmetry effect on those H1, H2 production. So it's dragging performance and mathematically distorting the true potential and competitiveness of that business with a net cost structure of $225 million for the first half.

That's a gross of $280 with $0.55 of byproduct credit. You can see from a full year to full year '24 to '25, which is where we expect it to perform once the H2 volume recoveries are there, will be flat net at $174 against $174 and flat basically even at a gross level, notwithstanding it is slightly lower production against '24.

So some savings are coming through. And then we'd expect by the years '26, '27, our cost structure in copper to go down into more like the $140s once production recovers back over 900,000.

And we've spoken to a pathway back to the 1 million tonnes by 2028 when the cost structure will be more in the $1 to $1.20 or so a pound back at that particular period given denominated effect and some assumption of some high cobalt prices in the more medium term. So that's it on the copper side, very much reflecting the 40-60 split and deriving where we were with our reported EBITDA for the first half.

The zinc business has seen tremendous savings, cost improvement and earnings contribution during that period. From '24 to full year '25, we can see a $0.44 per pound reduction in unit cost before byproduct.

And with the significant gold buy products that we're generating from that business together with silver and other credits, we're now into negative post byproduct costs on a full year basis of $0.12, and at spot, the half year was down to $0.02. So that's contributing significantly to that business and is expected to continue, its production is roughly evenly split, 48-52 for those businesses.

On the steelmaking and energy coal, for the first time, we've got EVR now coming through for this particular period. In 2024, full year EVR was only half a year.

So '25 half year and '25 estimate is reflecting the full pro forma of that business now, the sort of over 30 million tonnes, down at around $110 per tonne. So significant margin still in that business, and you can see what the new construct of that business at that particular structure.

Good cost focus, there is the impact as we go through revenue-linked royalties. So we don't mind higher prices, higher costs sometimes if it's a function of higher revenues and higher margins by virtue of how revenues are calculated in both Canada and Australia in particular.

And pleasingly, the energy coal business is being able to keep its costs around that $65 even with Cerrejon, I think, lowered its annualized production that 5 million to 10 million announcement that we gave recently. They have managed their process very well of sort of reducing production and keeping and ensuring that it's -- that the cost impact of that has been something that is working for the overall business in terms of efficiencies.

So I think with that, we can get back to Page 10, and it will just logically flow through as to how copper has contributed $1.1 billion of EBITDA with that cost structure in that volume. On a spot illustrative basis, which we'll look later on, on Page 17, that business will be at $4.1 billion of illustrative annualized.

So you can see the significant additional both profit contribution we expect in H2 and where that business we see leveling out at the end of '24 and beyond. Our zinc business was $0.9 billion for the half year with a spot illustrative of $2.1 billion.

Again, that's with lower cost and higher zinc and gold prices that will be coming through in that particular business. The steelmaking coal was $0.9 million, and that was with an average $184 hard coking premium or benchmark for the year.

Spot will be $2.3 billion with a price that's now on a forward basis has picked up over $200 a tonne, forward 6 months, which is the full year '25 update, which is relevant for where we expect 2025 to come out, you can see we're basing a realized price of $188 for the full year, which reflects the first half actual delivery against the full year. The same on the energy coal, $0.7 billion was for the first half, a spot illustrative at $1.8 million.

That's with a forward strip 12-month Newcastle price at $121 now, which we'll see later on. I think the explanations are fairly self-explanatory.

If we go into Slide 11, The marketing outturn, $1.4 billion, 8% down period-on-period. It really was a period in which the metals contribution was the star and the shining contribution, $1.2 billion previously up to $1.6 billion.

We've called out copper, in particular, for all those that may want to get ahead of themselves, thinking this was all COMEX and the likes, that was actually a relatively minor part of that contribution. It was generally overall copper markets globally, around TC/RCs, regional dislocation tightness in markets and the full array of supply and customers that we have across intermediaries, concentrates, cathode, final products and value add.

Of course, there was a little bit around some sort of U.S. noise, but that was by no means a material contributor during that particular period, and then would reflect the fact that there's been an unwinding of that trade.

We were just fine through how that occurred in the last few weeks with no impact. On the contrary, that business has continued to perform very well since 30 June as well.

On the energy and steel market, it was a very modest contribution. We saw very well-supplied markets, geopolitical uncertainty.

That's across coal, gas, crude and the likes. Very little actionable arbitrage or volatility, but collectively shows the strength of the overall marketing business across headline segments, but also underlying numerous profit contributions and commodities that we are active in.

There is a bit of a quirk sort of accounting-wise where we have to pre-recognize a lot of accounting provisions across portfolio exposures. We almost have to function like a bank.

So we have receivables, we have prepays, notwithstanding that you're expecting performance. We have to take our provisions against uncertainty of sort of potential credit losses that you may realize.

Even one of the prepays that we talk about in working capital, there was an outlay of $165 million in June, towards the end of June. It's a very good business, but you're forced to make a day 1 credit adjustment of $35 million.

So you take a day 1 hit even before these contracts kick in. So there's been quite a bit of provisioning accounting for various overall portfolio that's gone particularly into the oil and gas business, a large part, which we expect to sort of flow through.

So there is a bit of a timing lag in performance that we expect from the energy part of the business. As Gary mentioned, we've upgraded the range to $2.3 billion to $3.5 billion with the Viterra business now having been sold.

I think a few key slides as we look at the balance sheet and how we're thinking about positioning shareholder returns, cash flow generation in the business. Page 12 is just the, if you like, the flow of the bridge from where we were at the beginning of the year to the $14.5 billion.

These are all including marketing leases and acquisitions and EVR debt that we assume the various factors that have come into the business as well. $11.2 billion FFO, which is EBITDA, interest tax.

We weren't -- it's something that is worth considering for future again, H1, H2 modeling outcomes. Our net interest from a cash perspective is increasingly getting more heavily weighted towards H1 over H2, particularly the last few years this year, previous year, maybe the year before that.

When we do our various bond issuances, it's very concentrated around the March, April, May period once we've signed off on annual report. We've done issuance in quite big size.

These are annual coupons. And our net cash interest for the period was $1.3 billion, where full year outcome which will be less than $2 billion in our estimates.

So you are looking at a 2/3, 1/3 split in terms of cash that does come through the FFO, and then we'll have a very light period in terms of interest paid over the second half of the year. So something to consider in modeling, and it's something we'll incorporate more in guidance is becoming a more material item in terms of, again, timing of cash flow movements.

And net CapEx, $3.2 billion. Those 2 then cancel each other out.

The investments, the only significant one to call out was the Singapore refinery, the Bukom refinery that we bought with Chandra Asri from Shell. We have a minority 20% stake.

Our equity contribution to that business, which is performing very well, meeting targets, very comfortable with it. It provides a big boost to our Asian oil business in the supply of crude and the offtake of product of a good sized important located business.

That was $147 million on the equity side. Associated with that was also $300 million in working capital contribution to that business, which is then part of that next $1.1 billion that you see an increase in the non-RMI working capital, We're expecting good returns out of that business as well.

Various other oil Africa opportunities, some aluminum opportunities, quite a bit of that was in Q2, in fact. So very few of those benefits have been accruing in terms of marketing performance as well, but they're all very closely critiqued within the business to ensure that we're allocating capital proportionately correctly and delivering the right returns.

Distributions and share buybacks was $1.1 billion in shares. The first tranche of the dividend of $0.6 billion, there was $0.1 million of minority dividend associated primarily with Kazzinc, in which we don't own 100%.

We got 70%. Something just to call out in the other category of -- that added on to our debt.

One of the quirks of the lease accounting standards that came in a few years ago is -- it does catch various items that historically just would have been part of the OpEx structure in business. Our Kazzinc business has been operating and leasing a hydroelectric power station, which is part of its energy mix over many, many years.

It was as part of its cost structure. It expired a few years ago.

We were looking at various renewal options, short, medium and long term. And we've extended a 5-year lease or so on that particular asset within the business, which is a certain annual charges now gets capitalized onto the balance sheet as a finance lease within Kazzinc.

Not on cash, but It's part of the quirks of how accounting works these days as well. So finishing $14.5 billion.

We'll jump over the next slide, which I think is obviously, a key slide as to how we think about debt progression, shareholder returns and so evolution, if you like, of sort of capital returns and net debt levels in the business. Of course, $13.5 billion is where we're starting as of June 30.

That's taking out those marketing and lease liabilities, which we do of the $1 billion. This is ordinary course parts of the business in how we project or pro forma out towards the end of the year.

What things are happening in the next month. Of course, the 2nd of July, we got $900 million from the tariff, so that's the first of the pink blocks that's there.

We're obviously positioning for the second tranche of the base distribution, which is payable in September. You roll those forward.

The $3.2 billion is just a mathematical A plus B plus C, how do you get to $10 billion, $3.2 billion. We do both in our expectations and modeling, and we show you how we triangulate all those numbers, that's the part of how we see significant cash generation and deleveraging the balance sheet as we roll out to the end of the year and back towards our $10 billion, from which we would ordinary course think about base distributions, top-ups and surplus capital generation within the business as well.

So some unwind of working capital, that's 40-60 split in the copper, that will supercharge earnings in the second half of the year. Spot annualized cash flow doesn't have that H1, H2 split, but that's showing $4 billion of free cash flow.

We'll look at that later on. And you can see a clear deleveraging pathway back towards $10 billion.

What we put separately over there is just to show how we think about the Bunge shares that we received on 2nd of July. Now these are -- you would have seen our announcement back on 2nd of July, we said we closed the transaction, very pleased with that.

We've got $900 million or so of cash. $2.6 billion of shares valued at the time.

There was also the value as of last Friday. Today, it's worth something like $2.7 billion.

These are now shares that are in very liquid, New York listed, with the largest shareholder of 16%. Agricultural for a long period of time has been, if you like, noncore to the broader Glencore industrial energy and mining part of the business.

At some point in time, that will be monetized appropriately for the benefits of Glencore shareholders some point in the future. We have some lockup conditions, which is 12 months.

So it's in 11 months and obviously counting down doesn't mean on day sort of 365 that there's going to be some sort of placement of those shares. We're going to work with Bunge itself.

We're very excited about that business and its prospects, the synergies that sector itself. And we think that there's a lot of opportunity and potential for that share both to re-rate and to deliver significant value to shareholders at that time.

So we're going to do it sensibly. But over time, almost cash- like given liquidity and ability to monetize that particular investment.

What we did then do back on 2nd of July is we thought it was appropriate and still exercising sufficient financial prudence, was to say, shareholders, you've been patient. This has been something that we've been actioning for a long period of time.

We thought it's appropriate that we could do an early payment or a buyback of $1 billion related to those shares, underpinned by those shares. And that's the crux of the current buyback that we've been doing that we launched back in 2nd of July, and that will be ramping up very shortly under this new structure that we've agreed was a more efficient form of buybacks, which we announced also at the AGM last year.

So those we've put in a separate bucket, if you like. That will be focusing, reporting it separately, tracking it separately.

And as those shares ultimately get monetized and distributed in some way, shape or form back to the shareholder, the full $2.6, billion, hopefully much more over time, $1 billion coming back now. So if you like, there's a gap that will always track between that the pink bar, the yellow bar, that's what's there to play for over a period of time.

We will continue to report these separately and how we think of the balance sheet separately in terms of debt, surplus capital ability and timing of distributions to shareholders. So with that extra buyback of that $1 billion, as Gary mentioned, that did take us up to $3.2 billion of announced capital and significant strengthening in balance sheet, liquidity of overall balance sheet and ultimate capital returns that we expect to flow through in the near future.

In terms of Page 14, nothing particularly new here. This is just an update on our CapEx numbers, industrial CapEx.

No change to guidance over 2025 to 2027. Currently, we said $6.6 billion per annum.

That was elevated for EVR, which was $1.4 billion with some nearer-term requirements around fleet and water treatments. Once that period start, EVR reduces to $1.1 billion.

Many of you on the analyst side were there on the visit towards the end of June. You can see the good work that's happening.

You can see some of the synergies and the focus of the team and also looking to optimize both around mining and infrastructure generally. But for now, we've held $6.6 billion.

That's tracked for the first 6 months, tracking okay. $3.2 billion was our cash, so below 50% of that full $6.6 billion number, if that was the number for 2025.

We've called out that $249 million Kazzinc lease noncash, which still gets capitalized. So it's part of our $3.4 billion, but it's not a cash item at $3.2 billion.

Everything else is -- so as you were pretty much in that business. You can see a lot of -- on the copper side, a lot of work has gone into deferred stripping across those particular operations and certain fleet renewals.

Some of that explains also some of the sequencing and the grades that we're going through and how that also expects to evolve into second half and beyond as well. We called out up to $400 million earmarked for MARA, El Pachon and some Collahuasi studies.

That's still a lot of work happening on that. It's harder to capitalize some of that at the moment.

So more of that's getting expensed rather than capitalized. There's only $20 million of CapEx that was spent at MARA and El Pachon.

But on the OpEx side, there was $70 million of negative EBITDA in terms of what that contributed. So cash flow-wise, still as expected, but a little bit more in OpEx rather than CapEx, which would be neutral from a shareholder perspective.

Just to wrap up before we get to the spot illustrative update. Visually, it's useful to see how that sort of production H1, H2 sits across our various commodities.

Copper is the one we all know about with the big step-up required between H1 and H2 to get the 500,000- plus in H2, and that's not relying on any one asset. It's sort of contributions across the board.

We've explained where those sort of factors and bottlenecks and timing sequences have been across KCC, Collahuasi, Antamina, Antapaccay in particular. We've already seen -- starting to see pickup in sort of H2.

And then some of that cost structure I spoke to earlier is that with being in the higher 8s. We then tick over into the lower 9s in '26, '27 and the pathway towards 1 million tonnes by 2028.

All the other commodities are pretty straightforward as you look, whether it's on steel making between H1. They're all in the 52-48, so 58-42.

So production outlook. Page 17, just to wrap up before we hand back to Gary, a slide that you'd all be very familiar with, our spot illustrative.

This is not a forecast for '25. This is as if we were starting the year 1st of January.

Didn't have a period that was already baked in. So looking purely on cost structures, guidance.

This year's production guidance and cost structures as has been reset, remacroed, looking at both costs and sales on a sort of an unconstrained fashion. We've got our copper at $4.1 billion.

That's after continuing to expense in some overhead in some of those development projects. H1 was only $1.1 billion, so you can see the sort of catch-up there that we fully expect.

Zinc at $2.1 billion, steelmaking coal, $2.3 billion, energy coal $1.8 billion. That's using a strip of on the net coal or steelmaking coal 201, 12-month average forward.

And that brings us down to -- you can see portfolio mix adjustment on energy coal, that's 121. And those numbers year-to-date were significantly lower.

So that's where we could see the step up to $4.1 billion annualized across our coal business from $1.6 billion for the first half, and the various other businesses in the other category that's marketing at midpoint of new range $2.9 billion. And you can see we rolled down to illustrative free cash flow of $4 billion.

And with that, I'll hand back to Gary to wrap it up.

Thanks, Steve. So one more slide to go, Slide 19, before we turn to Q&A., which is also a familiar slide to you, and it just really outlines our -- how we deliver our strategy and our priorities for 2025.

As I've said on every call before and will most likely and, in fact, definitely will say on every call going forward is that our number one priority in this business is safety. It is our -- not only our drive, but it's our obligation to ensure that our people go home safe every single day.

It's nonstop work. It's something we continue to redouble our efforts period in, period out.

Hats off to Xavier and Lucy, who's driving a cultural change across our business. Pleased to report we've got in the first half of the year fatality free.

It's nothing to celebrate. We just continue heads down, working hard and making sure we keep our people safe every day.

A key part of the Glencore DNA, the Glencore culture is to ensure we remain supply disciplined. We believe in markets.

We don't believe in oversupplied markets. We want to see higher margins for our products.

We don't want to run businesses which are loss making, and where it makes sense, we will curtail or shut production. You've seen us do that historically and, again, during the course of the first half of this year, where we've cut coal production at Cerrejon, as Steve mentioned, 5 million to 10 million tonnes.

We've shut various of our ferrochrome smelters in South Africa and we've also shut some of our copper and zinc smelting, custom smelters where we've seen these operations turn negative. And we continue to monitor all our operations to ensure that we run profitable operations and where we can keep markets in balance or even in a supply deficit.

The copper department continues to go through a transition where 2025 is expected to be the floor for the copper department production volumes. And we have a pathway which we've outlined to you previously, back to 1 million tonnes a year by 2028.

And it's not just getting back to the 1 million tonnes. It's also the significant growth potential getting back above 1 million tonnes through our very low-cost, low capital intensity, brown and greenfield projects going forward beyond that.

The 2 highlights of that -- in fact, there's more than 2 highlights, but we're only calling out the Argentinian ones at this stage, which is MARA and El Pachon. MARA, as you know, is effectively an extension of Alumbrera.

That's a 200,000, 250,000 tonne copper equivalent brownfield project. El Pachon is a 2-phase project, El Pachon and then what we're calling our grand Pachon, which will be a 2 line and then ultimately going to a 4 line project starting at 350,000 tonnes and moving to probably 700,000, 750,000 tonnes.

Multi-decade project in Argentina, very excited for these 2 projects. And we will be -- we're expecting to submit our RIGI applications in the very near future.

On the marketing side, as I mentioned earlier in the call, we have some near-term macro uncertainties. But as we know, this also presents opportunities for us.

And we've seen those opportunities present themselves, in particular, in copper in the first half of the year and, to some extent, also in zinc, and we expect to see some other dislocations in some of the energy markets going forward. And each time we see these dislocations, these arbitrage opportunities and there's uncertainties, it does often present us with an opportunity to profit from that, and we'll continue to do that.

Along those lines, even the U.S. tariffs across the commodities can create these dislocations.

We now have a bit more certainty around tariffs. Well, they're certain for today.

We don't know what happens tomorrow, but there does seem to be a little bit more certainty in terms of some of the tariffs, and therefore, assessing the trade flows and routing of various commodities and what makes the most logical sense, that often presents opportunities for us. And we will capitalize on that through our world-class marketing business.

Our key driver in this business has always been to create value for shareholders. That's what we're here for, and we're driven to do that.

One of the ways we do that is through these $1 billion a year recurring cost savings by end of 2026. I've talked a little bit in detail around these more than 300 initiatives which are underway, a lot of them already banked.

We'll have more than half of that $1 billion banked by the end of this year and be able to deliver the full $1 billion, if not more, by the end of 2026 on an annualized basis. It keeps us fit, it keeps us lean.

It keeps us mean. And that saving ultimately then is a value creation for shareholders.

Our second half cash generation is expected to be stronger based on stronger second half operational performance, and that will contribute, as Steve talked around our deleveraging by year-end. That will all result in maximizing our free cash flow generation.

And again, just pointing back to the slide Steve took you through, our $4 billion of free cash flow generation at spot illustrative prices. We've mentioned earlier -- or in earlier presentations, and we did mention on the media call earlier that we've completed our analysis of potential listing, jurisdictions and exchanges.

We've done a comprehensive review of the various exchanges around the world. Clearly, the U.S.

capital markets remain the unrivaled leading markets to explore. We've done a deep dive on that, the costs, the benefits, the flowback impacts, the amount of the ability for indexation.

And where we sit today is we do not believe that becoming a U.S. domestic issuer or having a sponsored ADR program will be value accretive for shareholders at this point in time.

However, we do continue to -- we will continue to monitor the market developments and, this will be a watching brief for management and the Board going forward. And then lastly, returns for shareholders.

We've announced for 2025 $3.2 billion of returns to shareholders. That's what we're here for, is to ensure our shareholders get their returns.

We've paid our base dividend into -- well, the first tranche of our base dividend was paid in the first half of the year. The second half will be paid in September, $1.2 billion.

We completed the first tranche of our buybacks, our $1 billion announced buyback, which we announced in February. We've already completed that by end of June.

And on the closing of Bunge, we announced an additional up to $1 billion of buybacks going forward. So that brings our announced buybacks with -- or announced capital returns to shareholders of approximately $3.2 billion for 2025.

And with that, we'll move to Q&A.

Two questions for me. One for Xavier, one for Steve.

So Xavier, lots of investors sort of asking questions on these copper grade uplifts into the second half. It feels like it's a bit of a big ask.

And so I guess thoughts on the risks here. Are you having to do selective mining to hit your production numbers in the second half?

And then, Steve, a question on RMIs and, I guess, this idea of non-RMI working capital. For me, I used to think about this as RMIs was effectively moving working capital from the operations into the trading business.

So I always struggle a little bit with the idea of non-RMI related working capital. I'm just wondering, can you give some color and maybe a bit of an indication of what the absolute level of non-RMI working capital is today?

Thanks for that question. I'll go first and just speak through the copper uplift in the second half.

I think what you're seeing is exactly the opposite of doing selective mining. The first half is really about setting ourselves up to actually access ores which were better grade to start with.

Part of that is remediation from some of the geotech events we had last year and actually sticking to the mine plan and working through those areas to remediate it. But that process has gone relatively well.

If you look at KCC and DRC, for example, we're up 15% year-on-year on material movement as we go through those areas. The ore required to deliver the second half of our plan for this year is available.

It's in front of us. So we're not having to change or do anything dramatic to actually deliver a different performance.

This was really mining in sequence, accessing the ores as they become available. It's a function of the ore body itself.

And really, this is about having that discipline to execute the plan as it was intended.

Jason, just on -- I mean, RMI, by its very name, is readily remarkable inventories. So it is the suite of the physical inventories that you can both -- you can kick, you can touch, you can inspect, you can look at and is sort of going through our business roughly sort of with the conversion cycle of every sort of 30 days or so.

So this is sort of the aluminum, this is the oil on boats, this is the copper, this is the different shipments, these are all -- price risk has been largely been fixed there. This is either through hedging.

This is through physical price contracts sort of and the likes as well. The other part of the non-RMI is not inventory.

So it's your suite of receivables. It's your classic sort of normal discharge of vessels, receivables.

They're paying 15 days, 30 days. You got your payables.

It's your various sort of hedging. It's your mark-to-market.

It's your margin calls. It's the whole suite of what's left in the business.

And the differentiation of -- now it's all part of working capital, it's all a part of generating earnings within that business and the high ROEs, ROIs of that business has generated over the years. But RMIs has been the one that has been, if you like, developed over sort of many, many years as the appropriate adjustment to look at more sort of comparisons across industrial leverage in the business, some offset against net funding for which to tracked net debt EBITDA and cash flows and looking at balance sheet structures.

The non-RMI will then, of course, go up and down depending on what else is happening. And these are -- and this will affect things like sort of prepays or other movements in working capital mark-to- market.

You saw -- I mean, a few years ago, we had a massive buildup through the sort of gas shenanigans in Russia, Ukraine, where we had some big mark-to-markets physical with some of our large LNG. You have the TTF, sort of Henry Hub dislocations.

We had various terms with non-Russian business that all sort of changed all that. Broadly, we're flat in the marketing business on non-RMI.

So receivables, payables across all those various categories is sort of broadly flat. But it obviously changes every day, what that working capital.

So one is, by definition, inventories and the one is non- inventories.

Steve, if I could just follow up. So you're building up an inventory of cobalt.

Is that -- where does that sit? Is that an RMI?

No. That's sitting in the industrial businesses.

That's part of KCC, MUMI kind of balance sheet.

Two questions from me as well. Firstly, on the industrial portfolio review that you've recently done, did it identify any noncore assets?

And specifically on Kazzinc, it's an asset where there's been a lot of talk over the years over a fuller or a partial exit. Given the country risk profile, the gold exposure that it has now, how does this fit into your longer-term plans?

And then the second question is on Collahuasi and QB. This could be a big area of value unlock, and you've potentially got a big investment decision in Collahuasi from 2027.

So can you give us any color on whether talks are progressing between yourselves and taken in any meaningful way?

Thanks, Liam. On noncore assets, we've -- over the last few years, we've moved through a number of assets or moved a number of assets out the portfolio that we've deemed noncore tail assets which are just really subscale for Glencore and we've largely completed that process.

Of course, all assets, as markets move and as things change, one has to continue to review our portfolio. But we wouldn't say we have a bucket of non-core assets that we're trying to get out of.

Specifically around Kazzinc, Kazzinc is a core asset for Glencore. It's a top class business.

As you mentioned, produces gold is -- a significant amount of gold, plus 0.5 million ounces of gold a year which is a big cash generator for Glencore and Glencore's partner in there, the Kazakh government Samruk, who is a close partner of ours and we work very well with. And the zinc business in particular, Zhairem in smelters.

Smelters is a little bit different at the moment, but they are sort of integrated smelter within the Kazzinc business. Zhairem is starting to ramp up and reaching nameplate capacity.

Our team has done a great job there. So no, that business is very good and core to Glencore.

Now with that said, within some of our businesses around the world, for example, within Kazzinc or within our South African coal business, you sometimes have one mine, one operation, which within that business may not be fit for purpose. Now we do happen -- sometimes that happens or we may sell one mine or deem one of those noncore.

It's probably something that you would never see because it will be below the sort of materiality threshold, but it does make sense for us in some cases to sell that, and there may be some of those sorts of businesses which do exit the portfolio. But as I said, it's probably something that you wouldn't see at your level and it's not material for the group, but it does help streamline these asset bases in the various geographies around the world.

Kazzinc, generally, as I say, is core. It's not that -- but any business in our operation is in our company is for sale at the right price.

We've said that before. We're not out looking to sell Kazzinc.

We don't want to sell Kazzinc. If someone wants to bid us a huge number for it, that would be the only reason why we would consider sort of selling Kazzinc.

On Collahuasi QB2 , we continue to believe that a merger of those 2 operations will achieve huge amounts of synergies for shareholders on both sides. Anglo did a very good job as well as Codelco.

Codelco and Anglo did a great job together, putting together 2 operations in Chile, and we've seen the results of the synergies coming out of that. Well done to both parties.

We believe that QB2 Collahuasi merger can achieve even bigger synergies than that. We're very eager to do it.

And maybe you can ask Duncan tomorrow because I've tasked him with the job of trying to get that one done.

Is there any kind of momentum in the talks, Gary? Or anything you can say?

Not at the moment, not at the moment. But we're very eager to engage.

And whenever we can engage on that, we will.

Just a couple of things. First of all, on cash returns in 2026, how should we think about the Bunge shares?

Would you potentially look to sort of use more nonrecourse debt and monetize more of that to sustain the buyback if the business doesn't generate more than $3.2 billion of returns? And then maybe a few comments around met coal in terms of the market.

Do you think it's inflecting? Or is it still looking reasonably oversupplied?

And how you're thinking about M&A in the met coal space?

Maybe I'll answer the second one first. I'll leave the first one for Steve.

On the met market, the met markets picked up, as you know, it's picked up sort of $10, $15 over the last few weeks. We've seen some -- the anti-involution initiative coming out of China, which is effectively cutting out some of this loss-making production, which has been positive.

We've also seen, for the first time, a step down in the growth rate of steel exports out of China. And what we've always said is that the steel exports out of China has been really the overhang in the steelmaking coal market because that's being produced by domestic coking coal and Mongolian coking coal.

So those exports are a proxy for Chinese met coal exports. So as we've seen this step down in the growth rate in June, and we're waiting for the July stats to come through, but we expect that to continue dropping, that should then start helping bring the steelmaking coal market into balance.

We've seen some production cuts in the U.S. We continue to see -- even with this increase in price recently, we continue to see U.S.

producers cash negative and won't be able to last much longer. And therefore, we see the market coming into balance in the coming months.

Myles, I mean, on that second question, I think it would be -- I mean, obviously, all the value of the Bunge shares that will obviously sort of fluctuate with its own sort of prospects that we're very excited about the prospects for that business and a very supportive shareholder and are working sort of well with management. We have Board representation there as well.

So all of that ultimately is going to be up for grabs and will -- and is there for distribution to shareholders at the appropriate time while being very conscious of maximizing value and returns and being sort of sensible. Now we thought it was appropriate to already get moving with $1 billion.

How that yellow catches up to the red or the pink, and hopefully, the pink goes higher, I mean, in the meantime it's also -- it's got a nice dividend yield that company as well, even at current share prices, I think it's 3.56 or something. So we're getting paid to just sort of sit around at the moment, $100 million a year or so is the dividends being the shareholder there, which is not bad.

So we haven't built that in anywhere, but that sort of trickles in and it's sort of not bad to sort of buy our time. But everything ultimately will -- the yellow will catch up to whatever the size is of the pink and that will play out over the next couple of years.

Exactly '26, '27, how it all works out, can we sort of increase some of the either nonrecourse or other forms of funding against it, these are all things that we've got to play very sensibly. And you would hope we would do that, and we're very mindful of sort of acting as both good stewards and working very well with the Bunge management team and supporting that business in its own sort of prospects and value creation.

And on the M&A part for met coal, would you [indiscernible] obviously you've got the best assets in the world currently. Would you look to buy more assets if they became available?

Yes, we would. If it's the right quality asset in the right geography with the right cost structure, we would consider.

Just a couple of questions on steelmaking coal. First, in the market, Chinese met coal prices are up, I don't know, 70% in the last 2 months.

And we've seen some recovery in the benchmark seaborne met coal price, but it has definitely lagged what's going on in China. And I'm wondering why that is the case.

That's my first question on the steelmaking coal market.

China -- I mean, at the moment, the Chinese domestic market is tight, and that's why -- and through some of these production cuts that you've seen in the domestic provinces, that pushed up the domestic price. The reason largely for the lag in the seaborne is China is effectively buying the last tonne into the market.

So they're not buying -- when they're buying seaborne hard coking coal. They're actually not buying it at the first tonne in which is setting the price.

They in fact are the ones dragging the market down. So you'll see a slower catch-up of the seaborne market.

It's more related to the fact that the other markets will then start to be able to buy the seaborne met coal that will start to increase steel production as the Chinese slow down steel production, and that will drive the price up for seaborne met coal rather than the Chinese market itself or the Chinese buyers importing seaborne met coal.

Okay. And then on quality discounts in the met coal market.

So it seem like some of the U.S. producers have had really weak price realizations on lower-quality coals.

And it's hard for us to get visibility as to the outlook for those coals. I mean there's not really a liquid forward curve to track.

So are you seeing some recovery in those lower quality coal markets? And in your spot illustrative table, those portfolio mix adjustments, is that based on historic relationships with the benchmark?

Or is it based on what you're seeing in the market today? How do you derive those numbers?

And the question really relates to basically our discounts for lower quality coal. So why that your risk on the portfolio mix adjustment is to the downside?

I mean the numbers that we gave, Chris, was sort of recut last week in July, working off forward of sort of 201 average at 19.6, which is higher than at most times when markets are healthier, let's just say. So with markets a bit weaker, you have seen sort of an increase in some of that discount, reflecting market conditions at that point in time.

Now we are seeing improvements in that market, and we would sort of expect that to again contract to more normal, at least for our qualities. And we obviously had our site visit towards the end of June.

People are very familiar with the various sort of aspects of our grades, qualities and the sort of desire for certain blends and the like. So we feel like we're sort of competing in the right place in terms of realizations.

But this just reflects the market at a sort of point in time that has increased somewhat in terms of those discounts and realizations. And we look at it and rerun these every -- sort of every month.

So we probably are sort of reflecting point in time high discounts. Hopefully, that narrows over time again.

Two questions. First, on the marketing business.

Obviously, metals had a stomping quarter or half in the first half, but energy and steelmaking coal had less. And to your earlier comment on the spreads between different coal qualities, et cetera, should we expect a significantly better market conditions for the energy and steelmaking coal marketing in the second half, because those kind of quality yards are where you guys really do well historically.

So would we see a big kind of step-up from the breakeven to maybe close to $1 billion of contribution from that business? And secondly, on the impairments in Cerrejon.

Can you just remind us what's the remaining carrying book value of that asset in your books right now?

Thanks, Ephrem. Yes.

I mean, I'm not going to forecast sort of what type of marketing earnings we will see second half of the year from energy coal and steelmaking coal, only to say that we've obviously seen price recoveries. Energy coal, Newcastle has gone from sub-$100 to $115 in the last Contango.

Met coal has also gone from sort of mid-$170s to close to $190. And that's driven largely -- and in fact, it is, it's driven purely by supply/demand.

If you look at the energy coal supply demand from being in quite a material oversupply earlier in the year, we've seen that market come into close to balance now largely through the reduction in exports out of Indonesia, which we predicted because we had said earlier that a lot of Indonesian, particularly low-quality producers were underwater, have now started to pull back exports, have started to shut mines. We've done our own share by taking 5 million, 10 million tonnes of exports out of Colombia.

We think we -- in fact, we started off that trend of people being supply disciplined. That's working very nicely for us.

We've seen Drummond pull back some production and exports as well. And as that market now has tightened, we've seen a $20 improvement in the market for high-quality, Newcastle coal.

Now as you know, you can't just look at one market in coal, there's markets within markets, there's qualities, there's geographies and the likes. But as the whole market has moved up in the Newcastle side, we would -- and some tonnages particularly come out of Indonesia, we'd expect to see some volatility within the premiums and discounts, and that will give us some opportunity to make some third-party marketing earnings in the second half of the year.

And same for met coal, We've obviously -- as I say, we've seen some production cuts in the U.S. Depending on what the Chinese finally do in the second half of the year around steel exports, that could be very promising for our metallurgical coal business.

And Ephrem, Cerrejon's been marked down to around 700 or so.

I have just one question on the cost savings program. You have probably been among the most restrained on spending among peers.

What gives you confidence that these deep cuts won't increase operating risks, especially for the assets that have faced quite a bit of challenges in the first half? And a follow-up on this one is, are there any restructuring costs or one-off costs associated with these savings?

Xavier will take the first one. I mean, I'll just quickly cover the second one.

The restructuring costs are not material at all. In some cases, there's -- there may be some people who are leaving and there'll be some sort of redundancy payments and things like that.

But those would be payments one would be making to -- and these people are not being replaced. Those are costs that would be paid out to people anyway.

So the friction costs of this are not material at all.

Thanks. To the first question.

There isn't really any material change to the operating risk in the business. What we've done is taken in the first principle a review of overheads and how the departments as such as Gary spoke through the merger of nickel and zinc departments, which in itself gives us synergies.

We looked at regional synergies as well for things like back office, the use of consultants, for example, and using more of our own resources to complete some of that work. None of these really introduce operating risk, per se, to the business.

It's about doing more with our existing resources. For each of the operations, what we've done and really paid a lot of attention to is what is required for that business to operate reliably, more than anything else, what is the purpose of worked and what is nice to have, that in itself has identified better ways of working and some of those synergies across operations that we've spoken about before.

None of which goes to the way we operate those businesses. It doesn't introduce operating risk in and of itself.

So we don't expect any negative downside from these cost savings that we've identified in this phase of the work.

I mean, on the contrary, some of the work on restructuring has been to refocus and reduce risk on those and sort of some of decluttering and moving custom processing under dedicated rules and projects team is also separate. I think it's...

Yes. I think harmonizing the operating model has been a key part of it, like you speak to in custom metallurgical assets, being able to leverage what scarce resources around processing capability, for example, these key mine planning technical capabilities, where those skills are located, how we assign ownership and accountability for the work.

All those ultimately serve to improve operating reliability.

Just a couple of questions. Firstly, just on the cobalt situation in the DRC on the ban.

If you can maybe just give us a sense of what you've assumed within your guidance in terms of sales versus production and what the potential impact could be if that ban is extended? And then just maybe a follow-up on the cost savings side.

The -- just how much of that is real cost savings? How much could be offset by inflation?

And I guess, if we look at, let's say, '27 numbers, is that -- if you do revenue minus EBITDA will that be $1 billion lower versus 2024? Just trying to get a sense of how much comes through in the unit costs and other segments.

Thanks, Ian. In terms of cobalt, we've been quite conservative in what we've assumed will get sold this year.

So we're still assuming, I think we've made a point summary that a significant portion remains sort of unsold because there's numerous sort of uncertainties around when, how and on what basis, that obviously plays out. And even in some of the payability assumptions and the like, we've been quite conservative in what we've -- what we built into some of those costs for the full year.

So even if we are unable to sell anything this year relative to numbers that we've given, it wouldn't be a material variance. But we've obviously had to make some assumption that some cobalt is going to flow, and I think that's reasonable.

But it's not material one way or another. I think it should present more sort of upside if there's able to -- depending on volumes that one's able to move at some point in time.

But it's not going to be material one way or another. In terms of your second question, was that just -- you -- in terms of these cost savings, you were saying, sorry, Ian, can you just repeat?

Yes. Just trying to get a sense of how much is it sort of real cost savings.

I mean how much of that is offset by inflation. I mean is it all coming through the sort of revenue minus EBITDA line?

Just will that be $1 billion lower in a couple of years' time versus 2024, which is the base?

Yes. Yes.

No, it will be a straight. So cost reduction through the various layers that we've given some sort of indication of what's at asset level, what's at asset, but in the kind of asset overhead that's set above the assets in terms of their regional models and sort of head office structures and support for the business around that.

There's some corporate as well. So yes, you'll see like-for-like.

Now some of that's already -- we've sort of spoken to at least 50% already being expected to come through in '25. I would say, sort of half of that is probably already baked into some of our unit cost numbers because it's already been achieved.

It's banked in, and it's now starting to be part of bottom-up submissions that people do every month as the numbers sort of come through. But most of it would then come through in '26 and will come at the end of the year again as we normally do, when we look at longer- term guidance, cost assumptions will then reflect that.

That's not to say there won't be some inflation and the likes on the other side that this will at least offset that part. But this will go sort of a long way to moving our costs in the right direction.

And you can see like our coking coal at the moment, we've actually got lower denominator, but still seeing absolute cost.

Yes.

Okay. Sorry, maybe just on the EVR sort of $9.50 per tonne sort of synergies from integration and the other cost savings on sort of deep dive operational benefits.

Does that all flow into this $1 billion number?

Some of it is in there, yes.

Just to follow on this cost saving program. Just to confirm, is this on a continuing basis, so it excludes any savings related to assets that have been or you're planning to sell, close or place on current maintenance?

That's correct. But disingenuous to -- Matt, but disingenuous to shut an asset and claim some savings.

So it's completely separate to that.

And then just on the buyback program and obviously being funded by asset disposals to date. Steve, you touched on the Bunge stock option, and I guess just following on from Liam's question.

Are there any further noncore assets such as infrastructure that the market is not placing any value on today that you could look to monetize to expand or extend the program?

It's a good point you actually raise. There is lots of banging down the door from different funds and the likes that would love to sort of bid and look at some infrastructure that we have within the business, and that would free up potentially capital.

And part of all that is to think about whether there's sort of cost of capital type arbitrages around those sort of businesses. We -- me and Gary were just in a meeting the other day where there was a lot of interest in these sort of things, and that should be something we want to look at quite seriously.

You need to sort of think about how that sort of interacts with flexibility of business and long-term planning and how that all kind of works going forward. But you are starting to see sort of more and more of these, and management team should be sort of open towards that.

So something like maybe the Collahuasi desal plant, just to throw something out there, may well sort of lend itself to sort of such a play potentially over time. I mean whether that's cash gets released or that itself funds the -- its future expansion, that's still unlocks and liberate sort of cash that otherwise would be able to go to shareholders.

So it is quite topical.

A couple of questions for me. One, would you be able to give some color on what you expect from the RIGI application process just in terms of the time line and then getting greenlighted and how important is for either of the projects of MARA, El Pachon in terms of the go forward there?

And then secondly, just quickly, any exposure to the COMEX collapse in copper earlier in July? And any implications for the marketing business in H2?

Thanks, Ben. On RIGI, the time line is in the near future.

We're sort of -- our application will be in the near future. It's a very -- for both of them.

We'll put them both in, most likely at the same time. We're working on them at the moment, and we're working closely with the Argentinian government to ensure that they meet all the various requirements and it's robust as it can be at this stage in the project.

Obviously, we're not at feasibility. We're not at a stage where we can be 100% comfortable with the kind of capital estimates that go into it, but we do have order of magnitude numbers and those need to go in.

. And so we're -- in terms of time line, that will go in, in the near future.

That gets then assessed by the Argentinian authorities. It takes them some time.

It's obviously quite a detailed document. And then we would look forward to an approval of that soon after they finish their reviews.

Once that's in place, then that allows us an extended period of some minimum spend, which is not regret capital or regret spend, it's spend that we would be spending anyway, and allow us to move into a position where we can FID these projects, and move ahead for construction and gives us certainty over the regulatory environment, the tax environment, the ability to distribute cash offshore, all those sorts of things for multi-decades as we operate these businesses. So very important for the business, not only from a financial perspective but from a regulatory and fiscal certainty perspective because that's key.

There's always been some nervousness around Argentina, but President Milei has done this very smartly where this protects investors beyond the current Milei administration going forward for those many decades. Look, we've operated successfully in Argentina without this before, but this obviously gives us a lot more certainty, a lot more protection and having some of the financial benefits of it is very important for us, particularly with the capital that we would commit to building these projects once we can get them to FID.

So very exciting, and the 2 projects we have in Argentina are really world-class. You've got, as I said, 250,000 tonnes copper equivalent out of MARA and up to 750,000 tonnes copper equivalent coming out of the full extended Pachon.

So there's 1 million tonnes alone, and that ignores some of the other copper projects around being the Collahuasi fourth line, being Mutanda, being New Range, being Coroccohuayco. So very exciting copper portfolio for us and Argentina and obviously, RIGI part of that as well.

With regards to the COMEX exposure, Look, that's an area where one has to be very careful around and we were very careful because we're not the kind of company that sits around and just takes a punch on whether we think tariffs will be 50%, 25% or 0. It's a fool's game to try and bet on what a politician will do or what it will be.

That's not how we position ourselves. We positioned ourselves around ensuring that we would be profitable around any outcome regardless of what the 232 showed.

We now know what it was, and we came out of it just fine.

I have 2 questions. So you completed your review of the primary listing and you're making no changes.

But did the former review make any conclusions with respect to the appropriate listing for your coal assets? And then my second question, if I look at the production profile, clearly very dependent on the copper ramp-up in the second half.

And the KCC guidance implies more than a 100% uplift in H2. Could you just maybe talk us through some of the key milestones at Katanga over the next 6 months?

And then can you give us maybe some comments around how -- what your level of confidence is that Katanga can stay at nameplate capacity on a sustainable basis?

Right. I'll let Xavier take the second question.

On the first question, no, we didn't do any work on the coal assets because, as you know, our original intention was to spin out our coal assets onto the U.S. exchange if it was something our shareholders wanted.

We consulted widely with our shareholders during the course of the first half of last year. And we concluded that -- and our shareholders concluded overwhelmingly that they wanted to keep the coal assets at that stage as part of Glencore.

Of course, we can always revisit that at some point in the future. But there was no point given the recent consultation with our shareholders, to be looking at what exchanges for our separate coal asset business as we have no intention at this stage to spin out our coal business.

Just on Katanga's second half production, you're right, in terms of step up that's required there. The first half was predominantly -- concentrate was predominantly fed of low-grade ore stocks.

Second half is predominantly fed off fresh ore from it. But we needed to access those 2 areas, as you recall, late last year, we had a geotechnical event in that pit, which we needed to remediate.

That deferred access to those ores, both of those blocks, Block 3 in the KOV pit -- Block 5 and Block 3 in [ Mutanda ] are both accessible now. They're currently being mined.

So the ore access required for H2 is largely in hand. As we feed those ores, obviously, the plant becomes bottlenecked for the second half of the year, principally the electro winning circuit.

We're quite confident we can make those numbers. We've done them before.

So we're not in uncharted territory over there. It's a step up and something that we need to manage on a daily basis, but the access to the ore is right in front of us, and the plant is performing well at this stage.

So reasonably confident. I think going forward in future periods, to sustain that level of throughput clearly requires us to continue the remediation of underground, and that works is underway at the moment.

And some of that land access long term, to just give more sense.

And do you think that throughput momentum that you're going to have in the second half of the year can be maintained into 2026?

Yes, absolutely. I think if you compare it to historical periods, the limit on that, other than land access, as Steve rightly said, has been on total material movement, our ability to actually move material in the pit.

And year-on-year, we are up 15% in terms of material moved in pit. So the performance in the first half of the year is not necessarily an reflection of poor performance.

What it is, is really accessing the ore bodies that present themselves in each of 2 open cuts. And we've seen, really a sustained performance in total material movements throughout each of the months this year.

So certainly not flash in the pan or benefiting from weather or anything like that. We have made significant leadership changes in structures, changes to structures within that business as well over the last 6 months.

We've got a revitalized leadership team there with a lot of focus, and we're seeing the fruits of that coming through in these results as well, A lot more focus on operating reliability than necessarily just metal, per se. Of course, metal is what pays the bills, but what we want to see is plan compliance and that focus on the basics, which is coming through now and that's what we expect to see going forward as well.

A couple of questions. Firstly, just on the industrial business, so I sort of count like 8 parts of the business where the CapEx is higher than the EBITDA.

And I appreciate that the -- that H1 is going to be less than H2 just in terms of volumes. But just on KCC or African Copper even, how should we think about margins going into the second half?

And should we expect that business to be cash flow positive in the second half or -- and into '26 or not? That's the first one.

You should expect it to be with those volumes at that cost structure, and these prices and margin, yes, it should be.

Okay. And Steve, sorry, if I can just push you, like the EBITDA margin, again, I appreciate H1 was softer, right?

But EBITDA margin, 5%, H1 '24, 11%, should we expect still like that kind of teens EBITDA margin? Or do we expect more -- again, I appreciate you can't export cobalt, so that's going to hurt you.

Well, I mean, there's a few factors need to go in favor of that tick up, which is obviously being able to move cobalt, cobalt pricing, which if you look on the screen today, it's not bad. Now where does it settle post quotas or bans, that remains to be seen.

So that will ultimately sort of feed into those numbers and getting up to this back above 200,000 tonnes of copper. And in the next sort of couple of years, I mean, part of our getting back over 900,000 and eventually towards sort of 1 million tonnes of sort of Katanga being back fully sort of annualizing 250,000 to 270,000 tonnes of copper at that level, it is -- it's generating quite significant -- I mean, it's not a massive CapEx program.

This asset has been well capitalized sort of over the years across the various phases it needs. Its cost structure is very heavily -- it's not really fixed, but it has a heavy cost structure it needs units to flow through and generate both cash and those margins to improve.

That's the sort of pathway which H2 should certainly see. And beyond that, you can sustainably performing at better levels.

It needs volume. Cobalt is a nice kicker of course, both in volume and pricing ultimately.

Two questions in keeping with the theme. The first is a fairly simple one.

The illustrative spot annualized free cash flow of $4 billion for the year, can you talk about what, by your definition, the free cash flow was for the first half results? And then the other question is a bit more broader and philosophic.

The new marketing range could benefit from tariffs and it could potentially benefit from a higher RMI run rate. Can you talk about the desire to increase RMI into the marketing range?

And maybe talk about do tariffs create arbitrage opportunities? Are they a true tailwind?

Sorry, what was the last part? Which arbitrage opportunities, Bob?

General, in a world of tariffs, are tariffs creating complexity in markets, does that create a tailwind for your marketing business?

Got it. All right.

I mean, I'll let Steve take the first. Let me take the second one quickly in terms of the new marketing range and even that last question.

Tariffs would create opportunities for us, provided that sort of -- as those tariffs are not changing every 2 days. We have seen the first half of the year where you had tariffs that were not really set for a long period of time.

But it does seem that the current administration or the current approach towards tariffs is that now that they're in place, there may be some changes here and there, but it does seem to be in place across the board. That does mean that various commodities and various trade routes will realign and arbitrage opportunities will come up, that one can then take advantage of in a bulk market that does take some time to capitalize on those opportunities.

So we do believe that in the current environment as tariffs remain, but things are less volatile around the moving of the tariffs, that there are some opportunities will come up in the second half of the year, which bodes well for our marketing business. With respect to the higher range and higher RMI, of course, I mean, to the extent that we can -- or non-RMI, to the extent that we can deploy capital into high IRR, very good return business that capitalizes on these volatile markets that allows us to be able to make good returns on that money, we would certainly deploy more capital into that, and that means it's an increase in non-RMI.

That's fine. We're happy to do that, to put our money where our mouth is and make those returns on that money.

That's what the job of the marketing department is to do.

Yes. I mean in terms of -- I mean under -- it's not under our definition, it can be anyone's definition.

I mean, our free cash flow in the first half was basically flat. And that does reflect -- I mean small amount of interest is more weighted towards first half and second half.

And you've got 2 contributing factors of H1 against a spot illustrative is very much in copper. At that sort of cost structure for that sort of volume going through, that was generating $1.1 billion.

Whereas we've got a $4 billion-plus business on an annualized basis, we expect that even more than half of that to then kick through in the second half as you sort of catch up and even get more tonnes proportionally second half over the first half. So H1 EBITDA industrial was $3.8 billion, spot illustrative $10.9 billion You can see the dissymmetry between those 2 and why you go flat to sort of $4 billion on an annualized basis.

Some of it was pricing, of course. Coal was more troughy in sort of H1 compared to a spot illustrative we just used the forward curve.

So we were 1.6 coal contribution in the first half. You've seen those prices drop 33% and 20-odd percent, respectively.

Averages were then on Newcastle was sort of 103. They're significantly higher than where they are at the moment.

So spot illustrative is 4.1 is on the combined coal business. So yes, flattish.

You can see FFO less CapEx was flat first half. And $4 billion now is illustrative annualized, second half should even be better than that on a divide by 2 because of the copper catch up in the second half of the year.

Just a couple of final ones. You've curtailed the Pasar smelter and potentially the Townsville smelter.

Can you give us an update on the Australian smelter? And also how much working capital is in both of these assets and is there potential to release that working capital as the assets are wind down?

I'll let Steve talk on the working capital. Pasar, as you know, is shut down.

That's fine. And we've announced the sale of that smelter to a local company.

Mount Isa, the smelter is actually in Mount Isa, the refinery is in Townsville. The Mount Isa smelter is cash negative at the moment.

We've been engaging with the Australian government, the federal government and the state government, the Queensland government for 6 months now. And we've had constructive engagement with them over the last little while.

We're meeting them again this week, and we hope to be in a position where we can work out a sensible path forward for Mount Isa and hopefully have a future for Mount Isa with everybody contributing towards a future for that smelter into the next few years.

I think it would be -- I mean, just on that note, I think it's premature to start thinking about anything around the sort of Isa processing complex, of course, if you have more smelting refinery, and you do tie up more working capital sort of in the business. But it sort of all hands on deck to see if we can keep that going for longer.

And at Pasar, have you released any working capital in that facility?

Yes. No, there was.

There was absolutely. It sort of went in Q1.

It started being phasing down first in stopping cathode, ultimately anode, and that's been all sort of wound back. And I mean, they did contribute to some RMI release during the period, yes.

And then just one more, if I could. You talked a lot about your project pipeline with your -- respect to the 2 most advanced projects, MARA and Coroccohuayco.

Can you give us an indicative time line on when you would expect FID for both projects based on the current time line that you see?

Daniel, the time line is dictated both by having the work and being ready for FID. Coroccohuayco comes first.

We probably would be in a position by second half of next year, and MARA, probably the year following that. But it's not only dictated by when it's really in terms of us taking to FID.

It's dictated by the market. Does the market need the material, will we get the returns that we want?

We see a pullback in the copper markets. There are some uncertainties and headwinds around global growth, and we want to ensure that we're bringing those tonnes into the market now.

I know it's not exact that you don't bring on a mine at the moment's notice and that you're not going to simply time it perfectly. But we want to have comfort that we continue to see the steady growth in demand for copper, that supply is struggling, and that we can feed into that continued supply deficit into a market where prices continue to improve.

And that's what we want to do. So we'll combine the 2, the timing of the FIDs and then bringing the production on with our views on when the market needs those tonnes.

Thanks very much for your participation today, for your questions. Great questions as always.

Martin and Steve and I and Xavier are around to answer further questions as we engage in the coming weeks and months ahead. And again, thanks very much for your time.