PT Vale Indonesia Tbk

Good morning, ladies and gentlemen. Thank you for those who joined us offline and online as well.

Welcome to PT Vale Indonesia 2025 earnings call for today. My name is Andaru Adi, and I will be the moderator of today's call.

So with me now, we have, I think, most of the C level or from our company, while some of them also joining online. So the meeting today will be started with a brief presentation by our Board and then follow up with the Q&A session.

So during this session, with all, we will share some key highlights about our company from 2025 and then also providing some 2026 outlook. And that includes any operational milestones, financials and updates on our growth projects.

Next one. Okay.

So today's agenda will be divided into 5 agendas. So number one, part 1 is 2025 challenges and our path forward will be presented by Pak Anto, our CEO; and then followed by a presentation from Pak [ Abu Ashar ], a bit on the sustainability.

And then part 2 and 3, the operational and growth project updates will be presented by Pak Asril. And then part 4 will be presented by our CFO, Pak Rizsky, terms of results.

And then part 5 will be presented again by our CEO, Pak Anto. Next one.

So just a reminder that this presentation and discussion comprise assumptions and forward-looking statements that involve risks and uncertainties. So in addition, all opinions and assumptions constitute our judgment and are subject to change without prior notice.

So please refer to all the cautionary note and disclaimer. Again, just a reminder, I encourage all of you to -- should you have any questions, just put it on the Q&A window, and then we can address those questions after the presentation.

So without further ado, I will now hand the session to Pak Bernardus Irmanto to begin today's presentation.

Yes. So thank you, Andaru.

Hi, everyone. Good morning.

So let me begin with a quick recap of 2025, a year where Vale demonstrated resilience, discipline and also execution despite the dynamic market environment. First of all, I think we successfully strengthened our operational foundation, delivering stable nickel matte production.

So we actually exceeded the target of nickel matte production last year, while maintaining one of the lowest unit cash costs in the past 4 years. If you remember, we started 2025 quite slowly.

We had a gap in our production that we catch up in the remaining months in 2025. So this reflects not only operational excellence, but also our ability to manage cost and condition.

At the same time, we diversified our revenue stream by introducing saprolite ore sales in Bahodopi, this is an important milestone that enhance margin flexibility and reduce reliance on single product line. So on top of Sorowako now, we have Bahodopi and Pomalaa as well.

So from the growth perspective, we made significant progress on our strategic progress, particularly in Pomalaa and Bahodopi, while also securing LTAB approval, ensuring continuity of mining operation. And importantly, we navigated operational challenges, including infrastructure disruption, as you know.

So last year, we experienced major challenges from oil pipeline leakage. So we're able to navigate through the challenges without compromising safety or business continuity.

So this highlights the strength of our system and leadership on the ground. So beyond financial and operational performance, we continue to advance our ESG leadership as well, receiving multiple international and national recognition and also progressing towards IRMA certification, so reinforcing our commitment to responsible mining.

So in short, 2025 was not just about performance. I think it was about building a stronger and more diversified and also future-ready platform for growth.

So I'll hand over to the next presenter. Thank you.

Yes. Thank you, Pak Anto, to start the description for today's meeting.

So please allow me to continue, everyone. So if we see from the sustainability aspect that PT Vale is still solid performance from the Sustainalytics achievement that put us as one of the lowest risk in our business, right?

So 23.7%, this is the lowest numbers that we achieved. And then also that if you see the key parameters, the key objective for the sustainability, right, for example, for the green GHG intensity as well as the SO2, which is keep premium below the target.

However, that if we see that SO2 sulfate dioxide that if we see now the dynamic of the sulfuric acid situation due to the crisis in the Middle East, this is our opportunities also that within this year that we keep remaining to put more operation in our efficient mode. So PT Vale is recognized also through several awards, especially through the Subroto Award, which is -- this is overall, including good mining practices in mine and mineral resources activity as well as for the social and then for the others like for the other work related to the sustainability that put PT Vale in the strong position on this.

And the next, as you see that IRMA 50 one of our journey as well that demonstrate the company's long-term commitment for the sustainability, how to be the right nickel producers. So 2026, we're continuing to follow up what become the recommendations from the auditors of the IRMA even though that we're still coordinating with them to get the complete report assessment from last year.

If you see the milestone that why IRMA is very important. This is one of the window for us how to strengthen our positions in this industry.

That's, I think, the highlight from my side, and then I hand it over to the next presentation.

Thank you. Good morning.

Can you hear me? Good morning, everyone.

Let me speak first from the safety performance. Nothing is more important than life.

That's the main value of all activities that we do in project and also in operations. The company continues to place operational safety and health its top priority throughout 2025, the company management, along with contractor and partners actively conduct field visits through the leadership in the field recall as well as the critical control verifications, more than 200 critical risks that daily that we visited and also having control over that.

This effort, strengthening operational disciplines, increased accountabilities and emphasize safety as a top priority of the company include operational as well as in the project activities. This discipline enabled the company to close 2025 without single fatalities.

These achievements reflect in the collective commitment of all company activities throughout safety management system. Next slide to the productions.

Okay. PT Vale delivered solid operational performance in 2025 with full year nickel matte production rising to 72.027 metric tons.

This marked encouraging increase from 71.3 in 2024. In a quarterly basis, that you can see also the production was only 17,000 metric tons, about 12% below Q3 2025.

This is mainly due to plans of the furnace rebuild that began in November 2025 and target to be completed by May 2026, which is months ahead. Compared with quarter 4 2024, when the production was 18.5 metric ton, output of the Q4 2025 is moderately lower, but yet in overall year, Full year production remained higher year-on-year that you can see in the results on the chart.

So in addition to our core nickel production, as mentioned by Pak Anto earlier, Vale continued to make steady progress in broadening the portfolio this year, which is through the sale of nickel saprolite from both Bahodopi and Pomalaa block. So ore sales reaching 2.3 million tons, which is about 60% actually above of the budgets.

That is mostly coming from the Bahodopi block and part of it, which is about 300,000 tons coming from Pomalaa block. Next slide, moving to the growth project.

2025 also marks an important milestone of PT Vale entering the new phase of business diversification through the sale of saprolite sales and also limonite sales that are going to be starting soon. So looking ahead, the company is sharpening the strategy focused through the development of mining project and downstream processing facilities collaboration with our JV partners in 3 areas.

I just recall back in our growth project, there are 3 areas, which is in Morowali, which is in Bahodopi block , Pomalaa and Sorowako limonite, while Tanamalia still in development phases that you can see in the pictures. We have started Phase 1 Pomalaa mining operations since July 2025, which is about 3 months ahead of the plan, resulting higher ore sales in year 2025 that mentioned earlier.

We now move into the Phase 2 of mining development in Bahodopi block, which is preparing of the limonite ore sale supply to each power plant in Sambalagi. The each power plant in Sambalagi also made a significant progress with a plan to have the first mechanical completions by Q4 2026.

Specifically in Pomalaa, our mining project has started now in mining operation in development of the infrastructure reaching 60%. But again, starting last year, October, we are starting mining through our partners.

And today that we are starting also selling our limonite to our APP for each power plant supply, which is we are planning to have first mechanical completion by Q3 2026. Sorowako limonite also having significant progresses in mining.

Now we are actually building our stockpile. We are stockpiling about 3 million ton limonite being secured in stockpile while JV site, the partners now is starting to construct FPP and slurry pipeline, while they are actually securing land acquisition in each area down in Malili.

So in addition to the discipline of the execution, we're also ensuring projects are executed efficiently. For mining project, the cost forecast approximately about 30% lower than the approved budget.

Again, all of the strategic initiatives continue to be executed with prudent financial disciplines, strong governance and unwavering commitment to long-term sustainability. The next slide is just showing some pictures.

If you go to the next slide, which is 3 areas, as I mentioned earlier, there are about 10,000 workforce now working in the ground. As of today, we are about reaching 40 million work hours without significant injury, which is, again, reflecting our discipline in execution and also our commitment to manage the project and operations safely.

Thank you. Back to Pak Kiki to deliver the finance thing.

Thank you.

Okay. Thank you, Pak Asril.

So I think I'll try to be brief since I think most of you already seen the financial results. Yes, I think as Pak Anto mentioned in the earlier section that 2025 was not an easy year as well, many challenges coming from not only operational, I think, in the beginning of the year, but also from a cost structure point of view, B40 being one of the aspects that was implemented last year.

I think in terms of pricing, you can see here that from an LME standpoint, from nickel pricing standpoint, it was even further challenging when compared to 2024. And the numbers that we presented here, so you see that despite those challenges, right, it is actually showing a stable and improvement when we compare to 2024.

And this is actually showing the resilience that was mentioned earlier. So production, we can see that from a year-on-year basis and especially when it comes to production, let us not forget that 2025, there was a period of 2 to 3 months of furnace rebuild.

We thankfully and safely managed to achieve an improvement when it is compared to 2024. And also it resulted in a higher revenue because of the higher production and shipment.

But also aside from that, payability plays a factor, which I think most of you have already noticed that starting in July of 2025, we started with a new payability of [indiscernible] and with a good cost discipline, we managed to book a UCC of sales of 9,339, which is a modest improvement when we compare to 2024. But see it from the perspective of this improvement is actually on top of the additional cost such as B40, such as the increase in royalty.

And of course, I think in terms of how we mitigate our safety and also operation in terms of OLE compensation -- OLE incident, we still manage to improve the cost base of the operating company. With that, we end up with a good EBITDA figure of 228 million, which is a 1% improvement against the previous year, which then trickled down to the net profit of the level of 76 million for 2025.

With this number, I think it's a relatively good performance. It reflects as well that from a cost avoidance point of view, it bears fruit that net profit can be higher as well, right?

And from a cash and cash equivalent, we managed to keep a good amount of cash to start the year of 2026. Next slide.

So yes, I think this is showing that we are ready for growth, right? So we ended the year with still a good amount of cash.

But I think one important point is that progress on the ground is looking good, which will come with a significant amount of CapEx and commitment going forward. So this is a bit of a guidance of how much CapEx that the company will be committing for the next 3 years.

And I think we were happy to announce that actually, as of today, we already have a standby facility to support this commitment going forward, which is a sustainability-linked loan with USD 500 million facility with a green shoe option of USD 250 million. I think you can see that from previous communication up until today, we've been executing the commitment.

And even previously, when we compare to the prior decisions, it has been actually quite faster. And like, for instance, the Bahodopi mine actually entered into commercial operation quickly compared to the previous investment decision.

And then I think Pomalaa also starting this year, we already showed the operation is actually on track. So hopefully, this commitment going forward will also show a good pipeline when it comes to execution.

I think that is all from my end. I will give it back to Pak Anto for 2026.

Yes. So moving into 2026, our strategy is quite clear and focused as well.

So one, definitely, we need to deliver the growth agenda. And as Pak Asril mentioned, Pomalaa, Bahodopi, Sorowako projects are all on track in terms of schedule as well as the cost and quality.

And second is maintaining discipline. And I think the third and the most important thing to me is really to unlock the profitability of the company.

So first, we remain committed to financial discipline while we are entering the investment intensive pace, Pak Kiki has mentioned about that one. So we are carefully balancing growth with resilience.

I think Sorowako as the backbone of the company, we still need to pay attention to it, supported by approximately and Pak Kiki has mentioned, right, so the sustainability linked loan that I just explained, which strengthened our funding visibility while aligning as well with the ESG target. It's something that we are quite proud of.

I think like probably of all the mining project in Indonesia, I think we are the first time to get the sustainability linked loan, which reflect also the trust from the lenders. Second, we are focused on scaling the production and diversifying revenue.

I think with dual operation coming online in Pomalaa and Bahodopi alongside our core Sorowako asset, we are building a multi-sources production base. I think it's going to be very good because we're not -- we are no longer depending on one sources.

We will have different sources as well. At the same time, our sales will continue to be meaningful contributors.

Hopefully, and I confident -- I'm confident that we can get the very efficient for Pomalaa and Bahodopi. So it's going to be -- again, I think it's going to be meaningful contribution for the company in 2026.

Third, we are accelerating downstream expansion. I think Pak Ashar mentioned about the Pomalaa.

The mechanical completion for Pomalaa is going to be in quarter 3, sometime in August. It's going to be another milestone for the company.

And in parallel, we are developing additional processing capability. So we -- I think it's not new.

We discussed about this one. We are assessing the possibility of actually capitalizing as well the ore that we have.

You heard about OSBF, for example. So if we can actually do the trial, which we expect to be happening very soon and it works, that's probably the option for us as well.

But we need to be mindful of the market situation as well. So finally, and most importantly, for investors, for analysts, we are sharpening our focus on profitability.

So unlocking the values and profitability of the company is our focus. Think through disciplined cost management and again, sourcing optimization, energy efficiency initiative, we have a crisis now, right?

The Middle East crisis is actually having impact on us. And I could confidently that probably among the other nickel producer because we have hydro plant, we are the most ready in anticipating the crisis.

And we are targeting a clear improvement in earnings starting from 2026 and forward. So all of these initiatives are anchored in one objective to position PT Vale for sustainable earnings growth and long-term value creation.

So we are not just growing, but we are growing strategically and also responsibly. So that's close my presentation.

Thank you.

Thank you Anto. Thank you [indiscernible], for the presentation.

So just to recap a bit, so year 2025 was solid, not only reflecting our company resiliency, but also at the same time, putting like a good foundation for future growth in the future. So I think next one, we'll have the Q&A session.

I will encourage all of you to ask. I'm going to give like the first opportunity to -- for those gentlemen and ladies who are attending offline.

[Operator Instructions].

Maybe my first question is on the cash cost. Is there any guidance for this year?

How much do you think the cost could increase from the current situations? And maybe on that cost part, have you started to see maybe some kind of [ negotiable ] power towards your mining contractor?

I think the last time I talked with one of the mining contractor business, they said they're starting to see some kind of price war within the mining contractors because they are trying to secure as much as volume related to the government's plan to cut the production volume for both nickel and coal.

Okay. So I think the first one...

Yes. So I think in terms of cash costs, so when we compare to last year, probably it's going to be a bit higher because, again, I think [indiscernible] being one of the main factors, right?

We expect, hopefully, anytime soon before May, we can complete that. But meaning that some portion of the matte production will be lower compared to last year, which will result in a bit of a higher cash cost.

But we see that probably within 10,000 is still going to be manageable, hopefully. And I think this is also related with how we can actually mitigate the situation of the current energy prices and also coal, which is showing a similar trend at this point in time, right?

But I think one important point that I would like to convey is that we're quite ready. I think [indiscernible] mentioned we're if not one of the most ready in terms of facing that situation, especially given that the hydro power plant that we have as a mix.

But on top of that, I think inventory management is also one of our strength. Like for instance, when it comes to sulfur, we have quite a good amount of inventory balance.

We have up until, I think, the end of third quarter or maybe the early of fourth quarter to start the year. So I would say that in that sense, security of supply in that sense as well in terms of inventory pricing should be reducing the pressure for the company to continuously produce nickel matte.

And on top of that, I think in terms of oil, in terms of coal as well, we also have a good amount and a week's of inventory balance. And also, since last year, we've been increasing the procurement category to actually support the competitiveness of our sources.

But for mining contractor, I think later on, maybe Ashar can further add. So I think there is actually quite a good amount of confidence level that -- we have a long-term contract, right?

It's a long-term contract, a big amount of tonnage that would be operated for the next 10 years. So what we see is that, of course, we have a room for negotiation.

What we see also, I think the coordination has been quite smooth for us with the mining contractors, both in Bahodopi and Pomalaa. And I truly agree that one of the most ready to capture volume should be on the contractor side as well.

So we will continuously have the discussion. And I think Ashar can later on mention that the cadence is also showing a good discussion with the management of the contractors as well.

Maybe Ashar, anything to add.

Okay. Just to add on that, thank you, Kiki, that we have very close collaborations and also coordination with -- among contractors with us, [indiscernible].

In terms of the contract, that we have rise and fall mechanisms in the contract sales that are quite fair for both actually PT Vale and also the contractors toward the cost of mining today. But for sure, despite that we have a rise and fall mechanism, we are actually discussing the impact of what's going on today, for both sides to have really close coordinations, how to tackle the situations, again, in terms of how to be more efficient in mining operation.

For example, that probably and something that we are following up is basically in the mining side mechanisms saying that, okay, let's do the mining, increase the volume, but reduce the distance, for example, and some improvement that has been made in mining operation as well as in the hauling and also in the planning as well. In terms of the volume, probably just a little bit on that actually because of today that we are having our caveat for sure for both Pomalaa and Bahodopi.

We're aiming to submit the revision one. But for sure, increasing volume with the current prices is one of our targets, again, to be more efficient in mining operation.

Today, it's still in the level of the good cost comparing with the margin that we are having today in mining. But for sure, it's really close coordination and cost control over the mining cost and operation.

Probably just a bit -- provide a bit flavor about the situation, right, that we are facing about the cost pressures. We don't know how long this is going to be happening, right?

So for PT Vale, I think the situation, yes, it is a risk. But I think we need to see the risk from the positive angle in the sense that, well, we have to refine everything about our operation as well.

So just to share some of the discussion and ongoing initiatives that we have. So one is about supply resilience, right?

So okay, the concern is about, okay, like we all talk about how high the price of oil and sulfur and coal going to be. But the more fundamental question is like, are they going to be available, right?

So affordability and price is real risk, right? So the more we can be less dependent on those commodity only better for us, right?

So we have actually started this. I mean, lucky enough that we have started some of the initiatives even before this happened.

For example, in our Sorowako operation, like we use sulfur as well for the nickel matte production in Sorowako. So we have done trial to replace sulfur with [ iron ], right?

So -- and that trial seems to be working quite well, right? So that's actually diversify the fleet -- the supply, the bulk that we need.

And then we are now coordinating with our buyer to ensure that the nickel matte produced using [indiscernible] is actually is also acceptable. But if it's actually working well, then it's actually oh, don't worry about sulfur, right?

So we have alternative. And the other point as well, like, okay, we also try to, again, reduce energy consumption, reduce the fuel consumption.

And you know that we have started the trial of electric truck. The other day, we have set a quite aggressive target, accelerating the adoption of EV as well.

The trial is happening, looks good, but it needs more time really to conclude. But I think 30% of the whole EV truck population by 2030, that's going to be our ambitious target, right, if not more.

Basically, it's actually limited as well by availability of the hydropower available for the truck, right? And then we try to replicate whether we can actually remove dryer whether we can actually go directly from the mining to kiln.

So a lot of initiatives that we are doing now. It's not going to be happening this year, but like some of the initiatives like the ore dewatering, we hope that ore dewatering is that which is, how to naturally drying the ore from the mining.

And if it actually works and we have done some trial if it works, it can actually reduce the moisture and reduce the oil consumption. So we want to actually reduce as much as possible to technically, practically possible our dependency into fuel, into coal, into sulfur.

And I think it is progressing well, and we made some commitment and it's going to be our legacy. This Board of Directors legacy, we can actually transform the Sorowako operation into less dependent into those 3 commodities.

And that's actually also increasing our resiliency to geopolitical risk.

Thank you Anto. Next person.

I have 3 questions. First of all, [ ACSP ] for your [indiscernible] is it already contracted or not?

And also for the unit cash cost in -- is about $18 per wet metric ton. Can we use this unit cash cost of sales for Pomalaa also in 2026?

And the third one is the construction for Pomalaa is still about 53% and your target is in Q3 2026. Is it achievable or not?

Sorry, can you repeat the third question?

Whether it's possible...

Okay. I'll try to answer the first, later pass the third.

So yes, I think the average selling price for Bahodopi and Pomalaa and whether it's already contracted or not. That's the first question, right?

Yes. So -- first of all, I would like to say, it's still a premium market.

So it's still a premium market that we're working. And especially when it comes to first quarter and then moving on to second quarter, it's showing a higher premium environment when compared to last year, right?

Unfortunately, I cannot mention specifically the pricing today because we haven't released the first quarter number. But I can safely say that there's quite a good amount of increase from the previous number that we showed for the average for 2025.

So yes, I think that's in terms of pricing of the ore. And whether it's contracted or not?

So I think -- so the total quota that we have as of today outside Sorowako is around 8.1 million. And we have some portion of maybe around 2 million for limonite.

So it's basically talking about the remaining 5 million to 6 million, right, of saprolite. We can safely say that majority from that portion have been contracted.

What we see is that it's actually a good timing from a risk mitigation point of view, also it's a good timing for us to lock the good pricing environment. I think there's -- of course, there's an opportunity, but there's also a risk that we need to see, right, when it comes to pricing.

So a big portion, I would say, out of the saprolite that we have been contracted up until the second half of the year. And for the second question, $18 cash cost, right, including royalties for Bahodopi, whether we can use that for Pomalaa or not, conservatively, yes, you can use that.

But when it comes to Pomalaa, actually, it's a larger scale. So scale and efficiency, meaning that there is actually an upside towards the lower scale of business, right?

What I'm saying is there is an opportunity for it to become lower than $18 for Pomalaa. But yes, I think conservatively, you can use that as a base for Pomalaa.

Ashar, I think for the third question.

Yes. If you understood correctly about the Pomalaa project for both mining and JV, even though that the progress of mining is reaching only 60%, but we have actually 2 milestones.

The first milestone that's mentioned here is 60% of the overall project. The second milestone is about our delivery or operation delivery.

As I mentioned in the project presentation, we started the mining operation in Pomalaa since last year, October. And today, we are starting delivery the ore, [indiscernible] limonite.

And also -- we're just starting also last week ago of delivering also the saprolite. Now we're preparing to deliver saprolite to the port.

We are aiming to start in April. So having said that, in mining, I can say that we are ready to supply of our each power plant in Pomalaa.

In each saprolite, again, this is 50% or 60% is reflecting the overall progress. Just also to recall back again, our partners starting the construction in Pomalaa is just effectively last year, February 2025.

So within this year, within February to February, 1 year, is reaching 60% is quite significant progress quite fast. So when we see things in the ground today, we strongly believe that [ P3 ] is really achievable.

And now today, they are starting to testing some of facilities include the each power plant, [ HPPs ] pipeline already being installed and also LNG plant that's already starting to be commissioning today called commissioning. So those are physical construction in the ground make us believe that the plan that we are putting there, actually 3 months ahead of the plan is achievable.

Yes. Maybe just to add, right?

So I think the remaining work to be done is actually installing the autoclave, right? And the autoclave actually arrived already on site.

So by quarter 3, the first autoclave is going to be installed done, right? So first mechanical conversion is one, autoclave.

Subsequently, the other autoclave will be installed. So by quarter 1 next [indiscernible] installed already.

So the first mechanical conversion is one autoclave and subsequent months, like the other autoclave is going to be installed. So hopefully, quarter 1, 2027, the whole pipeline is going to be in place.

How big is the energy cost for the total cost and how long the -- I mean, how long the inventory [indiscernible] like 2 months or how many months?

Yes. So I think for energy, energy mix, it's still the same, right, with the previous year.

And you're referring to the nickel matte. Yes.

So it's 30% to 40% for energy mix. But again, when we talk about 30% to 40%, there's a portion of hydro to that as well, right?

But in terms of inventory, so I think this is one of the good legacy, I would say, that [ Malili ] have been providing us when it comes to BCP, business continuity, right? So we've been comparing our inventory balance, and we have around 2 months, which is quite good when compared to the average industry.

And you can see the sulfur, sulfur 33 weeks -- 35 or 33 weeks of inventory balance 5 weeks...

Until September.

So we can say that up until the end of September or the month of October, we can still use the inventory that we've been carrying out from last year, right? I think one of it -- but I think, yes, one of the stress point is actually what [ Pak Ashar ] mentioned before, to reduce consumption for the drying and the kiln so that going forward, we can actually reduce the dependency for suppliers.

If for example, the [indiscernible] works well for sulfur and the sulfur consumption is actually going down and it's probably safe until the end of the year, right? So it's the balance.

And even that we established the ad hoc committee who are looking -- closely monitor the current situation, right, even though that we have good inventory, but our team continues to close monitor the situation then bring us day-to-day, daily or weekly [indiscernible] details.

Okay. Probably before going to, I think we need to look at the online questions.

So we have the first question coming from [indiscernible]. So can the management give some color regarding the forum for Bahodopi and Pomalaa for this year, considering the [ BRKB ] this year?

Any strategy to...

Yes. I think I just mentioned, right?

So what has been approved for Pomalaa that is about 8 million, right? And one of the strategies definitely is to optimize the 8 million, right, showing that we actually are able to actually to produce as what approved.

I think the problem for last year, I think the government also learned that there are so much being approved, but the actual production is not that much, right? So well, that means that some of the miner didn't produce as what has been approved, right?

So one of the strategy is really to show the government that, yes, we can actually do what we propose. That's one, right?

So we want to optimize that up to June, July, right? And secondly, remember that we have a commitment to our partners, to our JV, right, to supply the limonite [indiscernible], right?

So we will -- and we are now engaging the government, the [ SJM ] basically to show them that the progress of the project is there, right? It's almost there.

And the ore needs to be stocked out already, right? So it's not only about we are actually trying to monetize the ore, but we are actually fulfilling our commitment to our partners.

And by the way, the commitment is actually mandated by the government as well, right, under IEPK, right? So we want to continue -- and we actually -- as we speak now, we're preparing all of the revision already.

So we prepare all the data. We actually informally also consult to [ SJM ] whether the data is enough or not.

So hoping that by the time the window open, we are ready because all of the data are ready and they already understand the data. So hopefully, that it can be done quickly.

So there are several possibilities. And I think the government -- SJM, is also preparing some regulation related to that, whether it's going to be reviewed quarterly.

For example, we heard about that one. If we refer to the regular -- like the normal regulation, the window for the RKAB revision is going to be in July, right?

But that's the normal one. But facing the situation today, uncertainty, I think they are preparing and reviewing the total RKAB quota realization quarterly.

For example, some miner would not produce as much, then they will reallocate to the others. Probably that's the idea.

And then also looking at the market dynamics, and probably the possibilities to increase the quota and so on and so forth. So we are closely engaging the government.

But at the same time, we're also showing them that we are able to deliver what we propose. We have a commitment to fulfill and then we are ready, best way to execute.

So that's more or less the strategy or the approach.

Sorry, I have to move to another, sorry for all that I need to move with the stakeholders that they came from [indiscernible]. This is -- So next question, we also have like coming from participant.

So the question is related to HPAL utilization rate for this year. So could probably management provide some guidance regarding the HPAL utilization rate for this year, considering the -- for HPAL will start in operation in quarter 3.

Probably that's something that...

I think I can answer. But basically, I think I have mentioned, right?

So it's going to be -- in terms of mechanical completion, it's going to be gradual from first mechanical completion for one autoclave under quick mechanical completion. I think as per now, there's no plan to reduce the -- okay, to reduce the ramping up, right.

So we will still actually doing the ramping up as we planned before. I think specifically for sulfur, I think the HPAL, what HPAL mean for leaching is sulfuric acid.

It's not sulfur per se, right. But sulfuric acid can be produced.

I think Vinicius is here. Vinicius just educated me about the sulfur market.

He went to Bali for the conference specifically for sulfur. So Vinicius, you can add, right?

So the sulfuric acid can be produced from sulfur, and that's what a lot of the asphalt producers actually doing. They buy sulfur, they burn sulfur, they produce sulfuric acid.

But sulfuric acid can be produced from other sources as well. So sulfuric acid is not as bad as sulfur per se, right?

Because there are many different sources of sulfuric acid. And you know China, right?

So when it happened, they have already things beyond what we possibly think. So they are actually looking for alternative sources.

Vinicius tell me about, they're actually building now from phosphogypsum, right? So it's actually the solid waste from phosphate right, from the fertilizer production.

And they actually produce sulfuric acid from them. So they're so creative, so innovative in actually capturing any values from that.

But again, I think Vinicius, you can add, but we are not actually revising the ramping up plan. So once actually done, it's all, then we will be ramping up as per plan.

But Vinicius, please, if you can add.

Yes. So we say that sulfur now it's like sulfur price is the new normal because we saw a lot of refineries in the Middle East that was bombed.

So the supply was deeply affected. So -- but as Anto said, the Chinese are coming with R&D because most of the sulfur come from oil, gas.

So they are now bringing optionalities to bring sulfur from other like gypsum, like pyrites and like tailings as well. So we will see in the midterm, I would say, 6 months to 1 year, Chinese bringing -- when I say Chinese, our partners bringing options like pyrite -- pyrite, you can produce sulfur, but gypsum is something new.

And in this seminar, I saw there companies already building sulfuric acid production from gypsum. Gypsum is commonly found in Indonesian, everywhere.

So -- and that's the trend. So we have sulfate or sulfur and a lot of other elements rather than the oil, and we will see this coming as an option.

So in average, what the Chinese producers are trying to do is to circulate more, recycle more the sulfur to buy less sulfur from Middle East and less -- and have less dependency on this market. So they so far are confident that for our 2 JVs that will ramp up this year, we still have time to build our, let's say, optionalities to the sulfur from Middle East, like I said, pyrite, like gypsum tailings.

So that we're going to see, which is good. It's like COVID -- when COVID come, online meetings suddenly come.

So we will see production of sulfuric acid from other source rather than oil, which was a good push from this war.

Yes. And I think you told me as well, longer term, they might replace sulfuric acid with other acid for the leaching, right?

So it's hydrochloric. That's another option for the leaching, but it's probably more mid to longer term.

They need to study that. They have to do some research on that.

And I tell is much more easier to produce compared to sulfuric acid. Hydrocarbon can be produced from seawater.

So the new -- let's say, the new generation of HPAL, let's say, 2 years ahead, we will see is less dependent on the asset from sulfuric and more from other kind of assets because what you need is to change the pH coming from hydrochloride, which is one option, which is from the sea. So yes, good that R&D is moving fast.

And we can see that this is putting us some optionalities, not competing with fertilizer, food, which will be really tough if we put this side.

Okay. Ashar, you want to add something or...

Just to add on the HPAL, actually, again, what Anto said, basically, the plan is to have first [indiscernible] completion by September. So one by one.

So we have 5 autoclaves, September, October, November, December and January. So by January or Q1 2027, we are aiming to have full production each in Pomalaa.

Thank you, Pak Ashar. Okay.

So I think next [ Cynthia ].

I just have one follow-up question when we're talking about the revision window for RKAB. So I understand that the quarterly review period is probably something that we can expect for like next year or the next 2 years.

But for this year, have you been hearing the window for the revision to be accelerated to maybe like April or sometime earlier than June or July? That's my first question.

And my second question is, how flexible is your mix of -- between saprolite and limonite for this year out of the 8 million tons that you have gotten the RKAB before. Say, the government suddenly releases like a new [ HPM or HPAL ] and then they consider like cobalt contents whatsoever.

Will you be flexible enough to say like move some of your production to limonite since you have interest to stockpile for your HPAL and you have a higher ASP for limonite by then? Or how flexible is it the mix between those 2?

I think as I mentioned, right, there's a possibility for the revision window to be earlier than June and July. That's what we are discussing, and we try to approach -- try to also consult with the government to be able to do that because otherwise, if everyone is actually submitting their revision, and I do believe there will be a lot of companies submitting their revision on June and July, it's going to be complicated because the approval is going to be closer to the end of the year, right?

So that's the issue. And I can see that possibility is there.

But okay, what happened? Is there any flexibility?

The mining plan, basically for Pomalaa and Bahodopi, right, the way we define the mining plan is really to supply the HPAL, right? So that's the main focus.

Unfortunately, the saprolite is kind of seen or considered as a byproduct of limonite, right? Because again, I think the main purpose is really to supply the limonite into HPAL.

And then that's what we are focusing. But again, I think things might change, but it's not as easy as just flip, okay, let's now increasing this and reaching this because it requires a lot of recalculation, a lot of consideration as well on the ground.

But probably Pak Ashar, you can add to that.

Yes. Just to add on that Anto, that again, RKAB is -- the basis of RKAB is feasibility studies that we have to submit it and approved by MMR as well.

So in terms of the flexibility, again, we are actually looking for the -- again, the demand of our partner for sure that basically, as I mentioned, that in Pomalaa is much more advanced comparing with Bahodopi, for example. So we are actually focusing on developing mining specific in limonite in Pomalaa today.

But we should not forget also Bahodopi because we have also partnered that, again, as I said earlier, that they plan to have mechanical completion by Q4 2026. So we have to balance on that too.

And also, again, because the higher price for sure today is in the saprolite side. So again, when we're mining saprolite, we're mining limonite.

So balancing in operations, okay? The planning in mining, again, as I said also that we need to see and control the cost in mining for both and comparing the demand.

We are actually playing on that for sure. And at the end of the day, it's subject to RKAB.

The windows, as Pak Anto said, there are some opportunities probably earlier that we are now having some -- the flexibility actually in the planning. But again, considering all of those factors that I mentioned earlier.

For example, give an example that -- let's say, we are delaying a little bit in Sambalagi. So we are probably shifting a little bit more in saprolite and stockpiling more in limonite, okay?

So those are -- we are playing on that. But again, our reference always be at maximum level in the feasibility studies as reference of RKAB submission.

But is it true that -- I understand your first half will be majority saprolite, but if we are targeting for mechanical completion of the HPAL by third Q, 4Q this year, is there any like comfortable level of inventory you need to have at your HPAL to start the -- running the HPAL? I mean, say you don't have any revision for the second half, you cannot mine like limonite for your HPAL.

What will happen then?

Asril, probably...

Yes, I can answer that. I can say that when we see -- for sure today, when we see the target trend that's given to us from our partner, for example, Pomalaa, the demand for this year is about 8 million to 11 million tons of limonite, okay?

So -- and therefore, that in mining and also in HPAL plant that also we are also building a big huge stockpile, okay? So this is for preparation for us to be more flexible in the mining operation also to supply to our partners.

okay? So let's say that we are fulfilling their commitment to build and the mechanical completion and they have to go that way.

For sure, we have to mine more, okay, according to the plan. In our FS today, in our feasibility studies today in Pomalaa, we are actually 30% higher than the demand of limonite, okay?

So we have flexibility to go on budget or we go beyond, again, depending on the stockpile, as I mentioned, okay? So on that sense, again, we're much more flexible today as we speak.

But again, this is subject to RKAB approval later on. Hopefully, this answers your question.

Thank you Asril. Anyone else from...

Regarding the Pomalaa in the last -- because you have the option to own 30% in [indiscernible], when will be [indiscernible] it will start to operate? Are you waiting for it to be EBITDA positive?

Or what is the consideration for them? And also maybe on the royalty side, we heard that there is another royalty hike because of government -- some [indiscernible].

Yes. Okay.

So the first question is about when we will start the call option, right? So ideally, again, before entering into the call option, definitely, there will be a due diligence process, right?

And when it comes to due diligence, it's not only covering the financial result, which is, as you said, positive numbers, the EBITDA profit, but also it's about specification and also reliability, right? So most definitely, it would be post the mechanical completion of all the autoclaves, right?

So the third quarter, sometime in August, September, it's probably going to be the first autoclave and then gradually up until the end of the year, we'll complete all of the 5, right? So it will be a 2027 execution.

I think it was actually also reflected in the previous CapEx guidance as part of the 2027 equity injection. I think that -- hopefully, that answers the first question.

For the second question on the royalty hike. From what we understand, I think there are 2 significant review at least from the government that is still ongoing.

The first one is the [indiscernible] of the ore. And the second one is an increase in royalty.

Hopefully, this is true, but what we understand is that one of it is actually coming out to the market, and the other one is actually not going to be as an addition. So what we've been hearing the debate is actually of which part that is going to be -- which initiative and/or regulation is going to be out to the market.

We haven't heard any formal announcement yet, but I think looking at the news, same as you guys, you can see that I think the pricing is currently being more aggressively announced, probably testing the market as well. So hopefully, that is actually going to be the case with the new regulation.

Just a few questions from my end. I think the first one is with regards to the oil leakage.

Any kind of numbers that we should be expecting at least for this year? Or has everything has been completed by 4Q '25 last year?

Second, I think with regards to the mining cash cost, I think $18 has been mentioned quite extensively this time. But given the recent fuel price hike itself, what kind of reasonable numbers that I should be expecting to be going on this?

And lastly, I think just a few updates on Tanamalia.

Okay. I think later on, Ashar can help the third question for Tanamalia.

So maybe the third question first before you take off.

Status of Tanamalia project...

Sorry, just to understand better, it's about Tanamalia project, right, the progress?

Yes.

Yes. As I mentioned also that we are still in the developing stages in Tanamalia.

Today, our team is working in the field 2, while we are actually working with external team with [indiscernible] team for our plan to get into the area to start drilling for 2 as well, okay? While I think from a partner point of view, we are in progressing also to select the partners.

Probably later Rizky can explain the latest status. But I think we are very close to that partner selections.

So I'll continue with the first question, which is oil link, right? So I think if you noticed in the financial report, the audited financial report that we disclosed, there was a rehabilitation cost section in that, and it showed quite a good increase [indiscernible] 2024.

That number, that increase is actually not an actual number, but also a provisional number, right? So I think what we can safely say is that, first of all, a majority of the portion, be it from a compensation point of view, be it from infrastructure upgrade or enhancement point of view, the costs have been majority deployed in 2025 with some provisional numbers that have been provisioned in 2025 as well.

Of course, there is possibility, some additional number, but it wouldn't be as significant as what was in 2025. And I think on top of that, what we would like to mention is that we have an insurance claim that is ongoing as well.

So as of 2025, it was only a minority portion that was actually claimed. So I think there will be actually a contracting to the cost that have been incurring in 2025 in relation to [ O&E ] compensation.

For the second question, I think it was the fuel price impact to cost, which is especially for the mining contractor side. So it's going to be hard, of course, to provide sensitivity and how it will be directly impacted the rise and fall.

And there will be a negotiation process to that as well, right? But I think there is a counter effect when it comes to the existing cost base.

When we see the $18 that we have today, it's only a small portion that we would and then comes scale, right, because there's a fixed portion and a variable portion. So there is room for $18 to actually improve.

What I'm trying to emphasize is that probably using a base case of $18 would still be relevant and hoping that we can absorb any possibility of rise and fall in the contractor costs.

Thank you Pak Kiki. I think last question from the online participant [indiscernible] commercial.

So do you have the scope to renegotiate nickel matte ability given the higher current market levels versus your contract?

It depends, right? So of course, when it comes to significant market change, then there is an avenue for that, right?

And I think not only on price, but also on volume, right? It's also talking about availability of supply of commodities, right?

So yes, if there is a significant change in market situation, we actually have that avenue. So -- but I think the main hope is actually for this not to be prolonged, right?

I think that it's a reasonable contract that we have with the buyer. So if such situation actually get worsen, then definitely, there is an avenue for that.

But hopefully, anytime soon, the situation can be resolved.

Okay. Final one for the offline participant.

I just want to try to understand how the mining practice is on the ground. You mentioned earlier that today's -- sorry, this year's production target is 8.1 million.

Is it possible for you, say, to take more ores and put it as kind of like inventory so that by the time you get the approval for [indiscernible] revisions on the second half, you can actually start to accelerate all the process because considering that it is the government 3 months to approve this time around?

Good question. I think [indiscernible] still on?

Sorry, can you repeat the last part of the question because I lost...

Yes, I just want to try to understand how the mining practice is coming from. Is it possible for you, say, to take more ores beyond the 8.1 million target during the first half?

Yes. Actually -- thank you so much.

Actually, we have our own strategy. The aim for us is to improve -- to increase our inventory.

The inventory can be 2, right? The inventory can be above ground or below ground.

What I'm saying below ground is in the mining, which is we are actually preparing the stripping -- more stripping opening area. So whenever we ready get more, we get more, for example, then we can go immediately to mine.

Today, in Pomalaa and Bahodopi, our mining fleet is still in the full production target, not in the approved RKAB. So basically, we are ready.

We are not necessary to mobilize more equipment [ leaders. ] The same saying, they are actually, today, job is to open more phase ready to go when we get more, what we call it, get more RKAB.

At the same time, as I said, above the ground, also preparing huge -- especially in Pomalaa, huge stockpile available. So we put there actually.

We -- actually, today, we consider, to be honest, in Sorowako, limonite is basically waste. So we are actually putting into the stockpile and ready to go also when we get more quota RKAB.

And the third one, I don't know if this is mentioned earlier. Our mining in Pomalaa and Bahodopi in our mining plan and life of mine is -- the grade is about 1.7, 1.8, 1.6.

Actually, market today is -- demand is about 1.5%, for example. So meaning we can get more volume actually if we're blending in more.

So then we can mine the transition zone between limonite and saprolite, right? So we can get more volume actually there when we're mining both saprolite and limonite.

So those are the strategies, as I said, resources is enough to do the work. We open more phase ready to go.

Again, with the aim, we play together that to get more quota according to the budget that we are going to submit in the near future, okay? Thank you.

Hopefully, this answers your question.

Okay. I think that will be our last questions.

Thank you very much, everyone, for attending the conference call. Hope to see you in the near future for our first quarter earnings call.

Thank you very much.