Thungela Resources Limited

Good day, everyone, and welcome to Tungela's 2025 Annual Results Presentation. I'm Hugo Noons, Head of Investor Relations, and I'd like to take a couple of minutes to introduce today's agenda and to explain how the day will run. But first, allow me to draw your attention to a couple of disclaimers ahead of today's presentation. While you take a moment to read through the cautionary statement, we will start with the CEO, Moses Madondo. who will provide an update on the execution of our strategic priorities to get us 2025 highlights and a market update. Thereafter, the CFO, Dion Smith, will take us through the financial and operational results for 2025, and Moses will then conclude the presentation. This will be followed by a Q&A session, following which today's call will end. Turning to Q&A, for those wishing to ask questions directly, we ask that you please join the session using the conference call provided, as we can only take direct questions through this facility. In order to ask a question during the Q&A session, please dial star 1 on your keypad, and this will register your intention to ask a question. Once a Q&A session starts, the operator will then open your line and ask you to go ahead with your question. For those joining via the webinar, you will have the opportunity to submit you'll submit questions via text. Today, I'm pleased to introduce our new Chief Executive Officer, Moses Madondo, who brings deep operational experience and a strong track record in mining. Now, please allow me to hand over to Moses.

Thank you, Hugo, and good day to everyone on the call. Let me start with a matter that is affecting us all at Tungela, our concern for colleagues in Dubai. Events that have unfolded in the Middle East have understandably caused concern, not only because of the implications for the world economy, but primarily for the human impact. We are actively supporting our colleagues in Dubai, prioritizing their safety and well-being, and staying close to them every step of the way. Our stakeholders can be assured that as we continue to support our teams through this difficult time, we have the necessary business continuity plans in place and continue to closely monitor the situation. As the new CEO of Tungela, I am pleased to share with you the 2025 results. Reflecting on my time since joining Tungela, I am excited at the future prospects of the business. I've been inspired by the people, the business capabilities, and the strong culture within the organization Moving on to strategy execution, we have remained committed to the strategic objectives and have delivered a strong set of operational results. These strategic pillars have served us well and remain core to our purpose. As we look to build the future from the solid foundation already formed, I'm working with the board as we determine the next chapter for Tungela's journey. We are committed to the safety of our people. Safety remains at the core of everything we do, guided by a zero harm mindset, ensuring that our people return from work safe and healthy each day. I'm pleased to report that we have operated a fatality-free business for three consecutive years. We will continue to maximize value from our assets and derive value from the resource endowment. A number of steps have been taken to create a longer life business, and we have now completed two key life extension projects, the Aniya Colliery, previously known as the Elders Project, and Zibulo North Shaft, as well as increase the Tungela ownership of the ancient mine. in Australia, 200%. The capital allocation framework remains central to the strategy, and we will maintain this disciplined approach. I am pleased to announce that the board has declared a dividend for a ninth consecutive period, showcasing our focus on delivering returns to shareholders and creating long-term sustainable value for stakeholders. Let me now turn to the group highlights for 2025. The group recorded 17.8 million tons of export saleable production, exceeding the guidance range in South Africa, and landing at the upper end of the range at Anshim. This is on the back of a strong performance at Mafube, the ramp up at Ania, as well as overcoming the challenging geological conditions experienced in the first half of the year at Anshim. We achieved export equity sales of 17.8 million tons, up from 16.6 million tons in 2024, mainly as a result of high export saleable production in South Africa, which was further enabled by the improved TFR performance. The 2025 financial results were impacted by lower thermal coal prices in South Africa and Australia, where benchmark prices were significantly lower year on year, approximately 15% and 22% respectively. The financial results were further impacted by the effects of the weaker US dollar and a stronger rent. The group incurred a loss per share of 54 rand and 64 cents in 2025. This reflects the lower price exchange rate volatility and includes a non-cash impairment loss of 8.8 billion rand. The impairment loss is as a result of the lower benchmark call price assumptions and exchange rate forecasts. The group's dividend policy is to distribute a minimum of 30% of adjusted operating free cash flow. In the first half of the year, we generated adjusted operating free cash flow of R484 million. However, in the second half of the year, we incurred a negative adjusted operating free cash flow of R88 million. As a result, the board exercised discretion in determining an appropriate ordinary cash dividend. The board remains committed to prioritizing shareholder returns where the balance sheet allows for it and where the future prospects of the business remain supportive of a distribution. Accordingly, the board has approved a final dividend of two rand per share or 281 million rand. Together with the interim dividend of R281 million and the R139 million share buyback completed following the interim results, this brings the total shareholder returns relating to 2025 performance to R701 million, representing 177% of adjusted operating free cash flow for the year. Let me turn to safety. Our unwavering zero harm mindset is guided by three critical focus areas, effective risk and work management, doing the basics right, as well as driving a strong safety culture. The group's total recordable case frequency rate increased to 2.83, primarily due to the challenging operating environment during the production footprint transition. During the year, Hoodworp North ramped down and Issy-Bonella transitioned to care and maintenance. While we continue to ramp up efforts at ANEA and completed the Zebulon North Shafter project. Now, to improve our safety performance, we implemented targeted interventions for the increased risk areas and work crews through an innovative leading indicator safety HIPMED program. I'm happy with the improvements we have made. And yes, we still have work to do to further entrench the zero harm mindset in the business. Moving on to our ESG aspirations, we are committed to driving long lasting social impact, fostering community partnerships and responsible environmental stewardship. We are very pleased that we have achieved zero reportable environmental incidents in 2025, the first time since our listing in 2021. Socio-economic development investments remain integral to our purpose. The Tungela Education Initiative and the Enterprise Supplier Development Program to Tugani continue to deliver measurable and meaningful benefits to schools and suppliers within host communities. At schools, we are strengthening the school leadership, enhancing teaching, and providing learner support. Together, these programs demonstrate our dedication to creating long-term sustainable value for stakeholders and helping to build communities that thrive beyond the life of our minds. Now earlier I touched on TFR's performance. In 2025, TFR's rail performance increased by 9% to 56.8 million tons. This reflects the benefits of ongoing efforts to improve rolling stock availability and strengthen network reliability through various initiatives enabled by collaborative efforts by industry and TFR. Looking ahead, we expect further improvements in performance as these initiatives continue to bear fruit. We are encouraged by the Department of Transport's rail reform program and the facilitation of private sector participation to further improve logistics performance. Strengthening the coal logistics system benefits the broader industry, supporting both established producers and emerging participants while reinforcing Tungela's position in the global coal markets. The seaborne thermal coal market remained depressed for much of the year, largely due to weak demand in key coal consuming countries. In China and India, seaborne demand fell short of expectations as both countries continued to expand or sustain domestic production and accelerate investment in alternative energy sources. India and China's production grew modestly, while Japan, Korea and Taiwan increased their consumption of gas and nuclear power, which further reduced coal imports. On the supply side, The sustained production levels from Indonesia, Australia, and South Africa from late 2024 and throughout 2025 created an oversupply imbalance, which the market could not fully absorb. In recent months, however, restocking activity in the major import hubs, combined with a pickup in the Indian sponge iron market, has provided price support for the higher CV South African coal, which provides us with a competitive advantage. The weak market conditions, as well as the impact of linear discounts relating to the qualities we produced and sold, widened the discount in South Africa to 16.6%. While at Ensham, we achieved a marginal discount of 0.4%, primarily due to a higher proportion of fixed price agreements concluded on a favorable terms that mitigated the effect of declining prices over the period. We, however, remain confident in the long-term fundamentals of coal in the energy mix. In developing economies, the starting point is energy security. Without reliable, affordable energy, industrialization, job creation, and economic growth simply do not happen. Coal continues to provide firm and dependable baseload power at scale, which renewables cannot yet deliver reliably or affordably in most emerging markets. Coal also underpins critical industries, such as steel, cement, and manufacturing, which are foundational for infrastructure development and economic growth. From a socioeconomic perspective, coal supports millions of direct and indirect jobs, sustains local economies, and contributes materially to export revenues and fiscal stability. Therefore, companies with high quality coal operations like Tunggala have a significant structural advantage in this market. The medium-term outlook for thermal coal reflects a market transitioning into a structural plateau, largely due to the continuing shift in demand by emerging markets in Asia, coupled by potential supply-side interventions that we have seen from Indonesia. The recent escalation of the conflict in the Middle East provides evidence of how finely balanced the market is today. The disruptions in the flow of oil and gas in the region have again increased energy security fears and pushed up the prices of oil, gas, and coal. While coal's contribution to energy security remains evident, The outlook is increasingly influenced by volatile geopolitical conditions and evolving market pressures. Now let me hand over to Dion to cover the financial results for us.

Dion. Thank you, Moses, and to those online for making the time to dial into our results presentation for the year ended 31 December 2025. While production and cost performance were solid, it has been a challenging year from a market perspective, with materially lower benchmark coal prices and a stronger rent placing pressure on both revenue and margins. Despite this, we continue to invest in the business in line with our capital allocation approach, and benefited from strong cash flows from operations. In the next couple of slides, I will cover the key financial metrics for the year, unpack the major drivers behind the year-on-year movements, and close with a net cash position, as well as share all their returns. Let's turn to the results. Adjusted EBITDA for the year was 1.2 billion rand, reflecting the impact of materially lower benchmark coal prices and the stronger rand against the US dollar. Despite these headwinds, the operations remained resilient with positive EBITDA contributions from both South Africa and Australia. We incurred a headline loss of 839 million rand, primarily driven by the lower pricing environment. After recognising non-cash impairment losses of 8.8 billion across operations in South Africa and Australia, the group reported net loss of 7.1 billion rand. These impairment losses reflect updated long-term assumptions on prices and exchange rate at the time of finalising the results, but do not affect liquidity or our ability to continue operating sustainably. Against this backdrop, the business continued to generate cash. The group generated 2.4 billion in operating free cash flows. After accounting for the sustaining capital spend of 2 billion, we arrive at adjusted operating free cash flow for the year of 396 million rand. We ended the year with a robust balance sheet holding $6.1 billion in cash and a net cash position of $5.1 billion after deducting funds held on behalf of the community and employee trusts. Our balance sheet structure provides resilience in the current market environment, preserving our ability to invest through the cycle and to continue to prioritize returns to shareholders. As a result, we are returning $281 million to shareholders as a final ordinary dividend. This, together with the interim dividend of R281 million and a share buyback of R139 million completed after the interim results, takes total shareholder returns relating to 2025 to R701 million. Taking a closer look at the income statement, revenue is down mainly due to weaker coal prices combined with relatively stronger producing currencies against the US dollar. Operating costs, excluding depreciation and amort, were approximately 900 million rand lower than last year. This is a function of actions taken to improve cost discipline and the impact of lower prices through reduced commodity purchases and royalties, offset by inflation and higher selling expenses. These revenue and cost figures resulted in adjusted EBITDA of 1.2 billion rand. Earnings were supported by net finance income of 2.7 billion rand, which includes 2.3 billion of gains from derivatives over foreign currency. The tailwinds from these derivatives, of which 1.3 billion has been realised in cash, became more pronounced as the rand continued to strengthen against the US dollar. We do not have the same level of currency protection in place for 2026 and currently do not expect the tailwind to be as pronounced in the current year. The impairment losses of 8.8 billion have been recognised across operations in South Africa and Australia and reflect weaker forecast benchmark coal prices and a stronger local currency against the dollar, contracting the projected margins over the life of our mines. Impairment losses are measured at a point in time, based on information available at 31 December, and changing market dynamics may have changed the outcome of the assessment if it was done at a different date. The impairment reflects mainly a write-off of historical capital, and the remaining PPE balance of around R12 billion is more reflective of the capital spent post our listing in 2021 than the cash spent on the acquisition of Ensham. Income tax for the year is a credit reflecting the impact of the net loss occurred in the year. Deferred tax assets of 1.1 billion have not been recognised based on the same factors contributing to the impairment losses. Turning now to operational performance for 2025, Export saleable production across the group remained resilient at 17.8 million tonnes, reflecting 13.9 from South Africa and 4 million tonnes from Ensham. FOB costs remained well controlled in a lower price environment. In South Africa, the FOB cost excluding royalties increased to 1,170 rand per tonne, while in Australia, the FOB cost excluding royalties was stable at 1,435 rand per tonne. Sustaining capex for the group was 2 billion rand. with $1.4 billion invested in South Africa and $600 million at Ensham, whilst expansionary capex of $1.1 billion was primarily directed towards the Zibuli North Shaft project and the Lepilale coal bed methane project. Overall, our operational delivery remained robust, with continued progress on productivity, logistics performance and disciplined cost control across both regions. Group revenue for the year declined by 17% to R29.6 billion. As shown in the graph, this was largely driven by materially lower benchmark coal prices and a stronger RAND. In South Africa, revenue reduced to R22.1 billion. The benchmark price was 15% lower year-on-year. And we also saw wider discounts as market conditions remained weak across most of the year. This impact was partially offset by higher export volumes. Domestic revenue was lower due to reduced production at Issy-Banello, softer industrial demand and the sale of Ritvla in late 2024. Revenue from Australia decreased to R7.5 billion consistent with a 22% decline in the Newcastle benchmark coal price. Importantly, Ensham's discount remained very narrow, with realized prices at 99.6% of the benchmark. Finally, the stronger average RAND relative to the US dollar also weighed on ported revenue, given that export sales are denominated in dollars. Turning to unit costs in South Africa, FOB costs, excluding royalties, increased significantly. to 1,170 rand per tonne from 1,130 rand per tonne in 2024. The key drivers of the increase were inflationary pressures in the mining value chain, low domestic revenue offsets, and high selling expenses associated with increased rail activity. These pressures were partly offset by stronger export production, lower underlying production costs and a lower non-cash charge related to the environmental provisions year on year, reflecting updated assessments of future rehabilitation requirements. Together, these factors helped us contain unit cost inflation below typical mining inflation levels in what remains a challenging environment for margins. Including royalties, which were lower due to realised prices, FOB cost increased by only 2.2% to R1,176 per export time. At Ensham, the FOB cost performance remained stable year on year. Excluding royalties, the FOB cost was R1,435 per export tonne, broadly in line with the prior year's R1,433 per tonne. This stability reflects a reduction in the non-cash charge related to environmental provisions, which helped to offset inflationary pressures and higher selling expenses. The increase in selling expenses was driven by above inflation rate adjustments and additional rail capacity that we secured to support our sales commitments in the second half of the year. When including royalties, the FOB cost reduced from 1,674 per tonne last year to 1,598 per tonne in 2025. This reduction is consistent with the lower realised coal prices given the progressive royalty regime in Queensland. We'd like to pause for a moment on the evolution of our capital spend in South Africa. On the slide, we show total capex spend, the sum of sustaining capital from 2022 through to 2025, and as expected in 2026, based on the upper end of the guidance we issued today. In 2022, the total capex of 1.9 billion was largely spent on sustaining capex, reflecting a focus on asset integrity and business continuity following the demerger. In 2023 and 2024, capex peaked at close to 3 billion rand as a result of expansionary capex spent to build Elders and Zabulu North Shaft projects. The successful execution of these projects has transformed Tungela from a short-life business at the time of listing into one with longer-life assets that should generate attractive returns through the commodity price cycle. In 2025, total capex stepped down to $2.5 billion as the LIFX projects neared completion. Expansionary capex in 2025 also included spin on the gas project. Looking to 2026, we expect a reduced CapEx spend rate. Total CapEx is expected to reduce by 56% year-on-year to 1.1 billion at the upper end of guidance, as expansionary CapEx is largely being spent and sustaining CapEx moves into a lower run rate. This reflects the group's commitment to disciplined capital allocation, investing through the cycle and now transitioning the South African business into a lower CapEx phase. Looking at the movement in net cash for the year, we started the year with 8.7 billion rand in cash. We paid 2.2 billion to shell this through the 2024 final dividend and buyback, and the 2025 interim dividend and buyback. We generated 2.4 billion in cash from operating activities, and that includes the 1.3 billion rand in inflows from the settlement of derivative currency instruments. We invested 1.1 billion in extending the life of the business through the Cebu North Shaft and gas projects, and a further 2 billion in sustaining CAPEX. In addition, we contributed 478 million rand into the green funds in South Africa and Australia, as required by the providers of environmental guarantees in those jurisdictions. We acquired the additional interest in Incheon for a total of 511 million rand. Together with other smaller movements, this leaves us with a total of 5.1 billion rand in net cash at the end of the year. Reflecting on what that means for shareholder returns, you'll be aware that the group's dividend policy is to distribute a minimum of 30% of adjusted operating free cash flow in the preceding period to shareholders. The group generated adjusted operating cash flows of 396 million rand for the year, which in itself does not necessitate a further distribution in terms of the dividend policy, recognising the interim dividend of 281% is well above the minimum of 30%. Notwithstanding this, the Board remains committed to prioritising Shell the returns where the balance sheet allows for it, and to the extent that the future prospects of the group are supportive of such. Accordingly, the Board has declared a final ordinary dividend of 2 rand per share, reflecting distribution of 281 million rand pertaining to the final 2025 dividend declaration. Together with the interim dividend and the share buyback completed after our interim results, we are returning a total of 701 million rand to shareholders, or 177% of adjusted operating fee cash flow generated in 2025. The trusts will also receive a further 31 million rand. This leaves the group with a cash buffer of approximately 4.7 billion rand, which the board considers to be appropriate in the current market circumstances. With that, let me hand back to Moses for concluding comments.

Thanks for that overview, Dion. Now let's turn to guidance for 2026. Starting in South Africa, productivity improvements across the portfolio coupled with the improvements in TFR rail performance, have limited the production hiatus we previously expected in 2026. Accordingly, export saleable production guidance for 2026 is 13 to 13.6 million tons. Our production footprint is in transition. ANEA continues to ramp up. and is expected to reach steady-state production run rates in 2026, replacing volumes from hoodwarp. Zebulon North is also in ramp-up and is expected to reach steady-state production run rates in 2027. FOB cost excluding royalties is expected to be between 1,320 and 1,370 rands per tonne, in line with the previous guidance assumptions adjusted for inflation. Sustaining CAPEX is expected to range between 700 million rand and 1 billion rand in 2026. With key life extension projects in South Africa now substantively complete, expansionary CAPEX of only 100 million rand is expected in 2026, related to the completion of activities at the Zwolle North Shaft. At NSHEAM, export-sellable production guidance for 2026 is between 3.9 and 4.2 million tons. The mine is now better equipped to traverse geological faults, while we have also made good progress on improving productivity. FOB cost, excluding royalties, is expected to be between 1,480 and 1,570 rands per tonne. Sustaining CAPEX is expected to be between 500 million and 700 million rand. Production in 2027 across both geographies is expected to be broadly in line with 2026. Tungela moves into a new year as a resilient and well-positioned business. We remain focused on operating a fatality-free business and will reinforce the zero harm mindset through targeted interventions. Our established track record of controlling the controllables remains firmly in place and will continue to drive operational excellence through cost efficiency and productivity improvements. These will be supported by a successful ramp up of ANEA and Cibolo North. At the gas project, will continue to validate the commercial viability and marketability of the resource. Tungela's disciplined capital allocation framework remains a cornerstone of our strategy delivery. We will continue to maintain balance sheet resilience, ensuring the long-term sustainability of our assets by investing through the commodity cycle while also prioritizing returns to shareholders. as we look forward to the next chapter of Tungela, will build on a solid foundation and seize the opportunity to grow the business to its full potential, emboldened by good assets, resources, and supportive stakeholders. Our people remain at the heart of the business, and I look forward to leading this amazing organization with a people-centric culture driven to achieve. I extend my sincere appreciation to the board, my executive team, our employees, community partners, and our shareholders. Thank you. Back to you, Hugo, for Q&A.

Thank you very much, Moses. We will now move to Q&A. A reminder that if you wish to ask a question directly, please join the conference call facility using the link you would have received upon registration. Dialing star 1 will indicate to the operator that you would like to ask a question. For those who have submitted questions via the webinar platform, I'll be reading those out. Operator, please could I ask you to open the line for the first question?

Of course. The first question we have is from Tim Clark of SBG Securities. Please go ahead.

Hi, Tim. Thank you very much. Can you hear me? Yes, we can.

Perfect. Thank you. My first question, Moses, is just your point. I think it's still on screen now where you talk about diversification options and creating future diversification options. You also spoke earlier on just about interaction with the board on working with the board on the next chapter. So given you've been in the business for a few months, I wonder if you could give us a little more flavor on that. My second question, maybe just while I've got the mic, is just for Dionne on the hedges. The gain was $2.3 billion. You said it was $1.3 billion in cash. Does that mean that the other cash is coming in this year? And are there any hedges outstanding at the moment? What is your hedge position as we stand right now? I'll leave it there for now.

Tim, thank you for that question. Certainly, as I said, we have a business that's really set as a strong foundation and really a base to set up for us for growth. And of course, what we are very clear about is that we are gonna chase growth and that growth is gonna come informed by two things really. We play where we have really strength to play and take those opportunities where we believe we can immediately see value come out of those assets. We, of course, got a strong balance sheet that's supportive for that growth, and the board has been really supportive of this thinking in terms of our growth. And we are gonna keep our discipline on capital allocation, which has been the theme of this business, and really has helped us deliver on our strategy. And maybe to close, there are no specific assets that we are necessarily targeting, but really driven by value and where we can realize value.

Hi, Tim, thanks for joining.

Can I just? Sure. Go ahead, Tim. Sorry, just to follow up on that, just to understand, you know, playing to your strengths. Is that a sort of mining strength, a project strength? Where do you see, Moses, having been there for a few months, where do you see the kind of critical strength where you can add value to other projects?

Yeah, I think that's a very good follow-up, Tim. Thanks. Really, the business is a business that has strength in people, capabilities, and some of those capabilities, of course, have showed up in our project delivery, which is incredible. We deliver projects on time, within budget, and really that provides us an opportunity to target those things that would allow us to apply those strengths. And technically, the team is strong, and so the ability to realize the value that we've seen out of NSHEAM also gives us the confidence that our ability to diversify to where the opportunities are, that we can take full advantage of those opportunities. Thank you.

Hi, Tim. Yes, thanks again for dialing in. In relation to your hedges question, there are two parts to the answer. The first one is the 2.3 billion Rand tailwind in our income statement. consists theoretically of three parts. Part one is, you might recall in 2024, we booked a loss in relation to derivatives, about 450 million rand through the income statement. Clearly that was at a point in time assessing the derivatives we had on hand. but that subsequently reversed in 2025. So that's one part. Part two is the 1.3 billion rand in cash that we made off the back of those derivatives. And then part three is essentially recognition that at the end of the year, we still had hedges in place, which will only unwind during 2026. So the most recent hedges check on what we still have in place, which is the second part of the answer to your question, is that we have around $580 million forward sales, the most simplistic instrument to talk about. And the average rate of those was around 1813 ran to a dollar. So in Jan and Feb, we converted about $170 million of that already. at 1840, and then clearly there's another 400 odd, 410 million that will vest up to the end of November this year, 2026, at an average rate of about 1804. Thanks.

Yeah, that's really very helpful. Thank you very much.

Thank you. Operator, any other calls?

The next question we have comes from Brian Morgan of RMB Morgan Stanley. Please go ahead.

Hi, guys. Thanks very much for the time. Can you just maybe chat to us about what your marketing team has been seeing in the last three weeks in the coal markets? Perhaps if you could differentiate between energy customers or your power station customers and the sponge iron customers, I'd be interested to hear what they've been seeing.

Can I ask you to take that one?

Can you hear me?

Yes.

Thanks very much, and thanks for the question, Brian. So in the last two weeks, we have clearly seen, obviously seen an increase in the prices across both South Africa and also Richards Bay on the back of the war in the Middle East and Iran. Specifically, in terms of the two market sectors you spoke about, Brian, the first being the sponge iron, we'd actually started seeing the sponge iron demand increase towards the back end of last year and become very strong during the first quarter of this year. Moses and I, in fact, were in India towards the back end of January and met with a number of the sponge iron customers, and they were extremely bullish. So we'd already started to see that increase in demand during that period. Of late, given the energy security, but energy security across all sectors, we have seen an increase in demand. We've seen that in Southeast Asia. We're seeing it in parts, even in parts of Africa. So right now, we are definitely seeing firmer demand for all our products. Thanks.

Brian, sorry, that was Bernard, our executive head of marketing. Any other questions?

That's fantastic. Thanks very much. Yeah, just maybe a follow-up, if I may. Given what's happened to coal prices, would you expect the sponge iron demand to remain firm or would begin to roll off?

Brian, it's a good follow-up question. Right now, the demand does remain firm. I guess the only concern we may have is that as we go forward and these prices remain firm, that the inflationary pressures may step in and start muting demand a bit. But I have to say, overall, if you look at specifically India and you look at the infrastructure development plans

um i remain positive uh for that sponge in for that sponge on industry very good thanks very much um if i can just move on to another question um mcclain copy sale um how much of the rehab liability was transferred to the to the buyer

So, Brian, in both the claim copy sale as well as the Goodwill North transaction, whilst we entered into definitive sale and purchase agreements over the last number of months, both of those transactions are still subject to Section 11 approvals. That process also involves replacing the environmental guarantees in a methodology that we, alongside the regulator, need to get ourselves comfortable is sustainable and responsible transfer of those liabilities. We estimate across those two transactions, if they are both successfully completed during 2026, which is our current timeline, that we would de-recognise around a billion rand of environmental liabilities by the end of the year.

Okay, cool. Thanks, Dion. Do you have any others in the pipeline that you'd be looking at?

At this point in time, nothing to talk to you about, Brian.

Okay, cool. That's all from me. Thank you.

Thank you. Operator, any more questions online?

There are no further questions, so... Thanks.

I'll be reading out some questions, Moses, Dion, Bernard. Perhaps the first one, Dion, for you from Giles at Apex Partners. With the post... year-end depreciation of the ZAR relative to the USD and the increases in the benchmark coal prices, is there a likelihood of a portion of the 8.8 billion rand impairments being reversed in the first half of 2026?

It's indeed a very good question. And as we've said before, we do an impairment check probably every six months. It so happens that at the time of end of December, there was a confluence of matters between the forward-looking coal price and the foreign exchange rates that this impairment was fairly pronounced. The review as to the appropriateness of our PPE balance will continue every six months. The hurdle to reverse an impairment is much higher. The board management needs to be convinced and have high conviction that the structural change in price and FX into the future is indeed sustainable. And therefore, I think it's highly unlikely for such a reversal. Remember, this impairment was non-cash, and the non-cash reversal, I think, would be even less likely. So whilst we will review it, and if there is a structural change, and we can convince ourselves of the need to reverse fully or partially, but I think that is highly unlikely.

Next question, Moses, for you. What is the optimal TFR rail performance volume for Tungela? If it was 56.8 million tonnes in 2025, what would TGA management like to see this improve to in 2026?

Thank you, Hugo. Richards Bay Coal Terminal this year are planning to receive up to 60 million tonnes in 2026. And this is reasonable from what we've seen in the first three months of the year. We are comfortable that we can rail our allocation to that 60 million tonnes.

Thank you. Dion, a question from Chris Reddy at Allweather Capital. Regarding capital and excess cash going forward, what are the views regarding buybacks and or special dividends going forward, given higher coal prices and weaker currency?

Good to know all where there's on the call. Thank you very much for your question. So you might recall two years ago that we had some of our larger shareholders not vote in favor of our special resolution at the AGM to approve the share buyback. And clearly we're respectful of all shareholders' perspectives and wishes on whether to receive cash back or through buybacks. What we've demonstrated is that we will at every cycle carefully consider whether the proportion of buybacks versus dividends. But as a general rule, I think what we've said before and we can repeat is that our dividend policy remains. We will pay back a minimum of 30% of our adjusted operating free cash flow. And any excess cash above that 30%, we would split between a buyback and a dividend, and probably in the ratio of one-third buyback and two-third cash dividends. Shelders are, of course, welcome to reinvest that cash back into the share also.

Thanks, Dion. Moses, a question from David Fraser at Peregrine Capital. Please clarify, would you look at acquisitions outside of coal?

Thank you for that question. We're working with the board. Again, we're looking at our strategy this year, and look to our students to complete that process. Of course, as we again reiterate, our position is always we look for those opportunities where we are able to make a difference and add value and where our strengths are right to play. So, of course, opportunities that come and fall within those parameters we will most certainly consider. Thanks, Moses.

Dion, a question from Sashi Shekhar from the city. The FOB cost guidance implies a circa 15% increase in South Africa cost, while just 6% increase in Australia. Could you please elaborate more on this?

Hi, Sashi. Good to hear from you. I know we can unpack this in a lot more detail a bit later on our one-on-one call. In some ways, we are a victim of our success in the cost per tonne in 2025. Previously, we estimated if you look at our guidance range for 25, that we'll spend a lot more per tonne. Clearly, the markets didn't allow us to do that, and we also produced at a much higher run rate than what we anticipated last year, also achieving above run rate production outcomes relative to our guidance. So our cost per tonne benefited very favourably in 2025 from conditions at the time. If you then look at the midpoint increase, so from what we actually achieved 2025 to the midpoint in 2026, that increase isn't as pronounced. It's slightly higher than inflationary, but we'll unpack that a bit later on today when we speak one-on-one. It is a normalisation of that cost. Yet again, for obvious reasons, internally we will target the lowest possible cost per tonne in 2026, and we hope to surprise you again on that outcome.

Thanks, Dion. Dion, just a question from Herbert from APSA. With the developments in the Middle East, are you getting any interest from Europe? Are you in any position to service that market?

Hi, good to hear from you, Herbert. The answer is always yes. Since in the last two, three years, Bernard and his team has broadened the flow of our coals across many, many, many jurisdictions, ranging from Europe, Middle East, Far East, Southeast Asia, and our spread of coals is now much broader. Yes, the heightened tensions in Europe and recent events even over this past weekend has given Europe much to reflect on in terms of energy security and inbound calls from actually many geographies, not only Europe, has continued since the onset of the conflict in Iran.

Thanks, Dion. Operator, any further calls or any questions on the call?

We have a question from Tim Clark of SBG Securities. Please go ahead.

Go ahead, Tim.

Thank you very much. Can I just ask about your life and mine? I just noticed in your reserves that there's a bit of a transfer out for the foreseeing of your FUBI. Does that affect life of mine, or we don't seem to have any? I know you're only going to release the full reserves statement later. I just wanted to give us that one. And then, Dion, just on depreciation for next year, with the massive impairments, it's quite hard for us to back up what the depreciation is likely to come out that, given the PPDs down so much. Can you give us some guidance there, please?

Tim, I can cover the front and you can cover the second question there, Dion. In terms of the life of mine, of course, both Ania as well as Zibulo do have opportunities for us to exploit in terms of the 4SIM opportunities there. So the current life of mine, of course, informed by the 2SIM work, we are continuing, starting work now to study the opportunities that 4SIM opportunities provide. Of course, in the right market and the right prices, those opportunities can come to bear. But like I said, we are starting the studies on both of those.

And just in terms of the resource and reserve statement, so the foreseam at Mafube is not going to affect the life of mine at Mafube. There are options that we are looking at extracting that also. So no, Tim, that is just a temporary feature as to where that mine finds itself in its life of mining cycle. until the most credible pathway to extract that full seam and sell it is redetermined. In terms of your second question on depreciation, you would have seen that if you look at our income statement a bit more closely, and again on our one-on-one call later today, we can unpack that a bit more, but our depreciation has actually increased in 2025. And the reason for that increase is clearly significant. as a result of the Elders, or now Enea Mine, and there's a blue north shaft capital that has made its way into PPE, so that depreciation has come into our income statement also. We will certainly help with a high-level view on what we believe depreciation is likely to be in 2026. But you are correct that it is probably going to be down by about 40% on what we've seen historically. So that's into 2026 as a result of that.

Okay, thank you very much.

Okay, last question then just for Moses. Enshim had good production volumes in the second half there to recover full-year volumes. after the challenging geology in the first half, is there any more challenging geology expected in the mining plan in 2026?

Thank you for that question. Of course, mining has always got geology that we need to navigate through. I think the challenges of H1, the team has done good work to learn, and therefore you saw the response in H2, as you point out, quite a positive response. It's really informed by ability to respond to those geological conditions and setting ourselves for success. We've created capacity with an exceptional team to deal with geology, as well as panels that we can keep the five key teams that are operating at NSHEAM always in full production.

Good. I'll wrap up the Q&A session here. If we were not able to get to your question today, please do get in touch with myself or Shreshni via email. Thank you to everyone for making the time to join our results presentation today, and we wish you a pleasant afternoon further. Thank you.