AMG Advanced Metallurgical Group N.V.

Good day, everyone, and welcome to today's AMG Q3 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and 1 on your telephone keypad. Please note, this call is being recorded. and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Michelle Fisher. Please go ahead.

Welcome to AMG's third quarter 2024 earnings call. Thank you for joining so late in the day. Joining me on this call are Dr. Hein Schimmelbusch, the Chairman of the Management Board and Chief Executive Officer, Mr. Jackson Dunkel, the Chief Financial Officer, Mr. Eric Jackson, the Chief Operating Officer, and Mr. Michael Conner, the Chief Corporate Development Officer. AMG's third quarter 2024 earnings press release issued today is on AMG's website. Today's call will begin with a review of the third quarter 2024 business highlights by Dr. Schimelbusch. Mr. Conner will comment on strategy. Mr. Dunkel will comment on AMG's financial results. And Mr. Jackson will discuss operations. At the completion of Mr. Jackson's remarks, Dr. Schimelbusch will comment on outlook. We will then open the call to take your questions. Before I pass the call to Dr. Schimelbusch, I would like to expressly refer you to our statement on forward-looking statements and the meaning thereof, as we have used at all previous occasions and we will use at this earnings call, and which explanatory statement has been published as part of our financial presentation and on our website, all in connection with this earnings call. I will now pass the floor to Dr. Schimmelbusch, AMG's Chairman of the Management Board and Chief Executive Officer.

Thank you, Michelle. AMG's EBTA continued on a steady growth trend in Q3, during which we achieved $40 million of EBTA. AMG Technologies delivered a strong performance compared to Q3-23, with excellent results in a growing market. Our engineering unit secured 131 million of order intake and had an order backlog as of September 30 of 367 million, the highest in EMG's history. This result continues to support the rationale of AMG's diversified portfolio by demonstrating our earnings power despite the challenging market conditions and depressed price levels in our lithium and vanadium segments. I will hand it over to Mike to speak about our growth initiatives. Mike?

Thank you, Hans. In terms of our growth projects, we are now in the finalization stage for our major lithium projects. Our Brazilian lithium concentrate plant expansion is complete and rampant. We expect to produce a full 130,000 ton annualized capacity before the end of the year. On September 18th in Bitterfeld, Germany, we hosted the grand opening of Europe's first lithium hydroxide refinery. Overall, the lithium industry is still in its infancy and experiencing the type of volatility inherent in the advent of new markets. Despite these short-term challenges, we are confident in our current position and remain enthusiastic about the opportunities presented by the evolving market dynamics. The industry's future looks bright, as lithium is poised to play a crucial role in the transition to a cleaner, greener future. The lithium industry continues to experience remarkable growth, driven by the global shift toward renewable energy and electrical vehicles. As countries prioritize sustainable energy solutions, lithium ion batteries are becoming more and more essential to everyday life. Conversely, on the supply side, there are substantial delays and interruptions in not only new investments, but also contraction in the existing supply chain because of current unsustainable price levels. Specifically, it is estimated that over 6% of the existing global lithium production available for 2025 has already been impacted due to curtailments associated with the low market prices, with Australian producers being hit hardest. Short-term fluctuations are impossible to predict. However, these supply demand dynamics have a relatively predictable outcome. The production cost curve for existing and potential producers indicate that a higher long-term price level than the current position is required for a sustainable lithium industry. Consistent with our progress in the lithium space, we have completed our major capital investments in the vanadium segment, including doubling our production capacity in Ohio and completing the construction of our vanadium electrolyte plant in Nuremberg, Germany. In our vanadium business, we are also experiencing what we consider to be unsustainable long-term supply-demand dynamics. At current price levels, many of the existing vanadium producers are unable to maintain their production. Global steel production is on an upward trend, especially in developing economies. This traditional demand will continue to support the vanadium market. Additionally, Increased investment in infrastructure and renewable energy products, especially energy storage, is expected to boost demand for vanadium, particularly in regions focused on energy transition and sustainability. As with the lithium space, the production cost curve for existing and potential producers indicates that a higher long-term price level than the current position is required for a sustainable vanadium industry. Our technology segment is benefiting from the current strength in the aerospace sector. Overall, the aerospace sector is on a steady upward trajectory, driven by a combination of recovery efforts, technological advancements, and a focus on sustainability. As these trends continue to evolve, they are likely to shape the future landscape of the industry. Innovations in aerospace technology, such as our advanced technologies and materials, are creating new opportunities for aircraft manufacturers and suppliers. The industry is rebounding from the impacts of COVID-19, with increasing passenger air travel and cargo demands. Airlines are ramping up operations, leading to higher aircraft orders. Additionally, there is a growth emphasis on sustainability, driving demands for fuel-efficient and environmentally-friendly aircraft, directly impacting the demand for our products and service. Also within the technology segment, AMG Leva is engaged in the execution of several battery projects to optimize the energy management of industrial plants and incorporate renewable energy sources. AMG Leva's first third-party commercial hybrid energy storage system is now operational at BepoTech GmbH, a leading global provider of intelligent weighting and inspection technology located in southern Germany. Leva's energy storage system integrates lithium-ion and vanadium-redux flow batteries with AI-driven efficiency, enhancing the power system at Vipotec's facility. In summary, we have completed transformational expansions across our critical materials portfolio. We remain a low-cost producer and have maintained a diversified portfolio, which allows us to mitigate the most significant risk associated with market fluctuation. As a result, we are well-positioned to capitalize dramatically our markets align with the anticipated outcomes of the global energy transition. I will now pass the floor to Jackson Dunkel, AMG's Chief Financial Officer. Jackson?

Thank you, Mike. I will be referring to the third quarter 2024 investor presentation posted today on our website. Starting on page five of the presentation, I'd like to reiterate Heinz's comments about the strength of the EVDA performance this quarter, given the low lithium and vanadium prices. The rest of AMG's portfolio demonstrated significant strength. Net loss attributed to the shareholders for Q3 24 was $13 million. This net loss figure was the result of an inventory cost adjustment in our lithium segment, which accounted for $18 million of pre-tax earnings deduction. Moving on to page six, you can see the price and volume movements for the key products represented by arrows, which I will go into in more detail as we review the segmental slides. On page seven, you'll see our leverage and valuation figures for the current quarter compared to the year end 2023. It's important to note that we've invested over $650 million over the last four years for our lithium and vanadium expansion projects, which has impacted the return on capital metrics displayed here. Nevertheless, we have significant liquidity to support our future growth opportunities. Now I'm going to review our three segments, and I'll start with AMG Lithium, which is shown on page eight of the presentation. On the top left, you can see that Q3 24 revenues decreased 22% versus Q3 23 to $49 million. This was driven mainly by the 67% decline in lithium market prices versus Q3 23, but was offset by a 42% increase in lithium concentrate production as our new processing plant in Brazil continues to ramp up. Adjusted EBITDA for the third quarter 2024 came in at $10 million, down 65% from Q3 of last year due to the decline in lithium prices. The quarterly capex, shown at the bottom left at $19 million, was driven by our two expansion projects in Bitterfeld, Germany and Brazil. Turning now to page 9 of the presentation, which shows the AMG Vanadium segment. AMG Vanadium's revenue for the quarter decreased 13% to $151 million compared to Q3 23 due to lower sales prices across the segment and lower volumes of ferrovanadium partially offset by increased volumes in chrome metal. Q3 24 gross profit decreased by 34% compared to Q3 23 largely due to the decline in revenues. Q3 24 adjusted EBITDA of $11 million decreased 29% compared to Q3 23 This is primarily driven by the 21% decrease in market price for ferrovanadium compared to the third quarter of 23. In terms of the sequential drop in EBITDA versus Q2 24, AMG Vanadium sold fewer tons of ferrovanadium in the current quarter as the production facilities had a number of planned maintenance outages. In addition, our chrome and aluminum businesses were affected by our normal lower August production volumes. Moving on to AMG Technologies on page 10. Starting on the top left, you can see that Q3 24 revenue increased by $24 million or 19% versus Q3 23. This improvement was driven by higher sales volumes of antimony and silicon and higher net sales prices of antimony. Adjusted EBITDA of $19 million during the third quarter was more than double the same period last year. The increase was primarily due to higher profitability in antimony and graphite. AMG Engineering signed $131 million in new orders during Q3, driven by exceptionally strong orders of remelting furnaces. Order backlog was $367 million as of September 30th, a record high. AMG Silicon began operating two of its four furnaces in March of 2024. As we plan to run two of four furnaces for the remainder of the year, the results of AMG Silicon remain excluded from EVTA. Turning now to page 11 of the presentation. On the top left, you can see that AMG's Q3 24 STNA expenses were $47 million versus $43 million in Q3 23. The increase is largely driven by the increase in headcount in our lithium, engineering, and leave of businesses associated with our strategic expansion projects and higher professional fees relating to additional regulatory requirements. AMG's net finance cost was $8 million in Q3 24 compared to the $9 million in the prior period due to higher non-cash intercompany foreign exchange gains in the current quarter, partially offset by increased interest costs associated with the new $100 million incremental term loan issued in April 2024. AMG recorded an income tax expense of $2 million in Q3 24. This expense was mainly due to $7 million of deferred tax expenses in our German businesses related to losses that do not qualify for recognition as deferred tax assets. This expense is offset by the $3 million tax benefit related to the statutory tax rates applied to AMG's negative profit before tax. In addition, there was a $2 million deferred tax benefit related to a favorable foreign exchange impact on a Brazilian tax of positions. AMG paid taxes of $5 million in Q3 24 compared to tax payments of $33 million in Q3 23. The reduced cash payments in the current period were largely a result of the decrease in profitability year over year. Turning to page 12 of the presentation, you can see on the top left that cash used in operating activities was $2 million in Q3 24 compared to cash from operating activities of $25 million in the same period of 23. This is primarily due to lower profitability in the current quarter. AMG ended the quarter with $490 million of net debt, and as of September 30, 2024, we had $272 million in unrestricted cash and $200 million available on a revolving credit facility. As such, we had $472 million of total liquidity at the end of the quarter. That concludes my remarks. Eric?

Thank you, Jackson. lithium and vanadium prices weakened quarter over quarter and sequentially. However, due to our low-cost position in both segments, AMG lithium and AMG vanadium delivered positive EBITDA in the third quarter. Our third segment, AMG Technologies, reported exceptional results driven by our market-leading position in our engineering businesses and strong results in our diversified mineral operations. Our Brazil lithium operation produced in excess of 26,000 metric tons of lithium concentrate in the third quarter and delivered 22,731 metric tons SIF China. The average realized sales price was $870 per metric ton and the average cost of production was $450 per metric ton, both SIF China. Production consistently increased during the quarter and our expansion is successfully proceeding on our previously announced schedule. We expect to reach full 130,000 metric ton annualized capacity by year end. AMG Vanadium's Zanesville and Cambridge spent catalyst processing facilities lead the industry in terms of cost structure and environmental performance. Our Farrah Vanadium results for the third quarter however, negatively impacted by average prices being lower by more than 20%, quarter over quarter, and unabsorbed operating costs in Cambridge relating to the relining of our secondary furnace and completion of a number of melt shop maintenance projects. It's worth noting, however, that the relevant ferrovanadium index price has increased by 10% in the month of October. Boeing's work stoppage, which has been recently resolved, impacted AMG Titanium's titanium aluminide sales volumes during the quarter. However, this was offset by increased sales volumes for the rest of the unit's titanium alloy production. In our technology segment, AMG Engineering signed $131 million in new orders during the quarter, driven by very strong orders for remelting furnaces. and as mentioned, had a record order backlog of $367 million at the end of the quarter. Our other operating units under the AMG Technologies umbrella, especially Antimony, also performed extremely well in the quarter and made a significant contribution to the $10 million quarter-over-quarter increase in AMG Technologies' EBITDA. As always, our overriding operational objectives are to be the low-cost, highest quality, and most environmentally responsible producer of all of our products. This enables us to produce positive financial results even in the trough of our various end markets. I'd now like to pass the floor to Dr. Shima Bush, AMG's Chief Executive Officer.

Thank you, Eric. Thank you, Eric. Due to the strong operating results to date, including exceptional results from our antimony operation, we are increasing our EBTA guidance for 2024 from, quote, exceed 130 million EBTA, unquote, to exceed 150 million EBTA, unquote. As the lithium prices have weakened further, and AMG's anti-money contributions normalize, we expect AMG's adjusted EBITDA to exceed 130 million in 2025. Due to the uncertainty related to the commissioning and ramp-up process, as well as the impact of the write-downs in the value of our inventory, to the current low market prices. We have excluded any expected contribution from our lithium hydroxide refinery in Bitterfeld, Germany, from our 2025 guidance. Operator, we would now like to open the line for questions.

At this time, we will open the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad, and you'll be placed into the queue in the order received. You may remove yourself from the queue at any time by pressing pound and 1. Once again, to ask a question, press star and 1 on your phone now. And our first question comes from FN Ravi of Citigroup.

Thank you. I've got three questions, but this is on three different businesses. So if I may, I may take it in turn. Firstly, can you give a sense of price sensitivity to earnings on antimony? I understand that you've got about 10,000 tons of antimony trioxide production. And so is it as simple as every $1,000 per ton change in the antimony trioxide prices, you know, $10 million to gross profit? Or is there a different scale that we should use?

Well, we have a very stable antibody business with free cash flow contributions year over year. But in this year, due to significant rises in the antibody price, antibody price for all the antibody products, we have more than double our normal EBTA contribution from that business. We expect that to normalize, but that's a thing of the future. We assume this not to continue.

However, Ephraim, it is a processing business, so it's not a... It's a conversion business. It's a conversion business, so you can't take a thousand, you know, There's no scale. We make a margin over what we buy it for.

Okay, so a lot of the price or the earnings increases essentially low-cost inventory that you have, which then you sell at the higher prices, prices rise. Would that be a failure to the inventory?

You replace low-cost inventory as time goes by with higher-cost inventory.

Okay, thank you. And secondly, on the engineering orders increasing very substantially and record order backlog, I mean, the auto industry, especially in Europe, is quite weak. So is it entirely aerospace that is kind of leading to that big increase in the vacuum furnaces business?

This is true. It is. It is totally. Automotive plays not a role here. significantly other than service businesses for heat treatment services, which are very predictable and constant. Aerospace is the customer, in particular the aerospace engine industry. We are critical suppliers to the engine, to the aerospace engine.

Okay, thank you. And thirdly, on the Bitterfeld expansion, obviously you have both taken down your CapEx guidance for next year to $100 million, and also you've said that you're not including Bitterfeld contribution in your EBITDA guidance for next year. So is it fair to assume that the step up from 20,000 tons to 100,000 tons has been put on hold for now? Or is it still kind of in place at the right time, which probably is not in the near term?

Well, it was never put on hold formally because there was never an investment decision more than the 20,000 ton first module. So we didn't have to correct the decision because it was never taken. We are focused on the first module. to complete the commissioning and qualification and ramp up of the first module. That's our priority. And we, of course, would consider expansion of adding other modules if the market demands that.

Okay. Thank you. Those are my questions.

Thank you. Our next question. comes from Martin Dendriever of ABN AMRO.

Good evening, gentlemen. My first question would be with regard to the lithium hydroxide plant. You mentioned uncertainty relating to the commissioning and ramp-up process. What's changed? Because previously you were quite confident about both the processing, the stepping up, the ramping up of the process, but also the commissioning and the acceptance of clients. So what has changed? And in relation to that, so that would be question two, can you provide some guidance about the profitability of the lithium hydroxide conversion plans based on today's market circumstances?

Mike? Yeah, thanks. Thanks, Martin. Appreciate the question. So with the successful construction of the plant, we're very happy where we stand, and we're transitioning to the next phase, which is the commissioning phase. That will be complemented by the qualification of our customers and the final ramp-up of the plant. Following our latest assessment, we've adjusted the commissioning and ramp-up schedule to now expect to reach full capacity in the second half of the I would say, as with any construction phase, the commissioning and ramp-up phase of a new plant always faces challenges and a certain degree of timing uncertainty. We're experiencing this process from commissioning and ramp-ups from our recent successful plant deliveries, including Spot One, Spot One Plus, the $325 billion plant in Ohio. As with those projects, we're progressing through this in typical startup procedures, and we're confident in establishing Bitterfeld as cornerstone of our growth strategy. Switching to the second part of that question, not to get too deep into the accounting technicalities, but we had purchased a significant amount of inventory to ramp up the plan. Because of the price drop in that inventory, what we do is we write that inventory to what's called net realizable value. When you go to net realizable value, you leave a margin in the value of the inventory so that when in 2025 we sell that inventory, we won't recognize a margin because the product, the inventory that we have was only written down to the cost plus margin. So even though we continue on a confident schedule for commissioning, qualification, and ramp-up, Once we do that, because of the price drop and the inventory write-downs that we've incurred, we won't see a significant amount of profitability from that inventory in 2025.

Just to follow up. So the customers are still there. Your MOUs and offtake agreements are in place. It's just the ramp-up phase that is now taking a little bit more longer than you expected. Because did I understand you correctly? like you said, commissioning in the first half of 2025?

Yeah, so to answer your question, customers are still there. We're highly confident in the market. And we're commissioning qualification and ramp up and expect to reach full capacity at some point in the second half of 2025. Okay.

I have another accounting question, but I'll take that offline with Jackson, if I may. My second question would be on the... on the Brazilian conversion plans. My question would be, given the low lithium pricing environment and the uncertainty about what that price may do, what are your current thoughts on that Brazilian conversion plan? Should we still take that as a near-term reality into account, or is that now more of a let's wait and see a little bit how the market evolves type of project?

We have, as you know, we have prepared the Brazilian conversion plant in a very advanced way. We have completed the FEL3 feasibility study, which leads us to the gate of basic engineering. We have also advanced the financing the financing structure, the architecture of project financing for this plant with the banking institutions in Germany, which imply a government guarantee. We have done work on site selection. And recently we are considering to expand the plant eventually to make room for other spodumin suppliers in Brazil, which is logical. And that implies the work on additional site selection and feasibility work. not directly related to the market. But we are in no rush to start here the heavy investment work as this optimization feasibility study is underway. I think we don't want to make a mistake here. And therefore, we go through this in a very systematic way.

I understand. Thank you. And just a small follow-up on this one. If you do decide to take the decision to move forward with this plan, I'm still counting on them a two-year construction period. Would that be correct?

That's about right. Please don't think that we are reconsidering this plan. This plan is a firm... strategic cornerstone of our future development of our lithium value chain. It is very important. And so don't think that we are, you know, delaying or considering. We're just optimizing right now.

Okay, clear. And then my final question is on AMG Dunadium. I'm not quite sure whether I understood it correctly, but there have been some maintenance outages. Would it be fair to assume then, now that the Boeing strike is over, although that's, we're on the 6th of November again, and those maintenance outages will not reoccur in Q4, that the Q4 performance will go back to normal levels in terms of every day?

We had planned maintenance in our ferrovanadium production. The Boeing, we sell... which is with an end market of the aerospace, primarily from our Nuremberg operation, which is vanadium aluminum and titanium aluminides. But our ferrovanadium operation has regular maintenance in this low market. We take some opportunity to extend that a little bit and make sure we do everything correctly. And we are essentially running close to back at normal run rate levels.

Okay. So that applies to both Cambridge 1 and 2 and the Nuremberg facilities.

Yeah, there might be a little delay on some of the aerospace titanium aluminides catching up, but yes, it's both of them.

All right. Thank you very much. Those were my questions.

Our next question comes from...

Yes, thanks for taking my question. I also have a couple, so I'll ask them one by one. The first one is a clarification on the 25 guide and the rationale for not including bitter salt, because I still don't fully understand. Pardon me, I'm maybe too slow. But there's a delay in ramp-up to reach fuel capacity in the second half. due to uncertainty over the customer qualification process? Or are there other internal issues that lead to this delay?

Yeah, sorry. So just to reiterate that, maybe I went through a little quick. We consider, you know, we've ramped up three very large projects. We're very familiar with the process. And, you know, commissioning, the nature of commissioning is uncertain from a timing perspective. You turn the plan on, And then you have to respond to what happens. The schedule that we've most recently updated results in, you know, we've looked at the qualification, the commissioning, and based on where we're at today, we believe that we'll reach full production in the second half of the year.

Okay. And if the qualification process is successful sooner, there's no way to expedite that.

Again, like I said, there is a certain amount of uncertainty with this, and we build that into our schedule. So theoretically, if everything were to go perfectly, things should get done faster. But, you know, having done this a few times, it's generally not the way it works.

The qualification process has several stages, which include that you – temporarily run full production. You stop production because you want to use the production for large-scale sampling within the qualification process in order to optimize the learning process from that feedback. And then you run continuously. So it's a very disciplined schedule which has its own time schedule. And it has its uncertainties, which you don't believe are large. because we are operating with very experienced engineering companies which are partly doing this under an EPC contract structure. So there is no, it's just going through that process in a very disciplined way in that you don't extend it, you don't make it slower, very closely with your customers.

Okay, good. That's fully understood. Now, another one on the guidance, the plus 130 for 2025. I mean, assuming a decent run rate in vanadium and looking at earnings in lithium in Q3 on also depressed prices, and then also taking into account some normalization in vanadium, the 130 million seems to be quite low. even when you don't include any Bitterfeld's contribution. But is there a negative contribution for Bitterfeld implied in this 130 startup cost, et cetera? And if so, what's the quantum?

No, there's no negative element implied. So can you then help me understand?

It's part of our strategic project. You can see it in our strategic project costs.

Okay. But can you then help me understand sort of the, the hypotheses behind the plus 130, looking at this quarter's earnings. I mean, lithium prices are also very low. Vanadium prices are also very low. I don't get where you go from a run rate of 40 million in Q3 to 130 million annualized on 25. So can you help me a bit bridge that? So first, first,

By nature, we are cautious or we are not overly optimistic in guidance setting. We actually don't like the guidance process, but we don't want to be long in guidance. So far, we have never been. So when you start with the guidance of 24, 130, remember? There was a guidance of 130. In a very abbreviated way, lithium and vanadium prices further deteriorated. And then there were positive elements. And the positive elements very prominently include antimony. And so the negative price impacts of further falling vis-a-vis the guidance timing, the state of the giving of the guidance. Further falling, this human venetia prices were compensated by positive elements very prominently, including antimony. Now, we don't believe that the antimony spike will continue for reasons stated. So if you take that away, we end up at 130 again. So it's very simple.

Steve, you have to look at the average prices as well, right? So the price that we disclosed for Q3 was 870 per ton delivered China. If you look at our price list, you can see that, you know, spodumene is now listed at 750. Our 130 is at constant prices today, right? So there's an implicit difference decrease in the lithium price baked into our 130 versus the Q3.

Yeah, but do you also then take a stance on anti-money prices or it doesn't work that way because that's a processing business?

We believe that the anti-money profit was a one-time affair.

Okay, there you do take a stance. Okay, fully understood.

Final question. That has nothing to do with the cheeky stance.

No, no, no. You do take a stand. We are saying that it's not repeatable in 2025, correct?

I see. Okay. You know, we're talking about Tajikistan.

Tajikistan supplier. Let's keep those out of here. Final question is maybe more philosophical, but there has been a lot of negative news flow from the European EV supply chain in recent months. Notably, yes, all these OEMs are backtracking on their AV roadmaps or are shifting to LFP over NMC. Given all that is happening today, which role do you see carved out for AMG to play in the European battery supply chain in the coming three to five years? Because increasingly one could ask whether there is room for a viable supply chain here in Europe.

Well, we don't see fundamental changes. If you want to see into the future, we always said traditionally that the consensus of the EV demand in 2030 will be 600,000 tons. been revoked, this consensus estimate. Maybe it's 500,000 tons. We don't know. Definitely, our product in the first model with 20,000 tons is a very small market share in that predicted demand. So even if there are massive corrections, presently the only refinery in Europe. And the local refinery, of course, regionally local refinery, has tremendous advantages vis-à-vis imports from China or Australia. So, I think this is not an issue. The issue is how How large will the market actually grow? And we will react accordingly. So we wait . Recently, as we know, more than 50% of all lithium producers are below . And you need, in our view, $25,000 per ton of carbonate equivalent to make investment decisions for the lithium value chain. So I think the supply chain is waiting for a correction in order to You can see the investor .

It's seen on Heinz's last comment, you can find that on the last page of our investor presentation, page 29, which shows that 50% of the capacity is under water right now.

Yeah, got it. Thank you. These were my questions.

As a reminder, if you do have a question, please press star and 1 on your telephone keypad now. And our next question comes from Martin Verbeek from The Idea.

Good evening, it's Martin Verbeek of The Idea. A couple of questions from my side, please. Firstly, you more or less completed most of your lithium investments have been done. But still, you expect a hefty 100 million capex for next year. Could you provide some color where you will spend this money on?

So in that 100 million, and we'd probably characterize it more as a range, 75 to 100. I know it says 100 in our slides. There's $25 million of residual capex associated with our battery-grade hydroxide plant. So that's a significant piece. in the overall capital.

I don't hear you yet talk about the Saudi investment. When will that kick in?

Sorry, which investment?

The super center in Saudi Arabia.

Oh, SARBV, yeah.

The super center in Saudi Arabia. operated through SARBV, the Shell AMG Recycling PV joint venture, has completed its FEL3 feasibility work substantially. And therefore, we are approaching the gate of financing and investment decisions.

And that is to be expected still this year or will it be first half next year?

We are not commenting on joint venture operations.

And then lastly, I read an article recently that one European OEM has taken a step to accelerate future electric vehicles with solid-state battery technology. Is that something which with your technology also can be implemented?

Well, the solid-state battery technology is a very broad global development effort where we are having a significant position in the solid-state battery materials. We are, as you know, operating a pilot operation. We are expanding that. We are going into the engineering of enlarged pilot operations in this commercialization process. So it is a very important part of our of our development expenditures. And we are participating in a prominent role in that development.

But then you mentioned you are in the materials, but can your materials for these solid-state batteries be used for battery electrical vehicles?

of course okay yeah of course okay thank you our next question comes from sigin van easter of ict yes yes me again sorry one follow-up if i may an investor has pointed out to me that under the final section 45x guidelines urban idiom business may be eligible for an increased tax credit um Is that the case, and could you, if so, provide the quantum of this increased benefits? My understanding, it was $10 million annually to date.

Yeah, so that will likely increase because, as your investor noted, we have been allowed to include raw materials. We're still working through with our accountants and our tax advisors what that means in terms of quantum. But it will likely increase over the 10. OK. All right. Thanks.

Thank you. And it appears that we have no further questions at this time. I will now turn the program back to our presenters for closing remarks.

This concludes our third quarter 2024 earnings call. Thanks, everyone, for joining.

Thank you. This does conclude today's AMG Q3 2024 Earnings Conference call. Thank you for your participation. You may disconnect at any time.