Exxaro Resources Limited

Thank you for joining us here today, here in person at The Connection, and to those that are joining us online. We welcome you. My name is Anda Mwanda. I look after investor relations at Exaro, and today I'll be facilitating this session. Before we begin, like we always do at Exaro, safety is our number one priority. And for today, please note that we have not planned any emergency drill. Therefore, if the alarm is activated, please remain calm and wait for the Xaro floor marshals who are wearing red reflective vests here in the building. And they will lead you to the assembly point in front of the building where we have our parking area. We will all have a roll call which will be conducted by an Xaro floor marshal. We will all remain there until the next we are informed to come into the building. If at any time during the presentation you feel unwell, please inform your host who will escort you to the on-site clinic for medical assistance. In the event of this situation, please note that visitors should always be accompanied by their host. In terms of our ablution facilities, you get out of the build of the auditorium, you turn right, your first passage on your left, that's where you will see our ablutions. They are clearly marked. We kindly ask that for this session, all cell phones are put on silent, and just to remember that from a safety perspective, We encourage you not to text while you are walking in the building. Please take note of our safe harbour, of our disclaimer. Today's presentation will cover our group highlights, followed by operational and financial performance, and will conclude with our outlook for the remainder of the financial year 2026. unless otherwise stated, the results presented today relate to the six months ended 30 June 2026 and are compared with the corresponding six months period ended 30 June 2025. Presenting our results today, our Chief Executive Officer, Mr. Ben Magara, and Finance Director, Rian Koppeschaar. We've set aside time at the end of the presentations for questions and answers. And it gives me great pleasure this morning to hand over to Ben to take us through the group highlights. Thank you.

Thank you very much, Anda. Good morning, everybody. And thank you very much for joining us this morning. It is Women's Month. For those in purple and pink, we appreciate you for realizing that. But also in particular to the women among us and online and everywhere, we want you to know that the benefits we get, including the life we have, come from your sacrifices. And we thank you. I would also like to extend a warm welcome this morning to all of you, as Anda just said, especially those online and most are here present with us today. A warm welcome to our board members, SISG, as we fondly call you. Thank you very much for joining us. And I know some of them are also joining online. We appreciate you. to our shareholders and of course my fellow employees. We have the pensioners club here today and we hope we are keeping your earnings safe but I must personally welcome you because it is the journey that we have traveled and this year Exaro celebrates 20 years since our listing in 2006. I wish I could have two horns today to showcase the two guys who looked a lot younger when they did that then, and they are present with us today. But we shall not talk about their salt and paper. I'm not sure it's more just the salt, because I don't think I see any paper anymore. But when we met at our Capital Markets Day in June, we reflected on the progress that we have made in building a diversified portfolio for Exaro. We are indeed accelerating the disciplined and prudent execution of our strategy by strengthening our coal base, growing our renewable energy business, and for the first time, reflecting the contribution from manganese in our earnings and into the business and in these results today. The manganese results only reflect four months since we took over on the first of March, but today, We want to reflect on our operational performance for the first half of 2026. So from our operating activities, I'm really pleased that Exaro has managed what's within its control and delivered strong production performance, strong cost management, and an exceptional safety performance that we will reflect on. The headwinds of inflationary pressures, especially diesel, were contained well within inflation thanks to the great safety and production from our operating teams in all areas from coal to renewable energy and to manganese. So let me start with safety. At Exaro we expect everyone to come to work and return home safely, unharmed every day. This conviction is showing great signs, ladies and gentlemen. We are now four consecutive years without fatality, and our lost time injury frequency rate improved by 60% to 0.02. This is our best statistics on record for Xaro. Thank you and I can promise you that if you don't read our results, the proxy of safety driving better production, better performance, better efficiencies and cost will be reflected in our results. In terms of how all our operating teams have performed. Any business is a hazardous business. Any business has got risks. but we must remain focused ensuring that our controls are in place and that we are able to proactively manage safety. This performance reflects the continued implementation of our one voice strategy. Most importantly, the commitment of our people across the organization to work safely and the conviction that zero harm is achievable. So we are encouraged by this performance and we remain vigilant and we must continue on our goal to zero harm because that is what's critical in the underlying performance of any business. Now tending to some other key messages, I think as I've already highlighted that we continue to make tangible progress in executing our strategy and building our diversified portfolio. Two highlights on our strategy execution for the first half. is really our LSP project, the Lepalale Solar Plant, reaching commercial operation in April, and it is now generating green electrons for our Akrut Hulag mine. I'll touch on this a little bit later. And for the first time, our results, as I said, include the contributions from Manganese. Ladies and gentlemen, safety makes business sense. And in that regard, our coal production is 11% up on last year to 21.5 million tonnes. Our coal export sales are up 15%, taking advantage of the higher prices we saw in the market, to 3.9 million tonnes. Our renewable energy business is up 12%, thanks to the solar plant at Lepalale. because we had much lower wind in the Eastern Cape. Pleasingly, production in manganese is also up 11% year on year. Importantly, we reiterate our guidance for the full year as we can see that we are on track to deliver on it. This operational performance is translated into a resilient financial result. And I know Koppes will be touching on this a little bit later. For those online, that's real. Group revenue increased by 7%. This is in spite of exchange rate strengthening by about, I think, 11%. Our EBITDA essentially flatted 5.6 billion and the exceptional operational performance in production and costs is possibly a bit more masked by the cost inflation issues. But we are very pleased that we're able to withstand those cost pressures and deliver essentially flat EBITDA numbers. We continue to generate strong cash flows and our balance sheet remains strong. with net cash at 6.4 billion excluding the energy project finance debt. We excluded because the project finance debt in Synergy has no recourse to our balance sheet. This provides us with the liquidity to find our strategic priorities while we sustain the consistent shareholder returns that we have been delivering since listing. So, most importantly, we remain on track, as I said, to deliver on our guidance. Unfortunately, our headline earnings per share was negatively impacted by our equity-accounted investments in Sayoc, Session I&O Company, and Black Mountain. We are, however, pleased that in line with our new dividend policy, which is to retain 40 to 67% of our group adjusted earnings and a pass-through of 100% from SIOP dividend that the board has declared an interim dividend of seven rands per share. I'm surprised that Cebu CISO clapped first and not the pensioners. This is Exaro's 47th consecutive dividend since listing. We have never missed a dividend. There are, however, still tough macroeconomic factors due to all the geopolitical uncertainty that I'm aware that we all are aware of. But let me unpack a little bit just to give you a context in the impact on Exaro, but also maybe on the whole industry and business. So before I really unpack the issues of operational performance, the conflict in the Middle East contributed to renewed volatility across the global markets, with oil prices increasing sharply Almost oil prices going quite volatile, translating all this into higher diesel prices for the country in general, but obviously the mining industry, especially if you operate in open pit mines, with much more impact from diesel. and the broader inflationary pressures. So you will be able to see how Exaro has managed to contain these costs only within inflation, all within inflation, because thanks to the efforts of our operating teams today. However, some of these gains would be offset, as I've already said, with diesel costs and a stronger RAND. Against this backdrop, we remain focused. on the factors within our control, driving operational efficiencies, maintaining the cost discipline across all our three businesses. It is this focus on disciplined execution and operational excellence that underpinned our operational performance for the first half, which I will now go and take you through them. Turning to operational performance, beginning with coal, and very importantly, that our three pillars of coal, renewable energy and manganese also continue to portray exactly how the business is performing. But if I start off with coal, with total production up 11%, strengthened by higher output, particularly at Kroot Kalak, and the safe ramp up at Matla. And Matla, if you look at it, year on year improved by 38%. This is an underground mine with continuous miners, extensive labor and workforce underground, working safely and delivering a 38% improvement year on year. Very pleasing. So the Matla ramp-up has been delivered on schedule and continues to perform exceptionally well. I saw a beautiful video from Mervyn of a conveyor belt running. I waited for two minutes, Mervyn, to see if the call was coming, and I did see it. So I looked through the whole video. but really wonderful performance from Krutkalak and Matla. Belfast and Mafube are mainly impacted as you see a bit lower year on year but this is all in line with their respective mining plans. So it's not odd to, it's an expectation we have because of their own mining plans in that area. As the mines get slightly deeper, the yields get slightly lower which is really kind of, symptomatic of the Mpumalanga coal region. At Liupan, I'm really pleased that the turnaround plan is taking hold with steady production and growing contributions from exports. No cigar yet is what I say to Ronald. And we are seeing really very good signs in the turnaround of Leopan. And thanks also to Transnet for delivering on their promises to make sure that we could possibly increase the exports from Leopan. And you'll see the benefits when Rian goes through his numbers. Total coal sales up 4% to 19.9 million tons. Caroline, where is 20? supported by higher ESCOM sales and strong export performance. Sales to ESCOM increased by 6% to 14 million tons, mainly driven by the exceptional performance I spoke about on the ramp up of the new mine one at Matla. Importantly, coal export sales increased by 15% to 3.9 million tons. We guided on eight for the full year, and we are on track. Supported by improved rail performance and our effective use of alternative logistics channels to evacuate our coal from the mines to the port, as prices do support the margins we can make out of that. If you look at this slide, we are particularly pleased, as I said, with the Leopard turnaround. You can see the movements, and you can see it's in the right direction, reflecting the progress that we are making in that. Through our market to resource optimization initiatives, we were able to switch between domestic sales and export markets in order to maximize on profitability as we saw export prices much higher. So you will see that domestic, even though down at 14%, is because the much more profitable market of exports is actually up 15%. Metallurgical coal cells were a lot lower, and this really reflects the weak demand we are seeing in the domestic steel and ferrochrome industries. As we see Eskom coming to some agreements with some of the ferrochrome producers, we expect the domestic side to possibly, particularly the metallurgical side, to possibly pick up as well as those furnaces pick up over time. Let me touch a bit around our production, particularly the challenges with the water bag, but really a strong export performance in a bulk commodity business. The key value lever after production is logistics. Whether it's manganese, iron ore, or coal, the next key value lever is our logistics. We continue to see encouraging improvements in rail performance. At an industry level, coal volumes railed to Richards Bay improved placing this system on an annualized run rate of about 60 million tons. So we continuously see step change in the performance of Transnet. And as highlighted, this improvement supported our own export performance, which went up 15%. And in Pumalanga, our tans railed directly to Richard's Bay, remained basically steady, as we focused on wanting to evacuate more coal from Kroot Kelak. And together with Transnet, Our teams worked flat out to deliver a bit more, and despite all activities, we achieved a 50% improvement in direct rails from Krutkalak to Richards Bay. This ensures that we can reduce road transport, which is impacted by diesel. And so what we see is that if you can rail direct from Gigi to Richards Bay, it's almost a two and a half to three times benefit on profitability and margins. So that's why I'm really pleased to see the kind of 50% improvement. Obviously from a low base, we also would remember that we had a two-week wash away where the rail was washed away by rains last year. So including all that, we have seen a fantastic improvement of 20%. If you compare just the last half of last year to this year, both halves had no... wash away, and we still have an improvement of 20%. The Richards Bay multimodal system, which will continue to utilize, especially at current prices, also improved by 20%, even though a half on half from last year's second half, it dropped by 14% as we became conscious of the increasing diesel costs. In the meantime, our teams have continued to demonstrate agility in getting our product to the market, making use of all these alternative and multimodal logistics systems. While these channels provide viable and flexible options, we have enabled ourselves to increase our export volumes, and they come at higher cost if you are going to be running by road. We are pleased with the progress of making 50% improvement of direct railing from Waterberg. However, we are still seeing, we still need a lot more improvement. And further improvement on the water bag line remains an important export lever for Xaro to unlock the additional export volumes that I know we have and have been promised from our operating teams. And this will continue to deliver improved cost efficiency of getting our coal to the seaboard market. During the first half, we saw softer demand from India, reflecting a little bit of higher domestic coal production in India, continued weakness of the steel sector in India, but also a much higher coal import costs and when the costs go up, they tend to slow down in what they buy from outside. However, the strength of our diversified cost base and our market to resource optimization teams has enabled us to respond to these dynamics. So our sales increased in Japan, where our premium product, low sulfur, high energy remains a sought after product. While on the Asian markets, particularly Taiwan, We also saw a contribution positively to our export performance. This reflects the strength of Xaro as a cold brand and has established a position where our customers see our products as premium in our key markets. So importantly, you will see that RB1, Richards Bay 1, represents 88% of our export sales mix during the half. Compared to last year, we actually did not sell any RB2. And you could say, so what happened? Actually, because we produced very high energy coal from GG, we can move less volume from there, bring it to the lower RB2 in wet bank, and blend it to deliver RB1 to the market, which sells at a much higher premium. We achieved an average realized price on export of $96 per tonne, reflecting a 91% price realization compared to the API4 benchmark price. This price escalation reflects the mix of the fixed price, but also the index linked contracts that our customers tend to prefer in terms of low prices, but in terms of high prices, they tend to prefer fixed price. Our market resource teams allows us to respond with agility, and I think we continue to do that. And RBCT, as I said earlier, remains our preferred and most cost-effective route to the market. A bit of coal well covered, let me move to our next business pillar, Synergy, the energy business. Synergy also delivered a solid operational performance. The key milestone was the Le Palale solar plant that I spoke about earlier, reaching full commercial operation on the 21st of April, adding solar generation to our existing wind portfolio. The solar plant at Le Palale contributes 30% of the mine's energy requirements. This has in a way reduced our carbon emissions by 22% on that mine and given us electricity savings of 100 million runs a year. The total renewable energy generation has increased by 12% with the LSP contributing 66 gigawatt hours. Wind generation was lower due to weaker wind conditions in the Eastern Cape. although planned availability was up and strong at 98%. But the benefits of now having wind and solar dovetails our performance such that you continue to see an improved performance in EBITDA numbers as well. The Career Boss construction project continues and is in progress with commercial operation expected in the first half of 2027. And that remains on schedule, on budget. Touching on manganese, the new kid on the block, and contributing both to improving safety, production, and improved pricing that we saw in the manganese, these slides highlight the performance of Tzipi Borowa Mine, in which we acquired 50% interest on the 27th of February, 2026. For illustrative purposes, all the operational matrices that you see under manganese are presented on this slide on a 100% basis, for the respective periods so that it's comparable, even though in our books manganese only represents four months of performance since we acquired it from the 1st of April. They improved LTRFR by 52%, reflecting the operation's ongoing commitment and conviction to maintaining safe and disciplined working environment. Production volumes up 11% and the increased production was deliberate response to the favorable market conditions that we saw. Sales volumes, however, declined by 5%. Mainly this was driven by the record sales we had in the first half of last year as a result of the prevailing market conditions at that time. Despite this decline, sales volumes remain robust and the CRF prices for the high-grade semi-carbonate manganese that we produce increased by 18% to $4.64 per DMTU. On this note, we are very pleased with our long-life asset, cash-generative manganese business. that is now in the house for Exaro. In particular, for the long life that we have, we believe that the long-term fundamentals of manganese remain robust and we're very pleased that we have it now in the house and our prospects around that continue. So let me hand over to Koppes so that he can take us through the financial highlights. Thank you.

Thanks, Ken. Good morning ladies and gentlemen and it's again a pleasure to present the interim results for the six month ending 30 June 2026. So on the first slide I'm going to look at the operating performance of the group. Just to note, to ensure comparability across the reporting periods, the figures presented in this section are based on the IFRS results adjusted for headline earnings items, and the reconciliation is included in the supplementary slides. So starting with the group's overall performance, you can see the first two graphs on the top left illustrate the performance of our own managed operations. So revenue increased by 7% supported by Thank you very much. Demonstrating the resilience of our operations despite the inflationary pressure. However, if you compare it to the second half of last year, you can actually see that EBITDA increased 22% from the previous half year. So turning to the chart on the top right, which reflects our equity-accounted investments. Equity-accounted investments declined significantly during this period, primarily attributable to a 781 million reduction in the contribution from SAIOC, where earnings were negatively impacted by lower realized selling prices, mainly resulting from the stronger RAND. Black Mountain also recorded a weaker contribution, reflecting higher mining costs and the slower than anticipated ramp up of the Gamsberg II project. This was offset by the first contribution from our investment in TP, which added 242 million for the four-month period. So further detail on the equity investments is included in the supplementary slides. So despite operating in a dynamic and challenging market environment, the group generated cash of 6.1 billion and as a result we closed the first half at a net debt position of 1.4 billion, including the Synergy project financing. I will provide additional detail of the cash position later on in the presentation. So overall the performance of our managed operations together with the contribution from our investment portfolio resulted in headline earnings of R13.77 per share, representing a decline of 20% compared to the prior period. If we then look at the IBADAR waterfall graph, Starting with the price impact, you can see export prices realized in the first half of this year increased by $8.70 per ton or about 10% broadly in line with the higher API4 benchmark price. This benefit was partially offset by a decline in our price realisation, which decreased from 96 to 91%. In addition, there was stronger pricing in the domestic market to support our revenue generation. If we look at volumes, export volumes benefited from the improved rate and road logistics from the Waterberg. As Ben mentioned, the first half of last year, we also had the impact of the rail wash away. These improved logistics enabled higher export volumes through RBCT and also increased overall exports. In addition, Leupont's sales were positively impacted by the establishment of the Navitrade alternative export channel. As a result, export volumes increased 15% in the first half of 2026. Looking at inflation, so inflation continues to have a big impact on our business. As you can see there, the diesel impact on our specific mines, the cost increased by 25%. Electricity, the tariffs increased by 10.6%. And labor cost on average increased by 6.3%. Other operating costs generally track PPI, increasing by approximately 4.5%. Beyond inflation, several other cost factors to consider, so selling and distribution expenses increased by 425 million, largely reflecting the higher export volumes. as well as also the higher diesel cost when we had to move the product by road. So even three movements had a favorable EBITDA impact driven by our production volumes exceeding sales volumes. The rehab liability adjustments were 341 million less favorable than the prior period, mainly due to scope changes, inflationary pressures, mainly at our mines in Kloosjer, Dennekel, and also at Leeuwpon. The stronger RAND, Dollar Exchange Rate, that we mentioned earlier, there you can see the direct impact of R740 million on our group IBADAR. This was partially offset by a 188 million impact from realized and unrealized foreign exchange gains on our foreign-denominated debtors and cash balances. And finally, our general costs were year-on-year lower as the prior year also included consulting and legal costs. Expenses associated with our corporate transactions, including ferro-alloys and other strategic initiatives. So this resulted in a favorable variance of 112 million rand. The Manganese EBITDA contribution will be unpacked later on. When we look at costs, we continue to focus on disciplined cost management despite the inflationary pressures, the elevated diesel prices and the increase in logistics costs that we are seeing. So if you look at production volumes excluding Mafube and Matla, it increased by 7% to 16.6 million ton, while total cash costs increased by 4.6% broadly in line with the PPI, reflecting the benefits of the higher production volumes and continued cost optimization. The initiatives that we are embarking on include benefits from the Lupon turnaround strategy and active optimization of our logistics channels and cost to ensure that the exports remain value accretive. And then also cost excellence initiatives across all our mines. Looking at the specific cost component that I want to highlight out of view. Maintenance cost decreasing by 14 Rand a ton in line with the normal lifecycle plans and also the Lupon turnaround strategy. Employee cost decreasing by 7 Rand, also reflecting the new Lupon operating model and the implementation of the operating model. General costs R6 a ton, mainly due to decreased equipment leases at Groote Geluk. We are bringing in a new mining fleet that we will also address later on. And electricity costs R1 a ton, with the Lepelale solar project partially mitigating the cost increase at Groote Geluk. Contractor cost increasing by R8,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000. Our fuel cost increased by 9 rand a ton, reflecting the higher diesel prices across the portfolio, and this remains the single largest inflationary cost pressure. So in 2025, just to point it out, diesel cost for the group fuel cost is about 2 billion rand. So any increase has got a major impact on our cost base. and as pointed out earlier, the rehab related adjustments at Leupon and Dernekel increased unit cost by 20 rand a ton. Then very important, logistic cost, 23 rand a ton. Mainly due to the higher export volumes and also the impact of diesel cost on road transport. Remember on road transport, diesel is probably your biggest driver in those contracts. So although the alternative export channels come at a higher cost, they remain value-accretive with logistics decisions focused on moving products that maximize value and margin for the company. So costs remain under pressure from elevated diesel prices and alternative port routes, however, ensures that we actively manage these costs by prioritizing exports directly to Richards Bay. We do collaborative contracting, market testing, and also ongoing optimization initiatives. On the next slide, we'll look at the metals business. So as Ben pointed out, we acquired the manganese portfolio the end of February. This includes a 100% investment in the Manganese Marketing Company in Singapore, so basically TP Mines sells our portion of the production to the marketing company that on-sells it then to the end customer, very similar to our coal marketing company in Switzerland. and then also in these numbers are 51% investment in TP which we pointed out is equity accounted. So the numbers included for a four month period from March to June. So if you look at the EBITDA line, the marketing entity reported a positive EBITDA of 28 million for the period. And as I pointed out, driven by the sale and marketing of our share of the TP ore production. This was offset by a day one fair value loss of 179 million recognized on the investment in Jupiter Mines reflecting the impact of the share price and the exchange rate on the effective date of the transaction when we acquired the asset and then the balance of that is once of transaction cost paid during the period. Looking at the performance of the equity-accounted investments, as pointed out, mainly impacted by SCIOC due to a big impact of the exchange rate on the sales price that was realized and also higher production costs. associated with the conflict in the Middle East. Equity income from Black Mountain negatively impacted by the delayed ramp up of the Gamsberg project. As pointed out, Exaro's 50% interest in CP has been equity accounted for the four month period following completion of the transaction and that is the 242 million that you can see. During the period, we received dividends from our investments, 1.4 billion from the equity-accounted investments, mainly from SAIOC, as well as 100 million from the newly acquired investment in TP, as well as a 26 million dividend from the investment in Jupiter, which is listed on the Australian Stock Exchange. Looking at capital allocation, so our capital allocation framework remains disciplined and consistent and as pointed out we continue to target the net debt to EBITDA ratio below one and a half times excluding the synergy project financing. So this approach preserves our balance sheet strength while maintaining flexibility required to execute on our strategic priorities. As previously highlighted, during the first half we generated $6.9 billion in net cash inflow, comprising $5.4 billion from our own owner-managed operations, $1.5 billion received in dividends from our investments, including $1.3 billion from SCIOC, $100 million from TP, and $75 million from our Mafube joint venture. In line with the capital allocation framework, we deployed the capital across the business to support the operational sustainability, our growth initiatives, and also shareholder returns. So 1.4 billion was invested in sustaining capital for the coal business, ensuring asset reliability, continuity, and safe production. 3.4 billion was returned to shareholders through dividends. This comprises 1.3 billion from the pass-through of the SCIOC dividend and 2.1 billion distributed from our core group earnings excluding SCIOC. We invested 10.6 billion in the manganese acquisition, further strengthening our portfolio and positioning the business for the long-term value creation. And we also settled 2.5 billion acquisition debt that we acquired. A further 864 million was invested in expansion capital, primarily relating to the completion of the remaining work at the Lepalale solar project and the continued construction of the Carrierbos wind farm. The other cash allocations include R337 million for the acquisition of shares to settle vested share based payments and R100 million on deposit for our insurance program. So as a result of these cash flows and capital allocation decision, we closed with a net cash position of 6.4 billion and if we exclude the energy, excluding the energy business net debt of 7.8 billion Rand. Looking at capital expenditure, sustaining capital mainly in the coal business, and this, as I pointed out earlier, is primarily driven by Groote Geluk, where we are in the process of rolling out the new truck and shovel replacement program. The increase is intentional and value-accretive, supporting the long-term sustainability of our assets and also ensuring asset reliability to underpin future earnings capacity. Turning to energy, the project cost at Lepelale Solar, 160 million was invested during the first half to complete activities ahead of the commissioning of the plant in April. And during the same period, we spent 704 million on the Carrierbos wind farm, which remains on track for completion in the first half of 2027. So our energy projects are typically funded through a structure comprising approximately 75% project finance and 25% equity funding, optimizing returns while maintaining disciplined capital allocation. The project finding is normally drawn from the outset of construction with our equity contributions weighted towards the latter stages of project execution. Importantly, as Ben pointed out, all the project financing is structured with limited recourse to Exaro's balance sheet and is hedged through interest rate swaps providing certainty against any interest rate movement risk. Last slide, the new dividend policy. So our increased confidence in the group's diversified earnings base, the balance sheet resilience, and long-term cash generation resulted, as we pointed out in the Capital Markets Day, in two enhancements to the dividend policy, the removal of the 12 to 15 billion cash buffer, and the revision of the dividend cover to 1.5 to 2 times or a 40 to 67% payout ratio whilst maintaining the 100% PSYOC pass-through. So the intention is future growth in future will be financed through internally generated cash flow also supplemented by the debt facilities where we raised it in the group earlier on. So I'm pleased, as Ben pointed out, to announce that the board has resolved to pay an interim dividend of R7 per share at an overall group cover ratio of two times. This includes a pass-through of the SIOC dividend. If you look at the R7, R2 is a SIOC dividend. and reflects a cover of 1.8 times on Exaro's adjusted group earnings. The graph on the right depicts the quality of our shareholder returns and you can see there the enhancement due to the new dividend policy. So the final dividend end of last year The enhanced dividend from the new policy, R2.93, and this time around R1.43 per share. So with this, Ben, also from my side, thanks to everybody at Exaro that made the results possible. Whether you are at one of the mines, at one of the wind farms, here at the corporate center, also thanks to my finance team. Long hours, hard work, but thanks. Thanks, we were able to deliver these sets of results.

Thank you Rio, really wonderful set of results and thanks to everybody. It's a great opportunity for us to be showcasing while everybody else still has to deliver in the operations and the plans. But so as we look to the remainder of the year and the geopolitical environments obviously remains uncertain, Tensions, particularly the ongoing conflict in the Middle East, continue to create uncertainty across both commodity and energy markets and have an impact on inflationary factors and also shipping rates. We have an emerging risk. I think we all know the local government elections are about to take off now, while the domestic operating environment in South Africa really continues to show improvement. Whether it's from our two networks of ESCOM and Transnet and the current account of Treasury, it's really pleasing to see those numbers and the flexibility and the improvements that we are seeing. These dynamics present both risks and opportunities for Exaro, reinforcing the importance of our operational excellence The importance of cost discipline and the flexibility that we have in our portfolio and as we diversify the portfolio. Again, as this backdrop, the strong operational performance delivered during the first half clearly positions Exaro well for the remainder of the year. And we therefore reiterate our coal production, sales, and coal export sales in line with the guidance we gave including the sustaining capital requirements when Rhian spoke about the truck and shovel project at GG. Compared to the pre-closed guidance of 830 megawatts to 860 gigawatts hours, we revised our renewable energy generation to 800, between 800 and 830 gigawatt hours. This is mainly due to the weaker wind resource conditions that we are seeing, and thankfully we have the dovetailing nature of solar that I spoke about earlier. Importantly, and for the first time, our guidance now incorporates manganese, reflecting the growing contribution of our metals business pillar to our diversified portfolio. As I highlighted and we said this at the capital markets, we're finalizing the feasibility study to replace our ERP system and look at all the options because really we are seeing opportunities of innovation, reduced costs to the extent of a lot of systems and IT systems we would have. And our current system is a legacy system and we are assessing the potential and replacement opportunities that we may get out of that. without compromising shareholder returns. Overall, we remain focused on disciplined execution and delivering against our full year commitments. I would really like to reflect for a moment on the positive social impact your organization continues to create. Our strong performance during the half extends beyond just financial and operational results. We continued as we have done over the past two decades to create value for all our stakeholders. I spoke about CCG being with us and for completeness Geraldine Fraser-Moliketi as chair of our SEC committee. This is an area of focus continuously in terms of when we sit at the subcommittee and in the full board. During the first half, we created approximately 10 billion rands value across both for our employees, our shareholders, government, and our financiers. Alongside the 1.4 billion rand in social impact spend on our host communities and also our lab ascending areas. We opened in Kofimvaba recently our ship sharing project which really has provided some much needed opportunities for our lab ascending area in the Eastern Cape. We maintained, I thought Anda would clap because I think that's his village. We maintained our level 2 triple BEE status and strengthened the long-term sustainability of our coal operations through the improved and amended Belfast Integrated Water Use License that I spoke about earlier and also the signing of the Matla Coal Supply Agreement with ESCOM. These all support jobs and the economies of our host communities. We delivered strong environmental performance with the LSP as I spoke about the solar plant contributing improved carbon intensity and improved energy intensity in reducing costs. These outcomes reflect our continued focus on delivering positive social and environmental impact while creating the long-term value for all our stakeholders. I particularly like the next picture. Let me assure you, it was not AI-generated. It might be African intelligence, but it's not AI-generated. It captures the co-existence of coal-fired power generation and renewable energy in our just energy transition. That's a picture at Kroot Kalak with a coal-fired power station in the background. and our 129,000 panels supplying 68 megawatts to GG. This is the reality of our country's energy future. A diversified mix and Xaro is well positioned to be a market leader in both. Our diversified natural resources business has delivered during the half. and that's why we call ourselves natural resources. Mining, wind and solar. We achieved our best saved record which expectantly delivered stronger production performance across the business within the cost inflation I spoke about. The coal business EBITDA went up by 5%. The renewable energy business went up, the EBITDA went up by 2%, contributing to the essentially flat EBITDA that we showed you earlier, mainly impacted by the investment or call it once-off acquisition costs in manganese. We are seeing the early results of our strategy execution from the performance of the coal business to the growth of our renewable energy and for the first time to the manganese contributing both to income and operating contributions. and as I said, our once off transaction costs masked the great production, especially in coal, renewable energy and manganese. Our balance sheet remains strong and we continue to apply our capital allocation framework with discipline. Not only because some people we have here have got deep pockets but extremely very short hands on the left. Giving us really the flexibility that we need to track the consistent returns to our shareholders that we need while still funding the strategic priorities. Koppes, thank you. Allow me the opportunity to thank again, as Rhian said earlier, our fellow employees for a job well done. We did it safely, and that is most critical to me, your chief executive. and we had excellent production. You contained your costs despite the pressures of diesel to still be within cost inflation. Indeed, I am proud and pleased that we continue to do the best work of our lives at Exara. This is who we are today. If I was to share with you the contribution of our growing energy and future facing metals business, we want them to account for over 50% of our group earnings by 2030. This way it will reduce our group carbon intensity. but for the first time we have Mangani's family part of that picture. So today coal contributes around three quarters of those group earnings and by 2030 we expect that to be below 50% not by reducing coal but by growing the other buckets. And as I said, ultimately reducing our carbon intensity as we aim for our carbon neutrality by 2050. This slide 29 really anchors our strategy in the three pillars of coal, renewable energy, and the future-facing minerals. Ladies and gentlemen, this is Xaro today and this is the business we are building for tomorrow. A diversified natural resources champion, not only providing the earnings and reducing carbon intensity, but providing the career opportunities of many young and upcoming people to make sure that we remain a key driver to our country's economy. We are anchored by long-life, high-quality and cash-generative coal business, a growing renewable energy business and future-facing metals that are built globally with a significant manganese exposure I spoke about. So as we look ahead, we will continue to anchor our coal business and we'll continue to drive in line with our prudent and disciplined capital allocation. underpinned by our people and the conviction to achieve zero harm and to do this ethically. To do this ethically. These three business pillars of coal, renewable energy, and future-facing metals position Xaro continuously as a consistent dividend payer sustained for growth. And we thank you for your attention this morning. Thank you very much. And I'll be joining us now to take us through any discussions, questions, and answers that you may have for us. Thank you. Thank you, Ben. Thank you so much.

Thank you. Thank you so much, Ben. Thank you, Rian. We are now going to go to the Q&A. And like we always do, please raise your hand. We have roaming mics in the room. We're going to start in the room. Please remember to introduce yourself and the company that you represent. Before you ask your question and then I'll recognize you. And then from the room we are going to go to the online platform and please remember to also post your questions there and we'll read them out here. And thank you so much. I think we have a question from Tim Clark.

Thank you, congrats on the result. It's Tim Clark from SBG Securities. I've got a few questions. Just let's start off with the Waterberg rail extract. Really good numbers coming out of exports out of Gigi. At the Capital Markets Day, my sense was that you were a little bit worried about Transnet coming down from Gigi to Urchis. The results seem to be better than that. So I wonder if we could just get a bit of an update on the outlook for rail out of Urchis. My second question is really just on India. It's quite low in the mix compared to a couple of your peers out of South Africa, and you grew quite strongly in Japan. So I wonder if you could give us a couple of thoughts on the coal that you're producing, the marketing that you're doing, and then maybe if we're lucky, just because the markets are so volatile, What you're currently seeing in the market, what your sense of coal demand is at the moment. And then my last question just on manganese. If I look at the cash flow statement and I add up all the numbers that have got note 22, which is the acquisition of manganese attached to them, I get to 12.95, so let's call it 13 billion rand, which was a bit more than I expected in cash outflow for manganese, for the chippy part of manganese. So I wonder if you could talk to us just about that and how much was spent. Maybe there was some adjustments there that I don't understand. And then secondly, just a bit of an update on Makala, if you could. Just what's happening, what you're expecting in terms of closure of the final leg. Thank you.

Thank you, Tim. Thanks, Tim. Rian will touch on the Manganese and Mokala. Let me just go through your write-about, our concerns at the Capital Markets Day on Hrut Halak. and I think those concerns are bearing fruit and it was simply more to give a sense of what the priorities were and how focused our teams were to get that C-section line going. And I must say that the performance of the joint team that we put together between Transnet and Exaro to drive that performance has been very commendable and that's why you see the improvements. Never mind the fact that we had a rail wash away last year, We continuously see that improvement even if you compare the second half of last year to this half. There is continued improvement and focus. So if you estimated around the number of trains per week, by the time when we were talking we were possibly playing around three trains a week. We are seeing now, growingly, four or five trains a week. Our aspiration is to get to seven, even higher. So there's no cigar yet, but I think we are very pleased with the progress that we have made, Tim. So maybe that covers on the logistics side, because the more we can do that, obviously, you know it, that the most profitable route is Richards Bay. And especially if directly, So we continue to put that effort, and I'm very pleased that as much as our WhatsApps keep ringing with Transnet, we're actually seeing it in the numbers. So that's very pleasing. On the marketing side, I think the volatility of the prices, and especially when you start seeing prices rising, never mind the fact that India has lower steel demand, and they have produced more locally in India. So it means they've needed less coal. But whenever we see high prices, the Indian customers tend to withdraw to some extent. So you will see that if you compare, as you said, around the peers, that the price realisation of Xaro is possibly north of 90% and the price realisation of peers, as you put it, is a lot lower than 90%, which means they're possibly still selling into a much less profitable market. But our teams and Fortune and Saki and Leicester they work hard at looking for alternatives so what we saw in Taiwan and the growth you have seen in Japan has given us real comfort that and because they are more the Japanese market is more sticky and once you have a premium product that they can have a life of mine kind of approach we saw almost record tenure of contracts in Japan and for competitive purposes I won't say the number but I think that it's very helpful to see Japanese and Taiwan growing because there they need the RB1 and we have that with our product mix and we've been able to take advantage of that with a much higher price realisation than our peers. Thanks Tim. I hope that covers those two and Koppes will cover the Manganese questions.

Yeah, so on Mukolo, the agreement to have Glencore, I think it's progressing well with We have reached agreement on most of the outstanding issues. So hopefully we should be able to conclude that and put it to bed before the long stop date that we indicated to the market. I think it was February 2027. So that is on Mukalo. Then on the cash flow, the 10.6, so remember included in that cash flow was 1.5 billion for Jupiter, about 1.5 billion for Mars, The Hot As Hell, the 9% in Hot As Hell. And then the balance will be TP Mine and then also the marketing company. And then the 2.5 billion is actually almost an in and out flow because we refinanced that debt in the company subsequent to 30 June. Just to give context on that. Thanks, Rian. Brian?

Give to Brian.

Thank you very much. Brian Morgan, R&B Morgan Stanley.

Just two questions from my side. First is, Rion, you left about 4 billion rand of cash on the balance sheet. Is that the new cash buffer, the new 12 to 15, or is that more color? No. Maybe just chat to us about that.

Yeah, so remember even at the Capital Markets Day, I think at the Capital Markets Day the cash was more or less at the same level. So we said the cash on the balance sheet is earmarked for Mukala. So MUCALA, really the maximum, depending on whether the tag along rights, et cetera, are exercised is four billion. The TORO acquisition on energy is 1.8 billion. or 1.9 billion, that still needs to close. And then our equity contributions for Career Boss and also the other energy transaction is about a billion rand. So what we then say is then the intention is to run the business cash free, debt free. So you only really get into debt if you do acquisitions or growth.

Thank you, and then just the next question, just further on that Waterberg rail, the C-section story, could you flesh out a little bit about what's happened, is it signalling, is it more loco, is it more train sets, just maybe a little bit more granularity on, because it's a big prize, right?

It is indeed a big prize, Brian, I think predominantly it's operating efficiencies. Cycle times for the trains. And if you improve cycle times, you can get more trains on it. And because it's a bit of a distant setup, the prioritization is possibly much better in the Mpumalanga area for Transnet. And once you send a train more to the Waterberg, it takes a bit longer. So having improved some cycle times, operational efficiencies, I think we didn't have a wash away, as we said, for this year. So there is also some underlying operating and fixing of infrastructure, but predominantly it's a lot to do with improvement of cycle times and increasing of the number of trains per week, which, as I said to you, we're lying somewhere around two, three, now they're sitting around four, five. And if we can get another improvement 5, 6, 7, then I think we continue to be on the right path. We know the export optionality of Xaro and GG and we still have a lot of scope to do that. Thank you, Ben.

We have another question from Tobela.

Okay. Morning, everyone. It's Tobela from NetBank CIB. I've got two sets of questions. I'd like to start with Cole first and then get your answers and then come back again. So the first one on coal is just with regards, again, I think this Waterberg story. With that 50% improvement, where does that put you in terms of your capacity for that Waterberg rail capacity? Where does that put you and how far are you to maxing your capacity there? And then the second one is on your realized pricing, which was 5% down relative to previous reporting period. It is a bit surprising, especially given that you have increased your RB1 contribution. Can you just maybe give us more clarity as to what is it about marketing and your realized pricing that occurred in this half? Thank you.

Thank you, I'll do the sea line and then you can pick up on the realized prices, I think. Then, the Waterberg line, that sea section has about 3.9, if you are real, I call it four million ton capacity. And of that four million tons, there's some sharing between the ferrochrome industry and the coal industry. Because that line comes through Amunderbold, Rustenberg, then down. If you look at what we could do there, there is no doubt from, if you look at the period of Russia, Ukraine, we moved a lot more. So if you say the half we produced, we moved 600 million tons, we moved 600,000 tons there right now. And... You can multiply by two and you get to 1.2. Can we get even higher? Absolutely. So we think that C-section line still has so much to go to the four million ton capacity of the rail that it has got. It's possibly sitting at about a half right now as we speak. And we take a portion of that. So the work that we are doing with Transnet, with the Minister of Transport on both the public sector partnership and the customer collaboration program with Transnet is geared and you are aware of those train operating companies that were brought in. So there's opportunities given the appetite to privatize and to also bring in More players. And we're talking to a few of those players to see how we can improve over the long term. In the short term, I think we have that scope as we talk about possibly move from five trains a week to about seven trains a week.

So on the 91% realization, what you will normally see when the market goes up, certain customers don't want to lock in the price. They want the fixed price. They don't want to be exposed to the index because you obviously only sometimes settle the contract later on. So in an increasing cold price environment, customers tend, some of them, to want a fixed price. And then in a declining environment, you'll see vice versa, where the customers wouldn't want fixed term contracts or fixed price contracts. They would like to have index-based contracts. So I think it's that dynamic.

On Manganese, I think your production there was quite strong. Could you just talk to us as to what would you think is your normalized level? I'm saying strong because We know that there's been heavy rains in the Northern Cape and some of the producers within that province have struggled when it comes to production. And then final question is around, I guess, your EBITDA, even if one strips out the one-offs that you spoke to, I don't necessarily think it does speak to your sort of first half cost curve type of operations. Could you just talk to us as to, now that you have sight of the operations, what do you think about the manganese operation? Because I think at first glance it doesn't seem as though they are as good as perhaps initially thought. Thank you.

Right. Okay, so it's production and then the EBITDA in manganese. Okay, perfect.

I think the production numbers we have guided quite clearly there Tobelo, 3.2 to 3.4, but noting that that guidance is sales, not necessarily production. So you may have some movements around inventory depending on what you see in terms of market conditions. Is that the appropriate kind of number? We think so. So I think a manganese business around the 3.5 million tonnes Thank you very much. I think in that environment is much bigger because obviously as much as the manganese line is doing well the logistics still requires additional or the maker entitlement is not enough and therefore there's still more road transport which impacts which gets impact from diesel. So there is still cost pressures mainly driven by diesel that comes through the manganese side. So if you look at the challenges today, I think the cost position of Tzipi, because of its high volume, really places it well on the lower half of the cost curve. We still see benefits in that and we'll continue to drive. We've got Johan here. who is nodding and they continue to drive the efficiencies that we would expect and the kind of benefits that I think Exaro's competence and capabilities in bulk mining could be transferred for the benefit of all stakeholders in that business. You may want to touch on...

So obviously also a big impact similar to SAIOC exchange rate. Remember 100% is exported. So in EBITDA type of performance exchange rate will play a big role. And as we pointed out, logistics costs. If you look at manganese, a third is basically your on-mine cost. and two-thirds are logistical cost. And what we're currently seeing in the world, so the CIF price that went up is basically mainly due to the logistic and shipping cost included in that price.

And then the EBITDA?

Yeah, that's the basis of what I'm saying.

It will flow through to... It will flow through, exactly. And okay, so I think we can... Quickly just go online, because we've got some questions here, and then we'll come back to the room. Randra Prithese from Umtomba Wealth was asking a question around your coal export mix moving to more RB1 looks like a great result. And I think the question is around the fact that we've dropped our price realisation to 91 despite this. What do you expect then going forward? Of course, we've answered the question on the price realisation. But then going forward, what are we expecting? And then a question from Chilidzi Rabada from the IDC. Many thanks for the update. There are no mention of China, of the China market in your export sales. Is this by design? And then we are getting mixed messages from Transnet of Transnet Performance, even from other players. What is Xaro's medium to long-term view on Transnet Performance? And then... The other question is on your views on coal markets. How significant is the disruption to thermal coal production in China due to the mine accident late May? Maybe I will stop there and give the opportunity, or maybe let me just take one more from Siti Shashi. He's asking the questions, could you please provide us the FY26 cash cost and maintenance capex guidance for manganese asset. What is the targeted net debt to EBITDA ratio now for the company? So I'll stop there and then just recap. It's the outlook on the price realization and then China and then long-term view on Transnet and then the coal market.

Okay, some of them. So China, you can correct me, Xaro, we don't really sell to China. So I think there's very few South African coal producers that actually sell to China. But Xaro, China is not our market. We're better placed for the other markets.

And we don't quite compete with them even in Japan and Thailand. So it really... As far as I recall, they are still net importers. So that may be checked, need to be checked. But yeah, please go ahead.

Then the impact of the explosion, was that at the thermal coal mine? Wasn't it at the metallurgical coal mine? It was, yeah. It was at the Met coal mine, so I think it's not comparable probably with the coal we produce.

There was also, as you know, there were two other blast explosions also in Colombia. But all these again, I think it's a matter of moving chairs around volumes. South Africa supply, the global seabourn market is about a billion tons and our contribution to that is somewhere around 1%. So I don't think it's as impactful to us. We see it more in the price as a basic fundamental of supply and demand.

Then I think we did answer the question on the balance sheet that we debt free, cash free basis and then to the extent that we gear the balance sheet for growth, it should not be more than one and a half times EBITDA excluding the project financing. So I think that we've covered.

and then the Capex thing.

Yeah, the Capex, remember we said at the Capital Markets Day it was included there in the business that the manganese business is self-sufficient. So remember at the moment it's still a JV. So all of the Capex is incurred at the JV level but also take into account it's a contract mining operation. So there isn't really...

I think there was a request in the questions around Transnet and how the various markets are perceiving Transnet. I think from an annualized run rate for the coal industry, I spoke about 60 million tons, which is an improvement on how they performed last year, so tick. From our performance and increased almost unrelenting focus on the Section C line from Gigi direct to Richards Bay, we have seen an improvement of 50%, again, a big tick. Are we happy with where we are with Waterberg? No, we want more. So... So yes, to Michelle, with all the great performance, we still want more from the Section C line from Gigi, even though we have done very well. Manganese, we are doing well, so I think in talking about all the touchpoints of our participation and involvement with Transnet, we are very pleased with the progress, but there's no cigar yet.

Thanks, Ben. I'll also just keep on with online. You have highlighted a 37% decline in equity accounted income, particularly from SIOC. How much of the decline do you view as cyclical from stronger rent, iron ore pricing and input cost inflation versus the structural change in SIOC's sustainable earnings power? This is from Chris Hasele from Hasele Consulting. and then the second question, if we normalize R&O prices, RAND and SIOC's cost base, what do you consider a sustainable level of annual earnings from Exaro's SIOC interest? And then Manganese, the Manganese acquisition represented approximately 10.6 billion of capital deployed. Now that the assets have contributed four months of earnings, what return on investment, on invested capital do you believe? The acquired manganese portfolio can generate through the cycle. And then there's another one. As Xaro transitioned from coal-heavy portfolio towards minerals and energy, how do you think about optimal pace of coal capital allocation? And at what point do you stop reinvesting aggressively into coal assets and instead maximize cash extraction from the existing portfolio? and then there's the question from David Fraser from Peregrine Capital. From the company's perspective, any progress on your thinking regarding the BEE share lockup expire in 2027?

Okay, perfect. Looks like it's all body questions, but whatever you leave out, I will then top up what's left.

Let's perhaps start with the BEE. We are engaging with the BEE shareholders. I think we pretty much aligned on the way forward. Remember what we told you last time, the current structure expires in December. There is a Thank you very much. and then obviously taking that into account there could always be a role for an increased ESOP or community participation in schemes like that.

Thanks, Rian. And then I think let's just do the SIOC question, this impact from land exchange rate.

Yeah, so I think I can't now speak on behalf of SIOC on all of these things, but obviously a big impact has been the exchange rate. Also what they mentioned, remember last year, the first half they had a once-off from the TFR take-or-pay and then also I think this year there was an impact from RAID and then coupled with that they are currently busy with the tie-in of the UHDMS project so all of that may have an impact on the business probably the next year or two but I can't now speak on all of that on behalf of them. Exactly, thank you. And then manganese.

Two things left, maybe the manganese returns. I think our mining returns, as we have guided at the Capital Markets Day, is around that level of 20%. And on the synergy side, our guidance is an internal rate of return of 15%. So I think those investment criteria is what we used both at acquisition and our expectations of performance within those two parameters. There was something about core CapEx allocation. I think we guided it quite clearly in our Capital Markets Day, but again, it's in line with the normalised numbers we had in 2022 in our last market guidance. We're currently going through maybe almost like a peak period of two, three years with our shoveling truck project at Gigi, but we expect that to drop to the normalized levels by 2029, 2030.

Yeah, and perhaps just to add to that, what I also understood from his question was when will we stop coal capex? But remember, we've got contracts in the Waterberg until 2054 on Mdupi. So the operations must be maintained. And then the additional angle that we get is that... With the delay in decommissioning power stations, et cetera, coal is going to play a role in the energy mix well into the future. So we must make sure our operations are well capitalized, well maintained to be able to capitalize on that.

Indeed, I think maybe it's worth continuing that Ariane because I think Caroline's song on coal is that the global energy demand is dropping, but the supply is dropping faster. The coal supply is dropping even faster. And Exaro is well positioned with nine billion tons of resource and the only operating in the 50 billion ton resource in the waterbed. So we see opportunities. And because of that, the International Energy Agency says it's likely that the global energy mix will still require coal even beyond 2050. It needs to come from responsible miners with proper corporate stewardship like Exaro. And we think we are best placed as a responsible miner to provide for that demand. And we have the resource to do that. So that is key for why we have positioned coal where it is. So we have Caroline and Tim are looking for life extension opportunities in all our operations in line with that demand beyond 2050. We are focused on logistics that we keep talking about because we know the water bay can do more. And we are focused on entitlement in order to make sure we can evacuate our coal through the export facilities. So those are the kind of three levers we know, and that call remains an important base for us and supplier of wonderful cash earnings for the growth pipeline we have.

Thank you, Ben. I don't know if we have any questions in the room. Any further questions in the room? Alexi, I see your hand is up. No, no, sir. Oh, okay. Okay. Okay, without any further questions in the room, there's one question just to rehash on the price serialization. I think just to drive an understanding, because from Lorison Mike from Lauriam Capital, his question is, can we cycle back on price realization, the 91 versus the 96 percent? Your answer implies customers can at their election revert to contract prices once prices have risen. Is this correct? If yes, why, of course. But I guess this is what now, is this correct? Maybe just clarifying.

Maybe let's touch a little bit on that and then Rian you can top up. Compared to last year, last year our realized price was $88 per ton in the first half. This year we realized a price of $96 a ton. So our prices went up. However, the index price API4 went up to $106 per tonne. When the price is on the up and trending up and the futures are showing that API4 is going up, our customers want to lock in a fixed price so that they have predictability of their cargo when it comes. So when they lock it, when the price goes up again, they continue in that manner. Hence, our realized price drops to 91%, but the price is still higher than what we have over gotten. So they tend to fix their prices. However, when the price comes down, because they potentially want to benefit from the index price coming down, they leave the price on the contract floating. and as they leave it floating, we benefit more because the realized price is actually better, so our price realization is much higher. I hope this covers it well and I know you're online, so you may not see my hands, but I hope we've covered it well.

Anything I might have left.

Thank you.

And then now we are going to go to the call. So we've done the webcast and then now we're going to go to the call. Operator, do you have any questions from the call?

Thank you, sir. At this stage, we have no questions on the telephone lines.

Thank you. And I'll just do another round in the room to see if there's any further questions. Oh, there's one question there by Dr. Korn.

Yes, it's coming. Yes, it's coming. We know you may not have the voice anymore. But that is still okay.

Thank you. I don't want to prolong this, and I'm not going to complain about the divvy, so thank you for that. I think as soon as I leave you, I'll go to the grocery store and start spending some of that. I just don't want to let you off the hook totally on this Transnet thing. You know, round figures, you said about 60 million tons down to Richards Bay where we are now. Now if you go back to the history of that facility, I can remember when I was still working, we signed off on the expansion of the terminal owned by the private sector. And the figure that we had when we put the capital in at that stage was 90 million tons. And then we dropped and we dropped and we dropped. My memory's not that great anymore, but I think we probably never got beyond 72 million. But then it went right down. What is your, if you look ahead, the next 10 years, let's say, what sort of figure do you think we can get out of this? You know, I think we must firstly, I'm not complaining, any improvement on the previous year is always welcome.

Absolutely.

And I think it being sort of Women's Month, it just shows you put a woman in charge, you get things done. But the thing that's been worrying me for years is that we spent the capital, and as I say, I still signed off on the capital on behalf of our company for 90 million tons. I think it's probably a pipe dream, 90, but has the industry got any collective view of where we can get to and what are the main impediments? Because if we can get transport right in this country, South Africa's going to look a lot different. There's a couple of others as well, but the transport one worries me.

Thanks, Dr. Cohn. You're right about the 91 million tons. I was the other side when me and you signed for out of the city to go up to 91 million tons per year. I don't think they ever, I think the most they did was about 75, 76. And I think we already had expanded the plant to 76. which was the phase four of RBCT. The phase five was to take it to the 91 million tons which we did and we have spent the money. Transnet in all the challenges went down to 48 million tons a year and have been going up in steps between five to 8% improvement year on year thanks to Michelle Phillips. So we have seen that now at 60. If you were asking for my own predictions of the coal industry's performance, not just Exaro, I would think that we might still be able to get to the 70, 75 million tons. I am not convinced that the coal industry can supply beyond 75. However, Exaro can. So the opportunities we have is that we have enough resource to supply one to our entitlement and to possibly crouch in others entitlement should they fail to meet that and whether through buying it or leasing it. So I really think our resource and what Caroline's team are doing with life of mine extension, how do we, continue to really get close to get it right. So call about women in charge. Michelle and Caroline can help us get there. So I'm really pleased with the efforts of 5% to 8% year on year. But as I said earlier on, no cigar yet, but I don't think the coal industry as a whole will get beyond 75%. So it is sad, but at least we can continue to benefit. If the coal industry can't, and Transnet wants to go to 80, Exara has got the volume.

Thank you. Thank you, Ben, and thank you, Rian. Okay, we have another question from Babunko. Another pensioner here.

Sure. And I think you know the answer. The new structural reforms, it's about what companies themselves can do for themselves to get higher. So it's no longer going to be reliant on just Transnet doing that. The question is, what efforts is Exaro going to be taking to say, you know what, in the last path, especially on Khorokhalik, we did a very good deal with Transnet at that time to increase the number of trains per week on the basis of us putting capital and them putting capital. But now the question is, are we prepared to put in the capital? Because now the reforms are going to allow us to do that, to be the masters of our own destiny on that sea line. And I think that's the real question, is that no longer are you going to have to say, well, it's Transnet's job, but we have the opportunity because the reform allows us to do that. I think that's what the question, Dr. Cohn, and I'm also asking.

Fantastic, Emix. I think you're so right about the opportunities that the sea line provides for Exaro. And especially that we're the only operating asset in that area. There are even conversations around how do we extend that rail into Mamabula in Botswana. But let's stick to our own knitting and what we can do with it. We are pleased with the privatization and the liberalization of Transnet and railing capacity in the country that the Minister of Transport and Transnet are driving through both the PSP and the CCP processes. We are in engagements with train operating companies that have been already picked up and we think that process needs to be fast-tracked. The benefit for us is we explore and we'll see how it works with parties, but the benefit for us is to have train operating companies, because we are not competent at running a train. So have a train operating company, give them an off-deck agreement, and they will get money. So the key for us, yes, we can consider a level of funding that our pensioners continue to get their benefits, their returns, but most importantly, if you can give any train operating company assurance of 15 million tons of tech, any bank can fund that. So we believe that we're taking it in our own hands and we really believe there's opportunities in there. We actually wish the process to be fast-tracked. They are all equally, we have done a research, how much money did we put in the study to understand how do we get to four million tons? How do we double, how do we treble it? And we, as Exaro, have funded that study because we know that the export optionality we have differentiates us from any other player. MX, on the money. Thank you.

Thank you, Ben. And thank you, ladies and gentlemen. Thank you so much for joining us today. Without any questions, we've come to the end of our session. And thank you for your continued partnership on behalf of Exaro. Thank you so much.