Boliden — Call Transcript 2016

Speaker 16: Welcome to everyone here in Stockholm for Boliden's 2016 CMD, and also to those joining us live via webcast. My name is Sophie Arnius. I am head of investor relations and will also be your moderator today. We have a full program ahead of us with participation from our executive management team. There will be opportunities to ask questions throughout the event. Safety is a top priority for us here at Boliden. Please note that the emergency exits are located behind you and also in that direction. When we last met here in November 2014, our world looked very different. Copper prices were at almost $7,000 per ton, zinc at $2,200. Our sector has experienced some challenging months since then, to say the least. I hope that after today, when our management has talked through their strategies on continuing to deliver strong and stable performance, that you will find Boliden to be well-positioned in this market. We believe we have a strong message, which differentiates us from our peers. Our CEO and president, Lennart Evrell, will now outline his plan for Boliden for the coming years, and importantly, how the recently announced acquisition, Kevitsa, fits into that plan. Lennart, please go ahead.

Speaker 9: Thank you. A very warm welcome to you all. It's amazing times in our sector, certainly. Boliden is delivering strong performance at a time when most comparable companies are in big crisis. The theme of today and tomorrow is stability. What we can do in order to generate good values for shareholders and prosperous or stable long-lasting success, is to work on the organic growth story. A journalist was just asking me, "Lennart, with Kevitsa and Kylylahti before that, are you changing your strategy?" I said, "No." What we are doing is to buy and make sure that we have the geological conditions for continuing our technology and our development, which is essentially organic growth. We are today going to talk, and Kerstin will talk about the smelters and why we work with complex materials. We can get better prices, better margins, if we buy complex materials. We are well equipped because we have been in complex materials since ever. We are doing also investments, the silver recovery in Finland, the nickel strategy that we changed last year was the first step in a new nickel strategy, where Kevitsa obviously comes in. The investments in Rönnskär, where process development is continuing on the third year of this action plan, and the debottlenecking programs we do at Odda, which we will see tomorrow. In mines, of course, if there is a weak spot that you have been seeing or feeling over the recent years, it has been the lack of availability of some of the equipment at Aitik. Mikael is going to take us through why we have spent some more time in trying to delay some investments, make a focus change here from volume to availability of the equipment, because it is the lack of availability that has sometimes created some problems in Aitik. Mikael is also going to talk about technology development, which is certainly the foundation for organic development. I'm going to give some additional ideas on why we bought Kevitsa and allow for a Q&A on that one towards the end. If we look at our profile, we are in the Nordic countries, a low-risk area, and all our units are quite close together. Many other companies have the assets spread around the world. It's in an area where copper, nickel, zinc is available, but the more east you go on this map, the more nickel you find. With more focus on Finland, it's natural that we expand our strategy in nickel. We have world-class productivity in several assets, and certainly Garpenberg and Aitik having the highest productivity in the world. We have a balanced mix of metals, with base metals and precious. If we look at the focus in parallel with the organic growth, of course, safety and environmental performance is a foundation of everything. We do not believe that environmental performance or safety is in contradiction to stable production and low cost. On the contrary, by driving the safety issues and aspects of the industry or of us and the environmental performance limits reduces the risk of unplanned stops. We think that that is a way to further enhance the corporate culture and the productivity development. The strategy for value creation is the integrated business model. This year we are, or in 2015, we have been earning most of the money in the smelters and less in the mines. During the years before that, we were typically earning more in the mines and less in the smelters. We think it is a good balance over the cycles, we have significant synergies between the two as well. For example, in the case of Kevitsa, I will talk about that. We think that operational development step by step is important. We think that the technical development and execution is vital, and finally, the corporate responsibility in a broader sense is very important for us. As an example of the long-term development, we can look at the total shareholder return on 1, 3, 5, and 10 years. Of course, with the latest decline in the metal markets, it's on an absolute scale, not very good numbers in the most recent times there. We are out-competing our industry in pretty much any time you are looking. If we, from the long-term development, have a look at, okay, what about the most recent development? Let's have a look at 2015 and what we have accomplished there. First of all, we analyze the Garpenberg investment. I think Garpenberg is, if anything is making me proud, it is this project. We did SEK 1.4 billion in EBIT last year, which was the first year of operation after the SEK 3.9 billion in investment. We acquired Kylylahti in Finland. We took a very big strategic step in Harjavalta, the copper nickel smelter, where we before regarded nickel as a byproduct we did for someone else. We brought it into a family as one of our main products. What we have done or presented last week, of course, is another step in the nickel development. All that expansion, it's ahead of plan. Kerstin will tell that we are probably going to be in full speed earlier than we previously announced. Basically, we're very proud of the development in order in general, where we also have several steps coming after each other. The action plan in Rönnskär has been going for a while now, and Kerstin will talk about an update there. It's on plan. I think the weak spot here is the production issues we had impacting Aitik's stability. Certainly, we are going to do something serious about stability in Aitik now. Mikael will talk about that. What about the short-term development? I said that we are quite pleased with the development. It certainly didn't come from metal prices. We see the zinc prices and copper prices in the quarters of last year. It was hovering zinc on a rather stable level before we came into 2015, it was down and down and down and down, and it continued into the beginning of this year when it started to look really ugly for this industry. Since we have seen an uptick in zinc, as we have predicted. Zinc has the best fundamentals and should, in a better environment, be the first to recover. Copper has been going down on a more long-term scale and continued also down into very low level in early or in January, has also recovered. Basically, it's not the zinc prices or copper prices that has created the results, which you can see here. We have revenues going up from the previous year, 2015. We had earnings on all the different levels improving. Also, cash flow was considerably higher 2015 versus the year before, and we reduced the leverage or the debt equity from 35% to 23%. What happened here? If it wasn't prices, it must have been something else. The terms for smelters, after following a time of too big investment in mine capacity in the world, the terms for smelters improved, and the business model enjoyed the advantages there. We also had this phenomenal project, Garpenberg, with a big profit. Of course, we had luck with currencies. When it comes to currencies, we share that luck with most of the comparable companies. The whole zinc world and copper world, where they are on the global map, have similar positive currency movements as we have had. We, from the short term, go to the longer term development, what are we trying to accomplish in this company? First of all, we're convinced that the metals have a very good future. About half or almost half the world are on a standard of living below the level where China started to drive the commodity sector. I think the long-term perspective is very nice, even though the short term is a bit more gloomy with the results and the news flow from China. Let's have a look at the most fundamental factor first, the metal prices. Copper and zinc. The line diagram at the bottom are indicating or are showing the cost level of the mines in zinc and copper. They are on the 90th, 75th, and 50th percentile of cost level. This graph is when the price is here, 50% of the mines in the world are EBITDA negative, and 50% are EBITDA positive. On the upper line, 25% are negative and 75% positive. We can see that the cost level has been continuing on a quite flat level in zinc, but we have seen quite big increases in copper. This is relating primarily to energy prices and currencies. The vertical lines are the volatilities, the maximum and minimum, and average price for each of the years. We know that when the price is leaving higher than the cash cost curves, it's huge swings in volatility. The good thing is the volatility is low when we are at prices close to the cash cost levels. Therefore, we have taken it as a very strong strategic fundamental to look at where do we believe that the floor prices will be next time it's going down. We are simulating worst case scenarios, and we have financial targets to be well-equipped with a strong balance sheet once we are into those difficult periods. Both for our own stability as a company, but also to have some room for taking steps like, for example, Kevitsa. Many people are asking us, okay, have we seen the worst behind us now since the prices have come up a little bit? I think it is much too early to have any much of an opinion about that. The opinion we have is that in any case, we are in the low areas. I don't think it's going to be so much worse. Will we stay on this level for a long time, or is the worst behind us? I think we should avoid to be too sure on that one. Step-by-step development. We are in Sweden. Sweden is an engineering country with a lot of world-class industries like Ericsson or Volvo or whatever. We have a tradition of engineering, of technology, and productivity. We think for us, it's a natural thing to drive the organic growth. We do the simple things first. Then we take the bigger projects, and if we are feeling that we have a good self-confidence and we are well-equipped for it, we can also do acquisitions. Which are always bigger money, bigger risks, more unknowns. We should be sure that we have tapped the opportunities on the simpler things before we take those steps. The organic growth or the step-by-step is based very much on technology. Mikael, again, will talk about what we do in different areas, and we have some leading designs and leading inventions which are used by smelters and mines across the world. When we are traveling there, it's very nice to see that one was invented in Boliden Mill sometime, and this is an Outokumpu flash smelter and so on and so forth. Together with that is also the project management capability. The big money, this is a CapEx-intensive industry. The ability to spend the money in the right way and with good control is, of course, a fundamental value driver in itself. I think we have demonstrated this several times. If we have a look at the big projects we have done in the past years, they have all been on time, all except for the first and the biggest of them all was Aitik 36, where we had a 20% cost or CapEx overrun. I think this is something we are feeling quite pleased about. The result of it is high productivity. This is showing the global mines of zinc to the left and copper to the right. The further out to the right you are, the bigger you are, and the further up you are, the higher productivity there is. We have the number one productivity zinc mine and the number one productivity copper mine in the world. We can also show it in a different way. This is the mines 2015 and 10 years earlier. Certainly, we have marked there Garpenberg, the journey in 10 years in competitive position is huge, thanks to the geology or the exploration results and the investment. In copper, we have taken Aitik from over half of the curve to the bottom quartile as well. If we continue with the smelters and do a similar. There, we normally don't compare with cash cost but cash margin because of all the byproducts and the complexity of the revenue model. If we look at Kokkola and Odda, they have moved left, not in an extreme way, but I think Odda was going in the meantime further and further on the right. If that was the position 10 years ago, the direction was In the bad direction. Now we are here, and you will see tomorrow that we are on the track of the opposite direction. In copper, it's amazing. The changes we have done in, for example, the nickel strategy in Harjavalta and, for example, the latest process changes and recycling and the whole strategy of Harjavalta and Rönnskär. Very cool developments. Finally, to say something about M&A strategy. Are we changing our strategy? No, not at all. We have said that we want to have the financial ability to do something, to do a bold move, to get a bigger geology, to be able to develop new cases like Garpenberg and Aitik over time. The best geology in this part of the world is actually Finnish Lapland. It has been full of exploration companies, and it was occupied when we started to put our eyes on Finland, so there was not much to do there. We bought the Outokumpu area in 2015, and now with the declining prices, we said good timing. Well, the best of that timing is that Kevitsa came for sale. In addition, of course, the price is lower when we bought it than it had been a year earlier. Let's look at what we have expressed to the market, what we are looking for. We are looking at producing mines and projects. Kevitsa is a producing mine, obviously, but it's also very early stage in a virgin territory. We can also look at it as a basis for projects. It's copper and zinc. Well, it was not copper and zinc, it was copper and nickel. It's about equal sizes, 40% copper, 40% nickel of the revenues, and 20% PGMs. It's base metals with by-products. Well, it's almost a perfect fit there, too. Synergies. I can guarantee you, there isn't a mine in the world with greater synergies than this one. We look for midsize. We don't want to buy a mine which is suddenly dominating. We have this new thing with capital raised in the market, multi-billion dollar, and then the future of Boliden is this, whatever we bought, and the rest. No. Kevitsa comes in as a fair size asset in parallel with the other big assets we have. It's not the biggest, it's certainly not the smallest. It's one in the focus area. By size, I think it is very good. Let me now show a beautiful picture. It is looking nice, huh? It's a concentrator where we know all the equipment. We don't own it yet, so if the deal is realized, we are going to produce two concentrates here compared to three in Garpenberg, only one in Aitik. We have the same kind of mills. We have the same kind of flotation cells. We have a mine with the same kind of haulage trucks and drill equipment. When we came over there with big due diligence teams, well, we recognized everything, and it's on car distance from where we are. We paid $700 million for it. It's a lot of money and it's making a loss now. Of course, someone is suggesting, "Didn't you pay up too much?" Yeah. If the price would continue on this level, it's not a good deal. If the consensus prices or if we think that we are in a cyclical industry, we are convinced that the modeling we are doing is a good deal. We have bank facilities committed for it, and we don't own it. We have the normal conditions for closing the deal. It's excellent operational and geographical fit. I guarantee it. We recognize most here. It's also interesting copper concentrates, which over time. We buy today ballpark 50% of Kevitsa's production right now. Kevitsa will increase in capacity, over time, I think we will take over. We will see that, they don't have long-term contracts, by the time they expire, we will move them in-house. We will get an addition of very attractive copper concentrates. Certainly, we get a nickel concentrate, which is very attractive because in nickel, when we created this new strategy, it is still an anomaly. We don't have a base feed in nickel as we have in zinc and copper until now. We get a very valuable base load. The maximum potential is about 40% of Harjavalta, which over time could be sourced here. We are talking about timing. We are not suggesting that we know that the metal markets are not going to get worse than they are. We think we are somewhere at the bottom, it's more upside than downside. When we talk about good timing, it's not exactly that one we refer to. It is the fact that we have built Garpenberg, we're finished, it's ramped up, we would like to have new things to put our arms around and put our technology into. I'm not suggesting that we are going in to tell First Quantum or Kevitsa how to operate this mine. We have a very good crew eager to share ideas and learn from First Quantum and give in other areas. That concludes my presentation, we are ready for some questions regarding what I said and about Kevitsa.

Speaker 16: Yes. Before we open up for questions, may I just remind you to wait for the microphone and also to state your name and institution. Since we are webcasting this CMD live, we will also be accepting questions from the web. Please post your questions. Should we start with Olof Grenmark? We have a microphone on the way.

Speaker 9: I can stand up here.

Speaker 12: Olof Grenmark, ABG Sundal Collier. You provided us today with a CapEx forecast for both this year and next year, and they will go up in 2017. Could you please give us some explanation? Is that related to the coming Kevitsa acquisition?

Speaker 9: That's not an okay question now because we're going to have a financial section later on. Can we move that forward a bit?

Speaker 12: Okay.

Speaker 16: We have Gustaf.

Speaker 5: Thank you. Gustaf Sandström, Danske Bank Markets. You have previously stated that you're not willing to take a bet on metal prices. You haven't really been willing to hedge prices when they've been high. You've had great margins. You buy a mine, which you state is not making profits in current metal price scenario, meaning you actually take a bet on metal prices. Is this a change of strategy from your part? Should we then expect you to hedge prices if we have a recovery?

Speaker 9: I think you should look at it this way. When we took SEK 3.9 billion in Garpenberg, we simulated the floor prices, really ugly metal price scenarios, which could occur later on. We said that our balance sheet is not really strong enough to give us the safety margin we wish. Therefore, we put a hedge in place, we're doing that simultaneously. We buy Kevitsa. We have a balance sheet, which we think is strong enough in the simulations we're doing, therefore we don't need a hedge. The hedge policy is normally we don't take hedges, we do in rare cases when we need to support the balance sheet or the stability of the company if the worst price scenarios would come. This time, our simulations indicate that we're okay without the hedge, therefore, we don't do it. No, not a change in strategy.

Speaker 16: Any more questions? Daniel? Anna is next. Thank you, Anna.

Speaker 4: Hi, it's Daniel Major from UBS. I guess, how much of your decision to move into the transaction was based on your expectation of your ability to deliver synergies? I think you said on the call after the acquisition that it met a 10% hurdle rate target based on consensus commodity price forecasts. Obviously, they're materially higher than spot. How much of the decision was based on the ability to deliver synergies, firstly, then secondly, where the main area of synergies you feel are. I appreciate you might not be able to give an absolute number, but is that technology? Is it productivity? Is it the interaction with the smelters?

Speaker 9: First of all, the synergies in technology and our concept of what can be done is based on. We have been having a lot of engineers meeting from both sides. We think we recognize a lot of the issues that Kevitsa is dealing with. They have not been following their ramp-up plan. If we have the solution to it, well, I don't know that, but we certainly have more people. We have some of the areas I think we're very well equipped and we have a lot of knowledge in. A lot of synergies which are kind of loose, which are kind of not the hard synergies that one would probably wish. We think that we together can follow a ramping up plan as planned. That's the first thing. Number 2, I think that we have some hard synergies in logistics. We have wanted and suggested to buy more from Kevitsa, but Kevitsa is putting half the eggs in one basket called Boliden, and the other half is in other companies' baskets. Now as an internal, we can take 100% internally over time. It's not going to be overnight because there are contracts in place, but they are not very long-term. I would say that we have the materials we talk about here. They are very good. We have Harjavalta smelter, which is copper nickel for a reason. This is a geology of this Nordic region. Harjavalta is built for things, situations, or for materials like that. I think that we would not like to go into terms or details here, and we have decided not to do. I can say they are very good materials for us, and we can get more of it. It's also true that we have been looking, okay, if we don't buy it, someone else is buying it. Then we lose some of the materials which we appreciate very much. You can say it's an additional synergy coming in, but we could also lose if someone else. The calculation is basically without synergies else and that we think that we can support in making the plan and with long-term prices, sort of that's justifying the deal. The other side is we check it versus low price scenarios where the deal is not going to be good. Will that sort of drag out for long, long times? It's not a dangerous acquisition even in those scenarios. We are stable as a firm, and if the consensus happens, we are happy, and if it wouldn't happen, okay, it's not a catastrophe, but it's

Speaker 4: Sorry, just to interpret that. You're happy with the returns of the deal regardless of synergies, and the majority of the synergies probably with the smelting business. Is that-

Speaker 9: Happy with it. When you buy an acquisition, you don't get IRR of 20%. You don't do that. You get acceptable margins, returns for the acquisition, yes.

Speaker 4: The majority of the synergies probably with smelting more than operational.

Speaker 9: Could be.

Speaker 4: Okay, thanks.

Speaker 16: Do we have any further questions? Ola Södermark.

Speaker 11: Ola Södermark, Swedbank. If I put the question another way, don't ask about synergies, but ask about potential operation cost improvements when the mine is running at design capacity. If you manage to ramp it up to design capacity, what kind of improvements can we see in cost per ton?

Speaker 9: We don't own the mine, we don't have a plan. We have ideas, and we are not going to speculate about ideas. We have a concept, and we have a deal calculation or an acquisition calculation, of course. We are not the owners of it. We have done the due diligence. We have had crowds of people there, but for short times discussing, and we think that we understand what the situation is. The plans will be when we think we are going to next capital market day. We do the big plan for Kevitsa, or what do you think?

Speaker 10: We'll see. First, we need to take over, and then we will start working on the plans. We'll get back to you once we have something interesting to say.

Speaker 11: Do you expect any problems with competition authorities?

Speaker 10: Well, you should always have respect for them. They have their own power, but we don't really see that. In a relative market scale, we are small, still small.

Speaker 9: No, we don't think so.

Speaker 16: The next question is from Johannes here.

Speaker 7: Yes, Johannes Granstedt, SEB here. On Kevitsa, when you did your valuation, did you base the valuation on the reserves in place, in other words, 20-year operation? Did you take any value for the resources beyond that?

Speaker 10: I think just to be on the valuation. We have used the consensus price tag, which you can argue if that's too aggressive or not. The consensus price tag is our valuation of Kevitsa standalone for the existing reserves. We have not put any value on the resources additional to that, potential extensions. We are also getting some exploration licenses connected to this. We have not put any value to that, and we have not put any value to synergies.

Speaker 7: Okay. Also a question. Lennart, you mentioned that there might be negative synergies involved if someone else would buy Kevitsa. Could you indicate how much interest there was in the final period of the bid process among others? Were there a handful or

Speaker 9: We have had tough negotiations. It certainly didn't feel as if we were the sole bidder. It was a competitive bidding. We have no comments on who else was there.

Speaker 7: You can confirm it was international interest in Kevitsa.

Speaker 9: I don't think it is up to us to have an opinion about it.

Speaker 7: Fair enough.

Speaker 9: No.

Speaker 16: The next question is from Christian Kopfer.

Speaker 3: Thanks. Christian Kopfer, Nordea. Just coming back to the synergy discussion once again. Will you come back on this topic a little bit more, mentioning what kind of figure or range in terms of revenue cost synergies in this deal? I think it's quite imperative for the market to understand the value add, given that the synergy is quite important thing in this.

Speaker 9: Of course, we will. We are not going to do it before we know what we're talking about. We have ideas, but it's not our style to go out and speculate that it could be a little bit that. On the other hand, be careful because we don't know. No, guys, we have bought a mine. We think the deal is good, and we do it with a timing which we think, and we do it from a position of strength. We think we have grounded the deal in a good way. Once we are ready, we'll have put our arms around it. Absolutely, we are going to talk about it. It's very important for the market where we are spending SEK 6 billion. Sure.

Speaker 3: That's fair enough. Thanks.

Speaker 9: Of course.

Speaker 16: This has to be our last question. Thank you, Lennart. Mikael, now the stage is yours as President Boliden Mines.

Speaker 10: Thank you. Do I do like that? Yes, I do like that. It's good to be here. I've seen most of you before, but in a different role, now I'm standing here as the head of Mines. I've gotten several questions, why did you ever decide to change job? I kind of made a comment that if you look at my educational background and also look into what I've done previously, with exception for the last 10 years, I think this job is right in line with what I've always done before and what I've always wanted to do. You can say that I've had a 10 year of being CFO in the meantime, while preparing for something else. I'm extremely happy to have Håkan here, and to have Håkan around, and to be around as of April 1. It has been slightly stressful to carry these two jobs now for almost nine months. Having said that, I will now talk about Mines. I will come back as CFO a little bit later and talk about that. In Mines, there are two things that are important to us. We're working on operational excellence, we've done that, I will give you examples around what we've done on operational excellence, we're going to talk about profitable growth, I will talk about examples of what we have done to achieve profitable growth. On the operational side, there are four areas that we'll talk, I will have examples for all these four areas when we go through around what they are. The areas are is production control, what we've done in production control in order to be able to achieve more productivity. What we have done and doing and planning to do in mine automation going forward. What we have done and what we're planning to do also to some extent on the mineral process development. Also what we're doing and continue to do and will continue to do on preventive maintenance in order to achieve higher reliability and thus higher productivity. Why don't I go through all of these four a little bit more in detail and give some examples. The first example here is around planning and what we can achieve through planning. The chart that you have behind me here, to the left here, there's a little bit of a background. It could look like almost like an internal decorator has done something, but that's not really what it is. This is an overview of one of our mines. This is the Kristineberg mine that we have, and just part of it. Kristineberg mine is a 75-year-old mine that has built on and on and on, has a logistics system that is quite big and quite large around that. One of the biggest difficulties in running an operation like that is that you don't really have control of different pieces. In mining, as with many other operations, there is always something that could go wrong, take a longer time. When you don't have full control, what happens is that if one pieces of operation takes a longer time than it was expected, the next guy is waiting behind to do the next operation, he has to stand in line waiting for the first one to get finished because he cannot really be replanned. What we worked with in Kristineberg first, we've eventually rolled out to all of our mines, is to use the fact that we can now, through the positioning system, know where everybody is. You can see that the different parts here, this is people here, that is the blue one. There is some equipment and different phases working. The one who's sitting in a control room actually knows where everybody is, on top of that, gets information if some operation is delayed for some reason and can then replan. The effect of this just getting the useful hours out of the equipment, you can see here with the lighter time coming on top of the other parts. This is the effective time you get through that. What you also see here, by the way, I'll come back to that just if you wonder what this is. This is a typical, for our underground mine, the typical useful time we get, you have big times in between when we blast or when we have shift change or lunch periods and so on, where you don't really get productive time, that you have less productive time coming out of the mine. Even if we say that we have a 24/7 operation, it doesn't mean there's always operation going on in all parts of the mine. Coming back to the planning, what have we done? It is not that sophisticated. It's a normal planning tool that you have with all the operations lined out. The thing is that now when we have information about what everybody's doing and where we're going in the operations, we can very quickly replan. We can send a piece of equipment to another phase to be able to use it productively throughout a time and not lose out on any time. Here you see once this was introduced and we had the infrastructure in place and we ran the product around it, you can see very quickly, the scale here is about the productivity, how much productive time you get out. You can see that very quickly you had a jump. In only a couple of weeks, you could see this 10%-20% increase in useful time of the equipment, it kept on working that way going forward. Another way of achieving greater transparency and greater productivity is around this tool that we have here, which is around in the mines and in the concentrators to be able to have full control of the concentrator in one mobile device. You can see this if you go out now when you have a break, we have a sample out there, you can see how this works. Where we actually can get all the information how the concentrator is working into this unit. This means that the operator can actually leave the control room, go out into the operations, he can work on whatever maintenance he's doing. He can get all the documentation that is needed for this particular pump. He'll find everything out coming out into the device around that. There will also be a transparency so that everybody who works can look into this and have the same basis of information no matter where you are. You can even extend this, that somebody who's going into his shift and start working can already, one or two before when he wakes up in the morning, go in and look into how the concentrator is doing, being prepared for what the day will be like. If it's going to be a normal day or a day lots of special things, whether it has been some problems in the shift before. We can even use this one so that we can run the actual concentrator from a device like this, so that the operator can bring it into the operation, can stand by the pump, turn it off, look at it, turn it on again, see whether he can get a sense of what the problem is. We're working on this, that we will get on, and as I said, do use the opportunity to look into the exhibition upstairs of how we're doing that. The next thing is we talked about we have all these ups and downs where we don't have any productive time in the mine. What are we doing about that? What we're doing about that is, of course, trying to fill it in, and we try to fill in this productive time or get this time productive in between shifts and while we're blasting. It's especially a question of getting loading and drilling operation to be continuous and autonomous around that. We worked on that. It is now rolled out to almost all of our mines to some extent. We have the basis for doing this. Also here we have an exhibition upstairs for you at the lunchtime to see how we're working on this. You can see in Garpenberg how this is done, how you load into the loader, and then how the loader drives by itself to the offloading point. That can happen all by itself or by an operator sitting on the surface during this, especially at these critical time periods when you cannot be in the mine. By doing this, of course also you can improve safety if you get this right. You can get up to 50% additional time available in the mine to certain activities by working on this way. I talked about Garpenberg, the example. We started already back in 2011 with the Garpenberg example. Roughly 18% of loading is now done autonomous. The ambition is to get to 80% by 2019, an ambitious target that we think we're going to be able to achieve. We have WLAN is of course, the basis for this, that you can have the information all the time where you are, and you can have the remote control. We have that installed now more or less in all our mines. We're running out this program throughout the mines that we have. The next area after this that we also talked about is the mineral process development. Mineral process development is where we try to achieve improvements, either to get better yields, to get out more metal or for environmental purposes, to get better environmental footprint from what we're doing. In the mill and in this process, we have lots of prior history. We work with autogenous grinding, that was very early. We worked with the Fenton reactors around the water treatment. We work with the Kankberg, where we have lots of intellectual property to get tellurium out of this mixed gold tellurium mineral and also get more gold at the same time. We looked at nitrogen removal. I have an example here, which is in Tara, where we worked on antimony removal, that I'll come to in a moment. I will also here also give the heads up to everybody. Use the lunchtime, go up and look there. We have a small exhibition of what we're doing next step that is more about using bacteria for some water cleaning activities that we're working on, where we're also developing some intellectual property around that. Here, I'll just give you an example in Tara, where we reduced the antimony emissions by 50%. We've done that without having to jeopardize any of the production. The production has been stable, very low CapEx and OpEx solution that was very much tailored, fitted to the situation in Tara. We've done that with chemical precipitation, and it was a fast development, and we managed to get this one in place very quickly. This is also one of the things that we are quite proud of. Having our own engineering department, we can do these kind of things that are linked to the operations that we have. Preventive maintenance and the importance of that. I'm going to give you an example. I'm going to give you an example from Aitik. Some of you may say, "Okay, Aitik, you haven't had that well of a stability in Aitik recently." That's true, but it's not true for all of Aitik. Aitik is actually working very hard on certain areas and have been quite successful in these areas. We have here showing the example of the availability of our shovels. You can see the availability has in the last four years gone from less than 80% to close to 90% availability. At the same time, meantime between failure has also gone up at the same pace, as these things are linked together. This is one example of where we've been working on preventive maintenance schemes to get better availability in our equipment. There are more examples like that. Somebody's calling. With that, I will now move over from the operational efficiency and start talking about the growth and what we're doing to grow. Of course, the basis for growth is to have ore. If you don't have ore, it's difficult to grow. Here we're taking a 10-year view just to have a sense of what has happened over these 10 years. You can see that in Aitik we have both been very successful in growing the ore reserves. In the Boliden Area, very successful. In Garpenberg, very successful. We are in those three operations in line with or above where we want to be in terms of having enough resources or enough time to be able to plan well. Kylylahti is not quite that way, and I'll come back a little bit to that. Even though we didn't own it before, but four years is a little bit on the short time. On Tara, well, it was 6 years, 10 years ago, and it's 6 years today. It's been able to hang on a year-by-year basis all the time, and we're continuing to work on that, and I'll talk a little bit about it as we come into the next slide. This is the 10-year horizon. If you just look at the last year, we're also quite happy. I have asked some of the older geologists who've been around, or our mine guys who's been around for maybe 30 years, and give kind of put 2015 in a context. How good was this year? I got the answer that, well, maybe it's not the best year, but it is clearly maybe a top 3. We had quite a lot of success in the year. We increased the reserves in Aitik. We increased reserves in Garpenberg and in Tara in a pretty good way. We have two new mineral resources in place that we're quite happy about and we're quite ambitious around getting these ones into production. It is the Rävliden in the Boliden Area, close to the Kristineberg mine, the one you saw behind there a little while ago, which is proving to be a very nice satellite deposit, or we hope it's going to prove to be a very nice satellite deposit. We have now done outside Aitik, which is quite different from Aitik. The only thing that's common is that it's 15 km away, but it's actually an underground deposit with very high-grade ores, as opposed to Aitik, very low-grade ore. It fits, we think, or at least we're planning, it going to fit very well into the general mix in Aitik, and we hopefully will get this one well-timed in planning. Now, everything is not perfect, everything is fine. In Outokumpu field, we've had some disappointments during the year where we have basically not found any new ore, and therefore depleted the ore base with about a year from production in Kirunavaara. We will increase the emphasis on this area and emphasize the exploration in Outokumpu during next year or during this year. In Tara, we were very successful, actually. We got quite a lot of good results last year, we will continue and actually spend quite a lot of focus on Tara. Tara is an interesting mine in a sense because I've always said to everybody that whatever number you see on Tara, it's never been end of stuff in the ground. There is more stuff in the ground at Tara. It's always been a question on at what cost can you get it up? Tara is a high-cost mine, as we go deeper, it tends to get slightly costlier, is it then profitable or not? We hope and we think that we should be able to at least give it a good shot and see what we can find and whether we can move on and keep Tara going further. Lennart already spoke about Garpenberg, I cannot resist also spending some time on Garpenberg in my presentation. This is the ramp-up of Garpenberg. You've seen it before. The ore production and therefore the total production in Garpenberg was up to speed by the end of the year, which means that we completed the ramp-up on time. We have completed the whole project on budget. You've also seen that we also proven very early that the mill itself can do much more. This is when we had the ore stockpile to work out so we could have more mill ton. We don't have any ore stockpile any longer, so we have to have the mine, or say the mine is the limiting factor. As soon as we can work on that one, we will have a good position going forward. Let me move into Aitik, which I think is the essence of this discussion going forward. Let us first repeat what we said when we talked about Aitik about two years ago. What we said about Aitik, that we want to expand Aitik was going to have 2 phases in expanding. The phase 1 that we were pretty detailed about, the phase 2 that we were a bit more shady about, mainly because we ourselves didn't really know exactly what phase 2 would really entail. After we started with this, we relatively quickly came to the realization that also part of phase 1, meaning the surface crusher, was also a little bit premature. There were questions around what exactly to do from an engineering point of view, whether the positioning we had chosen was exactly the right one, whether the setup was the right one, it was clear that it was also linked to other pieces. What we can say today, just to have a sense of this, is that the other pieces that we did announce, the crusher reinforcement, the water pumping and electrical substations, they've been done. That was roughly SEK 200 million out of the SEK 400 million, done, finished, clear. We did not start the surface crusher. We also said that eventually there would be an in-pit crusher with conveyor systems. We said that there will be needed water treatment system, there will be needed desulfurization, I say we're a little bit vague around that. What have we done since? Number one, we did get the new environmental permit now in the first quarter. That's been important because as long as you don't have the permit clear, you are reluctant to really make a big decision because you can get impacted by the eventual ruling. The ruling came out and was in line with what we had expected it to be. It was not a big surprise as such. Before you really have it, you cannot really be secure. In the meantime, we have worked on the mine plan and mine optimization, we're quite happy to stand here and say that we have done the thing that's usually not so easy to do. We have both extended life of mine, and we have increased the grade. The grade from 0.22 to 0.23, and we have increased the life of mine, as you've seen on previous pictures, and we are now up to, I think, 2044 in terms of reserve life. We have also worked on the crusher setup during this time. What is the idea of crusher setup? What do you really need? How can you work around this? What we've come to the conclusion is that we need to have a surface crusher, but the surface crusher needs to have an even more higher reliability and a higher availability than we had thought about before. I'll come back to that because it will be the workhorse. By doing that, we can postpone the in-pit crusher. We will still need to redo the in-pit crusher at some time. It's not going to go on forever, but we can postpone it well into the '20s, something through 2021, 2023. We'll get back to that, but into the '20s, the decision about it. In the meantime, desulfurization, we've also been able to put that one out because of what we've been able to do in terms of optimizing how we work in the tailings facility. That one might have to be done also after '20s or later. It's a little bit unclear exactly if it's ever been needed. We will have to look into that development going forward, but at least for now, we can take that one out. That also means that we can now be a little bit more explicit around our guidance on grades. I think the 0.21 for 2016, we've guided already before. We've said before that we were going to be over the average grade for '17, '18 and '19. That we said before, but now the bar is a little bit higher because the bar is 23 and not 22. We will be above that, so we will be in the 24, 25 region around those times. With this, the ramp-up to 45 is delayed, which is clear that we're doing this thing and we're now been postponing, and we're now aiming to get there in 2020. What is this new surface crusher? What is new with its surface crusher is that it's a double crusher. You can see here and point as it's one control area, but it's one crusher here and one crusher here. Why do we have a double crusher in here? It's not to operate at the same time, because actually the logistics system going out will only allow you to run the two crushers in parallel for a very short time, like an hour or so. It's to make sure that you always have one crusher available. This is the same setup that we have for the 165 crusher in Aitik today, which is a double crusher, which has a very high availability and reliability exactly because of this. You can always have one working while you're doing maintenance on the other one or doing some repair or clearing up, so that you always have more or less 100% availability, and that's important. We've also spent quite some time. The other problem with the existing setup is that we don't have enough facilities and enough ease of doing maintenance, which is why maintenance has become so expensive. We have here also made sure that we have worked on the maintenance ability around this setup to make sure that we can maintain this crusher in a cost-efficient way and in a good way. That's the new thing around the crusher setup. It's a double crusher. With the double crusher, we have the availability as high as we do. Because of that, we can schedule more on the surface crusher than we did before. Because of that, we can also work, live with the in-pit crushers longer than we have. We've been able to plan around the in-pit crushers so that we don't blow them away too early, but rather work on the pit designs, and we can keep the present positions longer than we had thought before. That, I think, is the summary in essence. What is the impact of this? The impact is higher availability. The impact is higher visibility in production. By visibility in this case, it's not about knowing where everybody is in the mine, but it's about being able to plan. Because one of the big headaches in Aitik is that with the constant breakdown of crushers, you have a constant replanning going on in an area where you don't really want to replan. The blasting schedules and so on get interrupted with the constant replanning due to the fact that we've had poor availability on two out of the three crushers. The remaining CapEx for this going forward now is SEK 1 billion, which means that the total project runs up at about SEK 1.2 billion altogether. That is the crusher being the main thing, we still need to do water treatment that we already said before that we need to do. That is part of this plan. It's going to happen at the same time schedule. We also have power supply that needs to be adjusted to fit as well. That's all within this plan, it works around then a installation timeline of 2016 and 2017 and a commissioning in 2018 around this. With that, I am willing to take questions. Here comes the first one.

Speaker 16: I assume we have the questions for Mikael. Let's start with Sasha here.

Speaker 17: Thank you, Sophie. Mikael, two questions, if I may. Number one, are you able to quantify the benefits of automation in terms of decrease in operating costs or ideally, return on capital?

Speaker 10: No. Not at this stage, not standing here. Over time, it will, of course, head that way, I'm not able to quantify it at this stage.

Speaker 17: When do you think we might have a sense?

Speaker 10: We will over time, as we get our plans right, we will give you some sense, it will come later. This is what we're working on.

Speaker 17: Okay, second, could you potentially outline the trajectory of tonnage ramp-up at Aitik between this year and 2020? What's the tonnage likely going to be in 2017, 2018, and 2019?

Speaker 10: This is also a difficult question. Of course, for 2016 and 2017, we will not have the new crusher in place, which means that we're standing with our old crushers. With the present crushers, in 2015, we managed to do 36. Now, you can say that we had some bad luck or whatever, but still, it's tough to get much higher than that, even though we have done 39, because we did 39 in 2014. I think as long as we don't have the new crusher in place, we will be in those kind of regions, 36-39 type of region. It will be difficult. Then we have 2018 as the commissioning year with hopefully some ramp-up, there's a ramp-up in 2019, and we should be there in 2020. I think I was vague enough, right?

Speaker 16: Thank you. I believe we have a question from Johannes.

Speaker 7: Yes. I'm interested to hear about the capacity when the new crushers are installed. What's the capacity in the crushing system?

Speaker 10: This is a very good question. It is also very difficult to answer, because capacity in the crushing system is actually pretty good. The problem is, of course, that it is difficult to talk about capacity in the crushing system, because it depends on exactly where you are mining and how you are blasting, and you do not want to always go to the crusher that is available. You want to go to the closest crusher. With this workhorse crusher on the surface, we feel comfortable reaching 45 without having to replace the in-pit crushers as such. They will need to be replaced anyway because they will need to be blasted away or they need to move position. We should be able to reach 45. That is, by the way, the limit of our permit anyway, and also the limit of what other systems around can handle. 45 is kind of where we start reaching lots of other bottlenecks.

Speaker 7: You touched upon the grades there. You said 0.24, 0.25. Is that what we should sort of expect and put in the modeling?

Speaker 10: Yeah.

Speaker 16: We have a question from Chris.

Speaker 17: Can we just get a bit more information on Kylylahti? We had a decent change in the resources, but not the reserves there. Can you give us more color on, should we be expecting a decent reserve bump this year with an increase in drilling density or something like that? Is that the issue, or is it geological constraints we don't quite understand yet? Also on Garpenberg, not to bash, but obviously done fantastic well there, but the soft ground conditions you've been experiencing recently, have we had a marked change in the mine plan there?

Speaker 10: If I start with the second one, the answer is no. Garpenberg is an area that is great for all kind of things, but you're pointing to the weak point. We do have this soft mountain, or mountain that tends to crack. There's been that over time, I think we will have certain events like this also going forward. We have not changed the mine plan. We have, to some extent, learned a little bit about what happened in December, We're changing, not the mine plan, but some of the operational practices around exactly how we backfill. Not any change really in mining plan going forward. I then move to the other question about Kylylahti, you're right that we've had some resources coming through, That's of course, to some extent, the good news. It is, however, clear that those resources, yes, we can hopefully upgrade some of them to reserves, We will also need to find new reserves. There's been an idea about where there should be a continuation of the main ore body in Kylylahti right now, It's not really behaving the way that we hope. It's not quite where we had hoped it to be.

Speaker 16: The next question is from Alain.

Speaker 1: Hi, Mikael. Alain Gabriel at Morgan Stanley. My question is on the CapEx. Two-fold. Do you mind giving us a granularity on the CapEx 2016, 2017, 2018, in the mining business between maintenance and growth? The second question is, post-2020, how much do you expect to spend on the in-pit crusher and the potential expansion of the tailings or the new tailings?

Speaker 10: Lots of difficult questions. Let me say that if you start in the other, tailings, it's a totally separate discussion, which we're having lots of discussions on whether we will survive on one tailing dam or whether we will need a second one. This is going to be the main showpiece for the 2025 application for the renewed environmental permit for the next 10 years to 2035. That will have implications of all kind of sorts, both in terms of CapEx, but also in terms of reclamation cost and so on. I'm not willing to guide anything on that. The cost for the in-pit crusher, I'm also not willing to guide upon, because the ambition is that we can do that in somewhat of a cost-efficient way, but I think we're so far down, and we are also kind of honest that we have not exactly planned where this in-pit crusher will be. The base plan is that it will be one as opposed to two. We have two now. We will go to one. We have some ideas about how we will try to connect it to the existing conveyor system to minimize the cost of additional conveyor system, but we will need an additional conveyor system of some kind. Exactly how much and exactly when is too early to tell. You had the very difficult question about you giving a sense of investments in the mining business for the next few years. I will not do that. I will talk about investment for the whole group when I come back in my next capacity after lunch, I'll give a little shed of light on that as a whole group. I will not do that for the mining business.

Speaker 1: Thank you.

Speaker 16: Any further questions? Satinder and then Christian afterwards.

Speaker 15: Satinder Paul from Citigroup. Two questions. Does Kylylahti still fit in your portfolio, assuming you get Kevitsa, given it's a smaller mine? Is it worth running it just for cash and shut it down if you don't get much success? How much is the cash closure cost if you were to take that route? Secondly, you had a 25% cost improvement on Garpenberg with the expansion in place. Now you're running at full capacity. Do you still stand by the same guidance, or do you have more visibility given how currency has moved and you have ramped up to full capacity? Thank you.

Speaker 10: If you start with the second one, I think we've always talked about that cost reduction in local currencies in Swedish krona, so the dollar will have done its own thing on it. Now, it's always difficult to actually reconnect what is exactly the baseline, and we also said you correct it for inflation. We've done some post-calculations, and I would say that the answer is we are close to the 25. Maybe not quite there, but we're close to the 25, so we're close to reaching the OpEx levels that we wanted to reach, that we had in our plans, when we talk in local currency. Now, regarding Kylylahti, there are all kind of alternative plans around that, but I think that we are not quite yet ready to discuss exactly how to close it down. It's obvious that if we don't find more ore, we will have to close it down. It is, compared to other sites, a relatively cheap restoration cost, but yes, there is a cost of restoration in there as well. We're not quite ready to go that path yet. We're still working on trying to find more ore.

Speaker 15: Thank you.

Speaker 16: Then we have a question from Christian there. Yes.

Speaker 3: Thanks. Christian from Nordea again. Just to follow up on Aitik. If you are successful in the process stability mission, so to speak, how much do you expect the unit cost? I assume that you can take down operating cost in that mine.

Speaker 10: Yeah. We have here, you're not going to like this because it's going to be very difficult for you to model, I will say what I'll say anyway. We have not changed the guidance that we had from last time, we said that Aitik 45 should bring down operating cost 10%. You're going to say, "Compared to what?" I'm going to say that was compared to the plan that we had before, because it is very difficult to give it compared to something else, because the operating costs will vary over time with where you are in the mine. It's difficult to pick particular years around that. I would say that the OpEx guidance has not changed.

Speaker 3: Yeah, I guess 2015 was not the best year for Aitik. I guess cost, I mean 2016, if you were able to-

Speaker 10: We should still be able to get the cost down. Yes, especially cost per ton, even though the cost was actually pretty good in Aitik because we've in parallel been running a cost-cutting program there, which has worked relatively well. Cost per ton was not so good, especially if you take cost per ton of copper with the low grades that we had, was not so good. We should improve, I will not give you any number.

Speaker 3: All right. Okay.

Speaker 16: The last question comes from Gustaf.

Speaker 5: Yes. Gustav Sandström from Danske Bank. You had a slider showing the capacity of the new crusher of 8,000 tons per hour. Does that assume 100% availability? If so, what's maybe a more prudent guidance for availability?

Speaker 10: You can put it this way, that 8,000 tons per hour, if you multiply that by 24, you will get much more than both the conveyor system and the mill can swallow. I think the 8,000 per hour is put there on purpose. It's supposed to be able to be there. You're supposed to be able to run that, but you don't have to run it all the time.

Speaker 16: Okay, thank you. That was our last question for this Q&A session. Thank you. When we are on the road meeting investors, we frequently get asked how we can optimize the raw material mix for our smelters. Our next speaker, Kerstin Konradsson, President of Boliden Smelters, will now discuss this even further.

Speaker 8: Thank you. First of all, I must say that I'm very, very proud to be here today to be able to present the good results our smelter teams have delivered in, I would say, quite a difficult year, despite the fact that maybe the terms have been in favor of smelters. Then, of course, I expect some of you to ask the question, okay, will this be sustainable? My job today is to show how we are planning to continue to deliver operational performance, and thereby stable and good results. Coming to our strategy is based on three prioritized areas, and the first priority is to improve our operational efficiency. This is the base for any smelter unit. It's about having stable processes, high recoveries, and low cost. Two very good examples of this, which I will come back to, is the Odda expansion and the successful improvement program in Rönnskär. The second priority, increased flexibility. What's that? For us it means that we need to have the capability to treat difficult materials containing impurities, but also to be good in extracting the valuables we have in the raw materials coming into the smelters. On top of this, we also need to make sure that we have sustainable waste solutions. I will come back to later, to say the challenges and potentials of working with complex raw materials, and I also will come back with an update on the progress of our building our deep deposit in Rönnskär. The third priority is to further increase our gross profit by increasing our metal or by-product production. Here I'm personally very pleased about the good development we have had now in Harjavalta with the new nickel business model. On top of that, the perfect fit now with our acquisition of Kevitsa. Lennart showed earlier this morning how smelters have progressed on the zinc cash modeling curve. Going back 10 years ago, we were quite poorly positioned, far to the left, and today I think we are fairly well-positioned. When you look at this, you see a clear difference between zinc and copper. This is despite the fact of all the good cost improvements we have done in Odda, you see that we are still in the middle. You might ask the questions why? I would say that the main reasons is that we have the by-products coming out from our zinc smelters have a lower value compared to what we get from the copper smelters. Also the free metals. We have less free metals, less valuable free metals. Whereas on the copper side, and you will see this more when I come back talking about flexibility and the importance of having a good raw material mix. Now, let's take a look at one of the first examples of improving operational efficiency, Odda. Odda has done a great job. You know about their P100 program, and now we have a very successful debottlenecking project ongoing in Odda. We started up late 2014. It was the last CMD we announced this. This is also a project I'm very happy about, because not only are we having a forecast of keeping the CapEx, but we are actually ahead of time plan. What we have communicated before is full capacity end of next year, and now we plan to have full capacity already beginning of the second quarter next year. Tomorrow, I know many of you will join us to the site visit in Odda, and you will be able to see all the things we are doing with your own eyes. What are we doing? I could say it's a debottlenecking of basically three major production processes. The first one is the cell house. You should know that normally when you design a zinc smelter, the cell house is the main bottleneck. We actually have a very good possibility because we happen to have an old cell house from 2013 that we now will take back into operation. The question is, why did we close it down in 2013? What we did at that time was that we did a modernization of the newer cell house. We installed more transformer capacity, and we respaced the new cell house. Respacing mean that we sort of densify the cell house. We put the cathodes closer to each other like this, meaning that we actually got space to put in even more cathodes. By that, we could increase production and also productivity. This is, of course, something we also will do now when we modernize the old cell house. This is a very important part. We need to have feed to feed a cell house. That we will do by installing two new direct leach reactors. This is good to know, but this is a very CapEx efficient way of increasing feed production, because the alternative would be the more conventional roasting acid plant technology, which is more CapEx intense. We also need to increase the capacity of the leaching and purification. That was Odda, and I'm really looking forward to the visit tomorrow. The other example is Rönnskär. Here you know that we talk about complex material. I will come back to that quite frequently. Rönnskär is a very good example of what could go wrong if you don't really manage the increase of complex feed. Just a short recap or summary of what is the problem in Rönnskär. It emerged at a time when we ramped up the feed of electronics when we took the new e-Kaldo facility into operation. We put in more impurities to the process than we had capacity. You could say that we choked the system, and the consequence of that was that the process got into imbalance, and as a result, we started to build up big stockpiles of intermediate material. Material that sooner or later needs to go back to the process, then you just add on more impurities, so you end up in a sort of never-ending problem. You could also say that one other thing that happened was that we discovered that the cost had escalated. What we did was that we started up a three-year improvement program in 2014 with the target to reduce cost and get back to process balance. We said that end of 2016, we should have an EBIT impact or EBIT effect of SEK 275 million. End of last year, we have actually reached already SEK 200 million, which is well in line or maybe even better than our plans. Now remaining the SEK 75 million for this year. What will we do to manage that? Well, I would say that once again, it's all about managing impurities. We can do that in different ways. First of all, if we take the intermediates, what we do is that we can now work with our raw material mix. We make sure that we buy in raw material that are low on the critical impurities. That will sort of free up capacity from the existing capacity that we can use to feed in the intermediates so we can reduce the stocks. That's one thing. The second thing is that we have this capacity, meaning that we realized it's not good enough to plan on a monthly or weekly basis. We actually need to plan the feed on a sort of hourly basis so we don't miss out the opportunities. Of course, all the time not to exceed again and end up in the same problem we have had. There is a third one, and that is, can we do something to even open up and increase the capacity more? Here we have two great examples that we have done. One is together between smelters and mines. I don't know if you know, but the slag produced at Rönnskär, we send to the concentrator in the Boliden Area, and we get the valuables back, and we put them in the process, and the waste go to the tailing ponds. Some good work now done have actually opened up 80,000 tons or more slag capacity. That's a very good outlet for us. Another good example of things we have done is that we have had issues with availability of the converters, and those are quite critical in the smelter process. By improving the quality of the bricks, I would say especially, we have now managed to increase the availability so we can take in more metal or more material. Moving on to our second priority, to increase flexibility. Here, I would like just again to sort of highlight the importance of having the right raw materials. In order to do that, I just thought we could simply look, you know this, but simply remind you of the gross profit drivers and the ones to the left. What actually the conclusion is that whether it's treatment charges, refinement charges, free metals, or byproducts, they all are dependent on the raw material mix. The outcome in gross profit is very much dependent on the raw material mix. If you're a smelter, you can have different strategies. One strategy could be to only treat clean concentrates. That's quite an easy strategy, I would say. Then you can only compete on cost. The other strategy you could have is to treat clean and complex concentrates in a combination, then you can actually add your technical capability as a competitive advantage. This is very much what we believe in, this is very much the strategy we have had, as Lennart said, already from the time we started up Rönnskär. We should also remember, I will come back to this again, this strategy only works if you have some unique competencies or capabilities. This I will come back to. This is also very much in line with what the trends we see in the market. What happens, this is more on the copper concentrates than on the zinc. What we see now is that more and more sort of complex material, dirty material, come to the market. If we have the capability to treat these materials, we will actually open up a much bigger market for us to choose between when we buy the concentrates. They could also add profit. Just the fact to have more concentrates to choose between is very important for us. What we see here is just looking at, this is from CRU, to see what arsenic is the biggest one by far. This is also the one that have had a sort of highest growth during the last years. You have fluorine, chlorine. They are a problem in the smelter because they cause corrosion. They cause wear of the smelter. Then you have mercury, antimony, all this stuff you need to be able to take care of. Also very interesting, zinc. Zinc is for most copper smelters an impurity. Here we have a unique capability. We have our fuming furnace in Rönnskär. We can actually take out some of the valuable zinc in Rönnskär. Remember, it could be an impurity, it could equally be a valuable. This is our strategy, maximizing the intake of impurities and valuables, sort of still be on the road and not exceeding the limits. Then you can ask, okay, what are you doing to make sure that the Rönnskär thing doesn't happen again? Well, then it's very important to understand and analyze what you take into your system. The value drivers, they are the normal gross profit drivers, on top of that, we also have penalties. What we do for each and every concentrate, we look at all the gross profit drivers, including penalties, then we deduct the specific costs that are related to that raw material. If we have extra cost, for instance, to take care of arsenic, that's deducted from this. Then we can rank all the concentrates, this is what we have done. What you see here is actually the final optimized raw material portfolio for one of our copper smelters. You can see that there is quite a wide range. To the left side, we have a concentrate that is very profitable, we actually bring in quite a big volume. Left of that, we have some very profitable but very small volumes. The reason is, of course, that they have started to hit different bottlenecks in the process. Then we fill up. Interesting, we can see that actually the gap between the most profitable and the least profitable is actually a factor two. It's a huge spread. Then we get the average. Of course, what we constantly drive to do is, of course, to lift the average. Then I guess that someone later will ask, "Okay, how much will you be able to lift that average?" That's, of course, very hard to say. If we talk about it, if we come back now to Rönnskär, I said that we are right now sort of stealing or borrowing capacity, impurity capacity, so we can take back the intermediates. Once we have done that, we will actually get that capacity back so we can put in more complex impurity-containing material. Then you can ask, "Okay, but if you have had all these problems, how successful have you now been? If this is part of the strategy, what have you achieved?" Actually, I think we have achieved quite a lot. This curve to the right here is indexed, but it's a development since 2010. This is on copper. I said before, it's more complex materials available on copper. We have actually had a CAG of 12% during this short time period. This is something we expect to continue. Of course, it depends on the market situation. It depends on our ability. Given the fact what I said, that we soon will open up more capacity in Rönnskär, that will definitely give some potentials to continue. We do have complex materials on zinc as well, but the market is slightly different. The complex materials on zinc, they are quite often secondary materials, and their availability is not the same as all the dirty copper concentrates coming to the market, and the profitability is not really the same either. Here we have, in the same time period, we have been stable but on a good level. This is where I expect us to be also in the future. Stable but good level. A part of this flexibility strategy is, of course, also if we bring in all these materials, we need to make sure that we can take care of them in a sustainable way. This is a responsibility we are very happy to take. Of course, it requires quite a lot from us. I think this one I think I've talked about last time. What we are doing now is something quite unique in Sweden. We are building a deep deposit below the Rönnskär smelter. We started 2014. The estimated CapEx is SEK 650 million, so it's quite an expensive one. There are many benefits. First of all, we know that we have a final storage for the materials. It's a very good sustainable solution as we see it. On top of that, since it's actually below the smelter of Rönnskär, we don't need to have any transportation of hazardous goods on the roads. The ramp is actually on the area, so we just take it down. For you to understand, we intend to go somewhere 350 meters below Rönnskär smelter. Now, this is not totally new for us because in Odda, we also have deep deposits in the mountains. This is something you will be able to see with your own eyes next week. I will say that with the experience we have in Odda and with the experience we have in building mines, I think that we are very well equipped to do this in a very safe way. The third priority, to maximize metal and byproduct production. Well, here, once again, I'm very excited about this new nickel business model. There are many things in this. First of all, by doing this now, we get a business model for nickel that has sort of the same principles as the ones we have for copper and zinc. We will have a business that is based on having a treatment charge, getting free metals, compared to before when we got a tolling fee. That's one thing. The other thing is now we are the ones buying the concentrates, we can optimize. Once again, we can optimize our raw material feed in a way that we were not able to do before. Actually, if you look at the results from last year, we had a feed of almost 20% higher nickel concentrate than the year before. This is partly as a result of us being able to choose the concentrates. Also, this is fun for us because now we also have a new product. We have nickel that we sell in that, and we had a good production during the autumn last year. Of course, I heard some questions before, and that is, how does Kevitsa fit into this? It fits perfectly, I would say. Right, Mikael? You will be our best supplier. Well, I said before, it's very, very important. It's not necessary, but it's very important for a smelter to have a stable base load. You get the stability, you know what you have, and then you can add on things that fits with your stable base load. Now we will get that for nickel. Maybe it's even more important to have that on nickel than it is to have on copper and zinc, because you know that nickel is an illiquid market. It's much more difficult than copper and zinc. We are very happy to actually be able to have a base load. Already today, you see we bring in Kevitsa, but depending on how we agree and so on, what happens in the future, it could be as much as 40% of the total feed to Harjavalta. You should also remember that Kevitsa is also a copper mine, and they have a very good copper concentrate. We like it. We use it today. It could also be a base load on the copper side. You know this, but Harjavalta is closely located to Kevitsa. I mean, of course, obviously, one of the synergies is having the benefit of the logistics. In this case, costs for transportation, and from my perspective, to have the reliable short-term delivery. We are very happy about this. Coming to my last example, and that is increasing our silver recovery in Kokkola, increasing the by-product of silver in Kokkola. Here we actually reached the design capacity in the second quarter last year. I know that we have communicated that we have some process instability problems in Kokkola. They are in the main zinc flow. I think right now we have them fairly under control. We have taken the decision to prioritize zinc production before silver because of the higher profitability. We could revisit that, but right now that's the decision. At the same time, we are working very intensely to develop the processes and make them more robust. I could also say that right now, talking about market trends, right now, silver content in the concentrate is quite low. That's also contributing to the lower outcome. Coming back to the question, well, the outlook going forward is, I would say the prices and terms, they will be more challenging. I'm convinced that with the strategy we have to improve operational efficiency, increase flexibility, and maximize the outcome of metal and by-product production, I'm convinced that we will continue to deliver solid earnings from smelters.

Speaker 16: Thank you, Kerstin. Let's open up for questions on the smelting side. Should we start with Daniel?

Speaker 4: Hi, it's Daniel Major from UBS. I think when we're sort of looking at this business, and sort of trying to model the earnings and the margins going forward, we obviously saw a substantial increase in earnings and margin in 2015. I guess there was a combination of external factors, the currency, et cetera, but it would be great if you could give us a sense of how much of that margin improvement was driven by internal factors and how much by the changes in the external terms, and therefore, I guess as a consequence, how much of that improvement you think could be maintained going forward if we get a normalization of treatment charges, by-product prices, premium, et cetera, as we're sort of seeing in the market at the moment.

Speaker 8: Okay. No, I mean, obviously, we have benefited from currency and prices and terms. I can't really answer your question, how much have come from the different contributors. I will say that we will continue to deliver the operational results in the same pace, or given all the activities we have, the target is, of course, to continue to improve that even further.

Speaker 4: Would you think that if you look at the margins achieved by the business, say, between 2008 and 2013, would you say you're in a position to deliver a structurally higher margin going forward as a result of the internal improvements you've made to the business?

Speaker 8: I would say so. A lot of things have happened since 2013. We have the e-Kaldo. We are expanding order. We have the new nickel business model in Harjavalta. We have a lot of things that have happened lately.

Speaker 4: Okay, thanks.

Speaker 8: We have a question. Yeah, we start with Amos, and then we have Philip.

Speaker 2: Hi, it's Amos Fletcher from Barclays. A couple of questions. Firstly, I was wondering, how long do the third-party offtake contracts last at Kevitsa? My second question is with respect to Rönnskär, and you're saying that, excuse me, as time goes on, you'll be able to accept more of the complex feeds. Is it really once the deep deposit is completed that we'll be able to see that reflected in the margin performance of the business? Thanks.

Speaker 8: The first one is maybe more suitable for Mikael or something we can come back to once we have finalized the acquisition. The second one, not all improvements are related to having the deep deposit in place. Some of the improvements we should be able to deliver already before 2019. Mikael, do you want to comment on the question regarding the Kevitsa?

Speaker 10: Excuse me, you have to repeat it.

Speaker 2: It was just the length of the third-party offtake terms or contracts.

Speaker 10: There is none that is more than three years. There is a portfolio, but none is more than three years.

Speaker 8: Then we have Philip.

Speaker 14: Philip Ngart, ABN Amro. A few questions on Rönnskär. I don't know if you've disclosed it before, but how long would it take before you've worked through your intermediate stock? What is the working capital release that's associated with that as well? I was also wondering if you could indicate what the mix of complex and clean concentrates is at the moment, and what it will be once you have more room to take in complex material, and what the potential maybe is even beyond that.

Speaker 8: Okay. The first question was?

Speaker 14: The intermediate stock, how long it would take before you-

Speaker 8: Okay. The improvement program is three years, the original plan was to be in balance end of 2016 or early 2017. Maybe that has been a little bit too optimistic, we will definitely deliver the 275 this year, meaning that if we still have some stocks, that could maybe be an upside also 2017, 2018. The plan is to treat most of the intermediates already this year. The second one was?

Speaker 14: Yeah, the working capital release. Is that directly the working capital release that-

Speaker 8: Yeah. That is something we had communicated before. Of course, that's dependent on the metal prices, I think Sophie you have communicated-

Speaker 16: Most of the intermediates restocking has. We did that already 2014 and also into 2015. Most of that has been done and seen in the cash flow, I would say.

Speaker 8: Also, of course, all the intermediates are not equal. Some are high valuable metals and some are lower valuable metals. You wanted to have an indication. That's why I indexed it.

Speaker 14: Okay, thank you.

Speaker 8: Do we have any more questions in the room here? Yeah, we have one more.

Speaker 3: Thanks. Christian from Nordea. Just a quick one. I understood that in Q4, you had to send quite a lot of volumes on sulfuric acid overseas. Has that situation improved in Q1, or are you still in that issue?

Speaker 8: Yeah. I would say that sulfuric acid market is still fairly tough, but it's not as tough as it was some years ago. I think there is quite a big demand in Europe. There are still overseas. I think it's not a great market, but it's not bad either.

Speaker 3: The fact in Q4, was that more of a temporary one?

Speaker 8: Yeah.

Speaker 3: Right.

Speaker 8: Yeah.

Speaker 3: Finally, on the SEK 75 million, that is run rate, I guess, that should be achieved by the end of 2016, right?

Speaker 8: Yes.

Speaker 3: Right. Okay.

Speaker 8: Oskar.

Speaker 13: Oskar Lindström from Danske Bank. Your ability to handle complex materials in Rönnskär, how unique is that? Is it difficult, or would it be difficult for others to replicate? If you could say, is it how much of it is based on the technical setup which you have at Rönnskär, and can you say that it's, to a certain extent, based on the know-how of the personnel and the organization?

Speaker 8: Yeah. Of course, a combination of both. Some of the unique equipment we have, we have the e-Kaldo, that's the biggest recycling of electronics in the world. We have the fuming furnace, which is good for taking care of zinc.

Speaker 16: The roasting technology.

Speaker 8: Sorry. Thank you. We have the roasting technology, which is one of the few in the world, which is very good for instance, to take out arsenic. We have quite some equipment. Then, of course, it's about experience. Rönnskär is a very complex process with materials going back and forth between the different processes. It's a lot about people as well.

Speaker 13: Difficult to replicate, maybe.

Speaker 8: Yes.

Speaker 13: Thank you.

Speaker 16: We will take the last question from our web audience. You mentioned that the Odda expansion is slightly ahead of timetable. Why is that?

Speaker 8: Yeah. Well, I will say Odda project, I was with the project from the very beginning, and what we did, we did a very extensive pre-feasibility study. I think we spent some 10 million NOK and a lot of months to prepare the project. I think that has been absolutely one of the key success factors. Also we had some of the key suppliers participating already in that pre-feasibility study. We have also been lucky to bring in good people, both internally, but also externally. A lot of these people were on-site in 2004 when we did the last expansion, so they know Odda very well. I think those are the main sort of key success factors.

Speaker 16: Thank you, Kerstin. We will now welcome back Mikael Staffas back on stage, but now in role as CFO. Mikael.

Speaker 10: Oops.

Speaker 16: I leave it to you.

Speaker 10: I thought I was running the show. Here we go. Yeah, now I put on my other hat, and I will conclude a little bit remarks as the CFO as well onto this and talk a little bit about the financials of what they look like going forward. I have not really the setup here that I want to have, but I think we're fine anyway. If you now start looking at 2015, we did have a strong performance. We talked about this before. We had an EBITDA that went up in a year where most people, it went down. We had an EBIT, excluding the process inventory evaluation, that went up. It went up a little bit for Mines, it went up a lot for Smelters, and it went up for the group. We had a year where we had our balance sheet strengthened and the debt-equity ratio came down to 23% with the strong cash flow in one year. Now it looks better here again. Good guys. When you start looking into what would have been with Kevitsa, what would a Kevitsa performance had been? We have issued this one before just to have a sense of what would it have been like had we bought Kevitsa on January 1st, 2015, and had it in for the whole year. Kevitsa did not have much of an EBITDA during 2015. In a year with such low nickel prices, Kevitsa does not produce much of an EBITDA, would have contributed a little bit positively, and on EBIT, Kevitsa had a zero EBIT basically. It would have not contributed anything, and the gearing ratio, net debt-to-equity, would have been up to 45% or a little bit more. These are numbers that you all know, and I just reiterate again, the purchase of Kevitsa was not done in order to get a short-term kick on the earnings. This is a long-term project that is under ramp-up, where grades will improve, volumes will improve, and it's a long-term asset. Also nickel prices should come up according to the consensus numbers. The cash flow generation, as we said, was quite healthy during 2015. It was up. Why was it up? It was up because of the Garpenberg expansion that gave a positive contribution. It was also up or I should say rather not down because of the Boliden mixture of businesses where we are not so dependent on the income of 1 particular asset or 1 particular commodity or the exchange rates, because when you mix these all in, it becomes actually pretty stable. Going forward, we have guided now from today, where we already before guided to have that we will be slightly short of SEK 4 billion for 2016. We are guiding for SEK 4.5 billion for 2015. 2016, sorry. I'm getting all the numbers wrong. For 2017, SEK 4.5 billion. Why is it coming up? There are things that are coming in now that was not really in the plans before or that are coming, but you knew about before. We have the environmental program in Rönnskär we've spoken about that starts kicking in in 2017. We have the Harjavalta sulfuric acid plant that starts kicking in. We have the Aitik investment that kicks in pretty much in 2017 that we just spoke about in my earlier presentation. All these things come in. On top of that, we have been for the last year investing quite a lot less than guided for. Why have we invested less than guided for? It's not that we've been able to figure out a way how to not invest. We have pushed things further out, and there's a limit to how long you can do that trick, and we're getting some of that stuff back again. It's also important to point out that these numbers are without Kevitsa in them. We will come back with the guidance on Kevitsa once we own that asset. I spoke about generally the stability that we have. I just want to reiterate this again. When you look at this chart here, you look to the left, you can get extremely nervous because you can see how strong our sensitivity is to different metal prices, how strong it is to different currencies and to the TCs. Somebody starts adding these together and says, "Oh, this is an extremely volatile company. Oh, my Jesus, it's going to go up and down, and it's going to be so volatile." In reality, there always has been, and we can have a long discussion why it's likely to continue to be, but it's always been a very healthy negative correlation between certain of these aspects. If you look to the right in this chart up here, you can see the metal price and TC index. This is the Boliden mix of metals and TC all put in together. That's the grayish scale that you see there. You take the Boliden currency basket and you index that, and you put that in. That's the blue index. You can see already here just visually that they are negatively correlated. When one goes up, the other one tends to go down. It's been the truth historically, and it's most likely continue to be the truth going forward, which means that when you look at Boliden overall, it is much more stable than you can first be led to think just looking at the sensitivities on the different aspects. Once a year or so, or I shouldn't say once a year, but we have done it once before, and now we're doing it again. We're actually providing some guidance on how this splits between the different business units. We don't always do this because we don't want to be too explicit around exactly what's happening in different parts. It's good to have this as an educational tool. Here you can also see how the different business models work. I think you know that we have a high sensitivity on zinc, which comes from mines, but also quite a lot of smelters because in the zinc business model, the smelters actually take pretty big risk on the zinc price with the price participation that's in place. If you look instead of copper, then you see that it is also relatively big for the group. This is almost all in the mines, whereas the smelters take a relatively small part of the risk of the copper price because the business model just works differently. You can also then here see clearly that when TC is very good for the group, when the copper TC goes up, that is very good for the smelters. The mines pays part of this. For zinc, it's also good for the group. Here we're much more balanced. It's good for the smelters, but the mines pays a large part of that because we are more integrated. When it comes to lead, we're actually negative because we're long lead mining, so we're mining more lead than we are smelting, and therefore, yes, an increase will gain for the smelters, but the mines would lose more, and the whole group would lose on such a change. Another thing that is important that we also guide for always afterwards in hindsight, we just had an annual report out for 2015, are the planning prices. Our planning prices and planning assumptions are vital for lots of things we do. They are the basis for the mineral reserve statement. They are the basis for all the investments that we do. They're also the basis for impairment tests that we do. They go through the whole business, and we only have one set of long-term assumption that we are using, 30. Somebody might be very quick and ask the question, "You did use this for Kevitsa?" The answer is no. When we come to certain areas, we do not always use these prices and terms, because for Kevitsa, I told you that we used the consensus prices and terms, which are not necessarily our own long term. We have reviewed our prices and terms that we do once a year. This is just to give you a sense of how we are planning for a year going forward. The bottom line to all of you is there is no big change. We have reduced our assumptions down on metal prices because we were slightly high compared to where other institutional consensus are lying. On the other hand, we have also adjusted the currencies in the opposite direction because of also where the present situation and where other consensus numbers are lying. Therefore, when you do all this math and you add it all up, and I'm sure you're going to put it all into your models, it is roughly the same. That's no big difference in terms of our planning assumptions going forward. Finally, I would just like to reiterate something that you all know and just to reiterate that this has not changed. We have not changed anything here. Our dividend policy, one-third payout ratio stays. The fact that the payout ratio stays means that we have risen dividends in a year like this when everybody else is cutting them down, we have higher dividends. The policy is the same and stands. Return on investments, 10% or above, going through all that we are working for when we're looking for this. This is, by the way, a real number, in nominal, it becomes slightly bigger depending on what you think about inflation going forward. We have a balance sheet target of a 20% gearing at the end of a good cycle and our concept was at the end of a good cycle. I usually put it a little bit in a different way. We have a point that if we're either at 20% or we have a good plan to get to 20%. Then comes the question, okay, what about now then when you're up to 45%? Do you have a good plan to get to 20%? When are you going to get there? The answer is, well, exactly when we're going to get that, we don't know because it depends on metal prices and so on going forward, but it looks fairly good and fairly strong going forward given the general cash flow profile that we have going forward. With that, I'll open up to questions from you.

Speaker 16: We have one question from Amos, I see.

Speaker 2: Hi. Excuse me. Amos Fletcher from Barclays. You just mentioned that you've been, if not undercapitalizing the business in recent years, but deferring capital you've been putting in. Which areas of the business specifically would that relate to?

Speaker 10: Well, I think that compared to what we have guided for, the environmental program at Rönnskär is slightly later than we had first guided for. We have the whole thing about the crusher in Aitik is later than what we had guided for originally when we set up the Aitik 45 plan. Then there are certain bits and pieces everywhere where we have been prudent or have been cutting down on CapEx or postponing CapEx is a better word. Those would be the main areas.

Speaker 2: Thanks. I have, excuse me, one more follow-up. Just with respect to cost guidance. From a lot of your peers, we've been seeing guidance for some quite big cost deflation coming through. Is there anything specific that you could give with respect to guidance for Boliden over the coming year? Thanks.

Speaker 10: I suppose it depends a little bit on what currency you're looking in. I would say if we look at local currency, I would say the best estimate for us is that we are around zero. We do have some cost deflation on some equipment and some materials, we do live within salary inflation, even though it's under control in our jurisdictions and with the typical collective bargaining, that would be slightly more expensive. We will say that zero inflation is a pretty good assessment for the whole in local currency.

Speaker 11: Ola Södermark, Swedbank. Is it possible to quantify how much of the CapEx of SEK 4.5 billion this is kind of postponed or CapEx from previous years?

Speaker 10: It's a little bit of a difficult one because, yes, there is some part of that which is postponed from previous years, we're also postponing something more out. The net might not be so big. I will just give you a sense just to get an order of magnitude. Originally, we guided 2015 at SEK four and a half. It ended up at SEK 3.6. Those SEK 900 million did not disappear. They will reappear at some stage. A large chunk of that might be in this guidance, something else has been postponed further out so that the net number will be smaller. I will not be more specific than that.

Speaker 11: Okay. Thank you.

Speaker 3: Thanks. Christian Kopfer from Nordea. Just one more follow-up on the CapEx. Could you also indicate, Staffas, a little bit, what are the CapEx approximately? I don't need exact numbers, but ballpark for Harjavalta, Rönnskär, and A45 for 2017.

Speaker 10: Well, for those individual pieces that we've talked about, they remain the same. We said it's roughly SEK 1 billion for the sulfuric acid plant in Harjavalta, and those things linked to that. It's roughly SEK 1 billion linked to Rönnskär and the environmental permit that we got, was it two years back? You just saw here is roughly SEK 1 billion in Aitik. Sir? No, these are numbers for those parts. Your question was how much of that will fall into-

Speaker 3: 2017.

Speaker 10: 2017.

Speaker 3: Just ballpark figures.

Speaker 10: A third of Harjavalta and a third of Rönnskär and.

Speaker 3: I think Harjavalta and Rönnskär are the big pieces here.

Speaker 10: Two thirds of the Aitik one.

Speaker 3: We have the Odda project, which is in the final stage.

Speaker 10: You have Aitik later stage. That's mainly 2016.

Speaker 3: The sustainable CapEx is still around SEK 2.6 billion or?

Speaker 10: SEK two and a half is what we've said, and we haven't changed that.

Speaker 3: Right. Okay.

Speaker 6: Jean-Guillaume Peladan, Sycomore Asset Management. Two question, short-term and long-term. On the short-term, what do you see about the increase or decrease of volumes on the customer side in your end market industry, automotive construction? The second question is a more long-term and strategy one. There is a slow phenomenon that we call the energy and ecological transition, especially in Europe. Europe is even heading this transformation. Do you think you will be positively or negatively impacted by this transformation, meaning more renewable energy, more recycling, et cetera?

Speaker 10: Good couple of questions. Let me just quickly. Number one, on the metal sales. Number one, we should be aware that we have metal sales, which is basically all in Europe. Even though we are impacted by prices, which is a global demand and global supply. What we're seeing in Europe from our customers, we don't see a big mix. We have change. We see a good, stable demand for our products. Whether that is that they are substituting some imports from outside Europe or not, we don't have very good clarity on that. For us, it's a relatively good and stable market as far as we can see. Now it comes to your second question, okay, what will happen to these metals in the transformation of the economy? I think there are many people that can answer that one in more detail than we can. Just have a sense, copper is crucial for any kind of renewable energy, and renewable energy will drive more copper. Renewable energy will drive more tellurium, which might be a very small product for us, but we like that. The usage of zinc should increase with a sustainable lifestyle or sustainability, not so much in Europe, but in other parts of the world, as corrosion protection is a very sustainable way of not having to produce as much steel. We think generally this should be relatively fine. nickel also looks relatively fine, but that's more linked to the consumer economics are catching up in places like China. That's when you start using more stainless steel, when you get into more higher income levels. It feels relatively good, and we are strong in recycling. However you look at the business cycle going forward in recycling metals, we have a strong position. I would say that we are well-placed for that development.

Speaker 16: Thank you, Mikael. That was our last question.

Speaker 3: That's it.

Speaker 16: With that, Lennart, the stage is yours.

Speaker 9: I guess we are all here for talking value creation. In a cyclical industry like ours, of course, value creation can be accomplished in many different ways. The big headlines are often by the more speculative strategies. Buying something very big, leverage the balance sheet, and hope for a better time on metals. That speculation-driven values or those are the big headlines, and they are immensely big at times. Of course, over the cycles, they normally don't work very well. In the end of the day, you fail and you go somewhere else. We are a completely different animal altogether. We are not a company of 10 or 11 assets. We are a group where we have synergies between the units. We are building on organic growth. We are developing technology. We are doing a lot of things in order to accomplish a better and better and better company. We call it New Boliden Way, the Toyota Production System in our version. That embraces, of course, a lot of technology, how we produce or build different projects, but it's also about organization development, how we interact, how we make flat organizations. We don't centralize as much as traditionally capital-intensive companies tend to do. We like entrepreneurship. We like to have very strict and very clear sort of guidelines and rules, but we also like people to take initiatives. Many of the best things this company has done of all kinds have been created out there without any top management understanding what is going on. We realize it afterwards, and we can talk on conferences how clever we are. It's really the proof of a high-quality company in our opinion. The other one is strategic positioning. Strategic positions, they don't just happen. They are a result of us trying to figure out things like this, renewable energy, or what is going to happen with the new copper mines in South America. Will they contain more arsenic, or what will happen? We try on the question, can someone copy what we are doing? I think you need money for it, and you need time to develop your competence to copy. We are not going to be there at that time. We are going to look for other things now. We look at leaching instead of or as a complement of what we're doing. Our units are becoming more and more complicated, and we have even difficulties to understand what we are doing because they are so complicated. That sometimes creates a little bit of less transparency when we talk. In the end of the day, we are delivering good results with a decentralized organization. Finally, if we are not in a speculative business, timing is still a factor, no doubt. We have been lucky with starting Garpenberg at a time when zinc was good. We were lucky with Aitik to come to the market with new copper capacity at a time when copper went up. Of course, it's nothing. We don't have the crystal ball that no one else has. There are a few things. The timing of Kevitsa, we don't know if it is good in terms of metal price timing, we are pretty convinced it's a good thing because we're ready with Garpenberg, and we need a new, good geological area to put our brains on. Timing is an unknown. It's very critical. We try to avoid a few things because you can also destruct value. If you take the big bets and you don't take the hedge programs, if your balance sheet is a little bit too slim, you should make sure that you can live through the troughs. We don't know exactly what combination of currencies and metal prices we're going to see, but we are on a yearly drill or a yearly exercise. We're putting in on our systems worst-case scenarios. Every year we do it. We don't do it because we are carried away and we are falling in love with a Kevitsa or a Garpen project or something. We do it every year. We're looking at cash cost curves. We're looking at a number of things. We say, "Okay, these are scenarios where we want to be able to be going through without selling, sort of distressed selling out assets at stupid value destruction or doing big impairments or having landing in the hands of the banks." We are trying to put our eyes on next trough. We want to be in a position where our stabilities and things are playing together. The times are difficult right now. We don't have the crystal balls, but we are trying to be as smart as we can be in order to avoid the bad risk scenarios. The bus is leaving. I have to stop here. I could, of course, talk for a lot longer. I would just say a last word. That is our team here. I think we have a great team. We have not had big personnel turnover. We have a lot of good people in the different units and in the different parts of the group. I am a very proud CEO of this company. Let's go to Odda. Thank you