GLNCY (GLNCY) Q2 2026 Earnings Report, Transcript and Summary

Good day, and thank you for standing by. Welcome to the Glencore 2026 Half Year Results Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Martin Fewings, Head of Investor Relations. Please go ahead.

Thank you. Good morning, good afternoon. Thank you for joining us for our first half 2026 results. Particularly welcome to those joining from Australia. Speaking today are Gary Nagle, CEO; Steven Kalmin, CFO; and also joining us is our Chief Operating Officer, Xavier Wagner. I'll hand over to Gary.

Thanks, Martin. Good morning from Switzerland and for those in other parts of the world, good afternoon, good evening and maybe a very early morning for those in North America and South America. We've put out our results presentation, so we'll take you through that. If we move into the presentation and start on Slide 4, which is a familiar slide -- should be a familiar slide to all of you is our financial scorecard, our half year financial scorecard, starting on the industrial side. Operationally, a very solid first half of the year. Our teams, our operational teams delivering production within the market guidance range. We continue to perform operationally 2 full years in a row within the guidance range. And now through this first half year within our guidance range, we've restated or kept our guidance for the remainder of this year. On the industrial side, a $6.5 billion adjusted industrial EBITDA. That's driven materially by a very strong Metals and Minerals contribution, up year-on-year, primarily driven by higher prices. There have been higher input costs, and Steve will talk a bit about that later as we get into the costs, but a very strong Metals and Minerals contribution. The energy and steelmaking coal contribution, also very strong. We've seen higher prices through Newcastle Energy Coal, driven up by higher LNG prices, and we've seen strong demand for steelmaking coal through the first half of the year. Again, some offsets through increased particularly diesel costs, and we'll go through those a little bit later. We've also seen some higher refining margins and given our refining exposure in both Singapore and particularly Cape Town, that's landed up allowing us to have a $6.5 billion adjusted industrial EBITDA for the first half of the year. On the marketing side, the $3.3 billion adjusted marketing EBIT, it's a near record first half result. I think we've only had one other half which has been higher than that. And that's largely as a result of disrupted energy markets, disrupted freight market, and it's created significant arbitrage opportunities, dislocations and trading opportunities. Clearly, we all know what's driven that and therefore, an exceptionally strong performance from our energy business, and particularly oil and gas, but coal also contributing nicely towards that result. On the Metals and Minerals side, also a very strong result, lower than last year, but you will remember that last year was a record year. So a very pleasing result on Metals and Minerals, but obviously not competing this year with a very strong oil and gas business. So the 2 together have allowed us to publish a financial result and adjusted EBITDA for the first half of the year of $10.1 billion adjusted EBITDA. And that's leading to a net debt of $10.2 billion. Steve will talk you through how that's made up and the contribution or how much of that is marketing leases and how we look at debt. A very cash-generative first half funds from operations, up 158% at $8.1 billion. And as a result, we're able to declare a top-up shareholder return this year of $1.5 billion. That's going to be $1 billion in cash and the positiveness and confidence we have in our business, we're also declaring a $0.5 billion buyback of our own stock over the coming 6 months. Moving on to Slide 5. It's a bit of a scorecard update of what we presented in December of last year at our Capital Markets Day on our copper portfolio and our leading portfolio that will take production back up to a circa 1 million tonnes of annualized production by 2028 and then our growth portfolio, which will take us to somewhere around 1.6 million tonnes target by 2035. And of course, that could be higher should we accelerate any of the projects beyond what we currently planned. So if we go through each of these in a little bit more detail, starting on the top left with Alumbrera restart, and you would have noticed the photo maybe on the front of the front cover of our presentation is the first blast in Alumbrera. The guys at the business have done a good job done, color coding that and color scheming the blast in the colors of the Argentinian flag. So very proud of that. And so we are ahead of schedule, in fact. At Alumbrera, we originally were expecting to see first production in the first half of '28. We now believe we'll see first production in the back end of '27. So therefore, an improvement on the schedule at Alumbrera. Moving on to the DRC, and we did announce this earlier in the year. But at KCC, we've secured the land package that was long-standing and something that we have been working for many, many years with Gecamines to secure. We've done that in a very good manner with Gecamines. As we explained earlier, that extends the life of mine of KCC. It improves productivity. There's certainly cost improvements as a result that comes out of that. And that gives us our pathway back to 300,000 tonnes of copper a year out of KCC, which underpins that 1 million tonnes a year by 2028. At MUMI, we've gated the feasibility study for the sulphides that was gated in April 2026. It will be followed by an investment committee review and that feasibility and project remains on track and on schedule. In Peru, Antapaccay, we got 2 boxes in Antapaccay. Maybe we can talk about them together. We did announce the acquisition of the Quechua land. That's completed and fully integrated within our business. The drilling program on Quechua will start soon. And at the same time, on Coroccohuayco, permitting and land access is advancing. Having both of those within the Antapaccay district gives us maximum flexibility where we can develop Coroccohuayco first or we may pivot and develop Quechua first and leave Coroccohuayco till later. It's just a hugely mineralized deposit and having more optionality within the resource base gives us material flexibility and upside. Back to Argentina, the bigger project there, which is MARA, feasibility engineering is underway. We will be submitting our environmental permit application in the coming weeks as soon as that's submitted, and that takes approximately 1 year to get approval. But once submission is done, there are no more restrictions or limitations in terms of being awarded the RIGI. Our RIGI application is in, and we expect a RIGI award soon after the submission of the environmental application. El Pachon, which is the big greenfield project on the border of Chile and Argentina. You would have seen that the Glacier Protection Act was amended and passed into law by the Argentinian government. That removes any of the existing restrictions around the Glaciers and our ability to now take that project into feasibility. A number of trade-off studies are being done. The drilling campaign has been substantially completed. We still do drill in certain areas to make sure we're not going to build infrastructure on areas where we may want to mine later. And we're targeting environmental permit submission sometime in the first half of next year. Moving up north to the United States, the NewRange copper nickel project, NorthMet land -- the NorthMet land acquisition package was secured towards the end of July. The Federal wetland permit application has been submitted also in July, and we're targeting to gate this to feasibility in the back end of this year. On Collahuasi, and I know Duncan spoke quite a lot about it on his call, the leaching restart is underway, and we do expect first cathode out of that leaching facility by the end of this year as well. In terms of the fourth line, the feasibility study is also underway. We approved it. The Board approved it in February 2026. That work is underway, and we continue to keep that on schedule. Moving on to Slide 6. We did announce this morning that we are going to establish a secondary listing on the Australian Stock Exchange. We're targeting a October 2026 listing. And our ambition is to achieve a minimum ASX 200 inclusion within 12 months. Now the ASX 200 requires AUD 1.5 billion of stock held on the ASX line. We believe that is fully achievable. And our ambition goes well beyond the ASX 200. We believe soon thereafter, we can, in fact, get ASX 100 inclusion, which requires approximately AUD 5.5 billion on the Australian line. Why do we believe we can get there? If you look at the green wagon wheel below, you can see what we've done in South Africa. In South Africa, a little bit like Australia, we have a secondary listing there. And organically and over time, we've built up a big shareholding in Australia -- in South Africa. We have approximately 8% of our register in South Africa right now held on the JSE line. That's equivalent to just under AUD 10 billion. So as a proxy for what we've done in South Africa, we can certainly see that as a read across to Australia, and there's no reason to believe why we cannot have ASX 100 inclusion in a short period of time. So why are we doing this? Well, the main reason we're doing this is actually a lot of reverse inquiry. Steve and I were down in Australia in the early half of this year, meeting with a number of investors, and there was a lot of interest in our company, very much interest in investing in our company, investing in our copper story and our copper play. As you know, the Australian Stock Exchange lacks material copper exposure, particularly with the -- with OZ Minerals and Metals Acquisition Corp, no longer being listed there. There are some copper exposure plays, but they are limited now. So there's an interest in our copper pipeline, our copper projects, our base copper business, but more generally in Glencore as a whole and the value creation that we're after in Glencore. We have a number of super funds who are invested already in Glencore, and we've had a number of them say to us that they are restricted in terms of how much they can invest in Glencore because of internal rules around how much needs to be invested on the ASX and how much they can invest in the offshore line. And they have said to us that if there was an ASX line, they'd be able to invest a lot more in Glencore. So we see the ability to access these pools of capital. There are very deep pools of capital there. The way the structure is set up around the pension funds and the super funds in Australia, where there's a mandatory contribution to these funds. These funds keep growing every year. And Australians are smart investors. They understand the mining industry given the nature of the economy. They understand it very well. And therefore, they understand our business very well, and there seems to be a growing demand for our stock. So the other benefit of the ASX versus perhaps some other exchanges around the world is the ability to get index inclusion on quite a mathematical and simplified basis. And as I spoke through it earlier on the slide, our ability to get into the ASX 200 and ASX 100 over a period of time. So that provides us enhanced financial flexibility, having ASX securities as well. And it's really underpinned by the fact that we have a very large Australian business. We have over 17,000 direct employees. We contribute materially to the Australian economy. We produce coal, we produce copper, we produce zinc, we produce nickel. We're well known in Australia, and it makes a lot of sense for our company. And with that, I'll turn it over to Steve to take you through the financial performance.

Thanks, Gary, and welcome all to today's half year results release call. I'll run through some slides, some of which should look very familiar to you as we've been through reporting cycles over the many years. The first slide on Page 8 is really some high-level numbers, many of which Gary has actually covered on, and there will be further detail at least on marketing and industrial and debt outcomes as we have later on. Maybe calling out a couple of numbers that won't be covered later on. They tend to be less relevant in terms of cash and valuation, but net income, $4.4 billion for the half was a very strong addition to the equity base within our books. We did have $700 million of significant positive items, and there was $600 million or so of gains on disposal of assets. We sold a small parcel of our Century shares during the year to bring us down to 30%, comfortable being at that level. It was around $0.3 billion. We also continue to look at accretive opportunities around the parts of the portfolio, maybe end-of-life assets. We sold the Kidd mining operations in Canada also in Q2. And with that structure, that also released some large rehab provisions that we otherwise had, and that reported a gain of also about $250 million, $300 million. The other point just to call out on this first slide is increase in the readily marketable inventories as that doesn't sort of work its way down into net debt, but you would expect an increase in this environment. Number one, prices is going to correlate with that particular -- we got certain volumes. There were price increases across many of our key commodities in which we do hold reasonable inventory positions. So price was a major factor and the major factor. Brent prices from the start of the year to June went up 20% into the $73 a barrel. Zinc prices from start to finish up 16%. Copper was also up 7%. There was also some higher volumes in some commodities. Some of the disruption across Middle East conflict has created longer journeys, different freight routes, global trade friction. So that days on hand generally in inventories has ticked up a little bit, as you would expect in this particular environment. The shape of the wagon wheel at the bottom is a good shape around the diversification contribution of the business. Copper on the industrial side was the strongest business, particularly now that we split steelmaking and energy coal into its own separate components. Marketing was obviously a large contribution as well. We're quite diversified and a very solid copper existing and growing business, particularly, as Gary said, with the expansions back to 1 million tonnes and ultimately 1.6 million tonnes. On Page 9, if we just focus on the industrial performance, I'll look at the waterfall bridge on the next slide, which is most telling around the materiality of the various movements. But overall, this business was up 72% to $6.5 billion. High commodity prices is the key feature, offset by some input cost increases, not some quite material Middle East conflict, both direct and indirect secondary effects. We'll look at that later on. Stronger producer currencies as well we had across particularly Australian dollar and the South African rand. The metals business was the largest increase and is the largest aggregate industrial business, up from $2.4 billion to $4.5 billion. The higher metal prices, we'll see the impact of that on the next slide. Positively, we also had quite a strong volume performance, contributing a positive variance across the metals business, particularly higher copper and cobalt sales now that we are able to sell some cobalt given the quotas that are now working in the DRC and we're delivering into our quotas. The copper business itself -- overall copper went up from $1.1 billion. We'll look at a slide later on to over $3 billion of EBITDA contribution this year. And pleasingly, the African business, which just 12 months ago posted very little EBITDA of only $0.1 billion was up to over $1 billion. It went from $0.1 billion to over $1 billion of EBITDA during this particular, and that was very much volume. You need the tonnes given the size and scale of those operations. We did increase production by 55,000 tonnes during the period out of Africa from 83,000 tonnes to 138,000, which was up 66% as well. We are going through a period of lower gold production out of our Kazzinc’ operation. It's transitioning to -- ultimately to an underground operation. It's also expanding deeper in the open pit. There is some investment. It's going through a lower period. And at some point, that will snap back to quite material gold production, not dissimilar from where it's been in sort of historical periods. We'll look at some of the offset from the landed prices for diesel, sulphur and sulphuric acid on some of the next slides. The energy business made up of coal, but also our industrial oil footprint that we have as well, somewhat gets lost within the overall Glencore. But if we look at the bottom there, we did post a $300 million increase out of the oil industrial. There's a small upstream oil and gas portfolio, but we have the refining business, particularly down in South Africa, around 100,000 barrels a day of processing capacity. And overall, the oil business went from $164 million to $432 million. And coal benefited largely from increases in both energy coal as well as steelmaking coal, energy coal getting a bit also from the LNG availability that we had during this particular period. The industrial bridge, as I mentioned, before, at $3.8 billion to $6.5 billion. As often the case on the slides, price tends to out feature many of the other variances given exposure generally within this industry. So $3.8 billion positive price movements. Within that, our overall copper business was $1.8 billion. The zinc business was $0.5 billion; nickel, $0.2 billion and the other $0.3 billion and the coal business added $1 billion of positive price variance. You can see on the bottom left, we've noted some of the major contributors in terms of average price increases of copper up 39% period-on-period, zinc 22%, gold 52%, 100% and the various coal complexes as well contributed. Pleasingly, and we would hope to -- hope and expect to report increasingly positive volume variances, particularly as the copper growth moves through to the '28-'29 period and then into the '30s as well. Period-on-period, there was a net $200 million positive volume contribution. That was primarily out of the copper business, which was $0.6 billion. The biggest contributors there being Africa, which I mentioned before as well as Antamina, which increased its copper production during the period 50% at the expense of lower zinc. It's going through a higher copper, lower zinc period. So large contributions from Antamina. The zinc business itself was down $0.3 billion there, primarily the gold exposure that we have within the Kazzinc’, which is a byproduct out of our Kazakhstan business. And EVR dropped $0.1 billion of volume variance in that period with being lower on recoveries and yields. We expect an H2 recovery as we'll talk later on. The cost variance, as you would expect in this environment, just given the nature and scale of our business was a negative $1.1 billion. Two major impacts to call out was the direct energy inputs, which is diesel, mainly affecting our copper and coal businesses where you have some large scale, big fleet utilization, high open pit operations that we have as well. And you had also secondary Middle East impacts, particularly at our DRC assets in relation to sulphur and sulphuric acid. We do expect much of what's in that cost variance to be relatively transient once there's resolution and [indiscernible] markets and supply chains normalize out of the -- out of what's happening within the Middle East, you would expect those prices across all those categories to return to some sensible level compared to where they traded within Q2. To give you some sense on some of those price variances within Q2 Brent price, for example, that averaged $91.3 a barrel compared to $61 at the beginning of the year. So that's up 50%. That's just on the crude side. the products were actually significantly higher as there was a scramble to secure both feedstock as well as the demand that came from inventories and the like. Within Australia, where we're a big consumer of diesel, there was record Australian diesel premiums, which is the premium both for refining capacity and physical delivery that was on top of the Brent crude that we see on our screens all the time. Within DRC asset prices compared to budget, which is where we would have thought around price points at the beginning of the year or cost points, DRC asset prices up 40% for us against budget. And sulphur price at Murrin, which is a big user of sulphur as part of HPAL process against budget, we were -- it was up 67% sulphur prices. So there has been a big cost impact, as I said, largely transient. How long this lasts for is anyone's guess at this particular point. I suspect for as long as it lasts, we'll see negatives in cost, but we're going to be compensated more out of the price impacts as that supply is generally constrained within those businesses. Currencies were Australian dollar a bit stronger. It was 0.3 of that 0.4 and South African rand was 0.1. They were both up around 10%. Positive variance within the other I mentioned before was the stronger refining contribution coming out of the oil business. If we look at marketing on Page 11, very strong contribution, $3.3 billion, as Gary mentioned, up 142%. Largely, the increased delta was out of our oil and gas business through its various products from crude to gas to refined products to freight and the likes. Just mathematically, we thought it useful. I think the graph on the bottom right is very useful around the very long-term history, 19 years track record within this business is where we've been within that range. You can see a strongly and consistently cash generator over the cycle. It's allowed material distributions back to shareholders, reinvestment within growth in the business as well. The big spike out there, the $6.4 billion was back in Russia-Ukraine period 2022. What we've done just to plot a number, we've taken the half year of the $3.3 billion and we've looked at the midpoint of the middle and top end of our current range. So our range is $2.3 billion to $3.5 billion. The midpoint is $2.9 billion. So we picked the midpoint of that and the top end, which is $3.2 billion and that's where you get the $4.9 billion. Just to put a mathematical placeholder, I think, as Gary mentioned, basis conditions, that's sort of a good sensible number that we think is neither conservative nor necessarily aggressive. We'll need to see how the world plays out over the next sort of 6 months. July started off reasonably well as well. So you can see a very strong performance, more recently, consistently achieving above the particular range. If we look at the net debt capital allocation, again, the graph that we show from opening net debt to closing net debt of $10.2 billion, a reduction of $1 billion. Strong cash flow generation, $8.1 billion that we have there. We'll look at a slide on CapEx later on, but there was cash flow of $4 billion expensed during this particular period. There was some either one-off and nontraditional CapEx, which I'll talk to. There were certain payments that we made to affect the securing of land at KCC, which we announced back in February that after many, many years had reached its resolution and that liberates and allows that business to reach its full potential as we go forward. And we're starting to also spend more money than historically around, as Gary went through those slides on the copper pipeline, something like in Antapaccay, Coroccohuayco, we're starting to secure some land and various other early works that's happening towards progressing those particular projects. So we split out CapEx later on between what's the more traditional CapEx and then we've got our copper growth projects. We're starting to spend a bit more money in copper growth, which I think is evident that there is both movement and momentum within that particular area. We generated $0.2 billion of net investment disposals. Primarily, there was $300 million small parcel of the Century shares, which we sold in Q1. Increase in non-RMI working capital. This had to be very tightly managed and watched and controlled and monitored clearly during a period of high commodity prices, increased volatility, very large margin call environment that we had as well. This was fairly modest compared to the big outturn that we had back in 2022. And the big difference here is that it's been volatility more at the shorter end of positions and shorter end of delivery of oil and gas and metals and the like. Back in 2022 was very much on the LNG story where you had movements around TTF that was many multiples of what we've seen in this particular environment. But at $0.9 billion, I think it's been quite well managed and quite controlled within that, $0.4 billion is non-RMI inventories. We've got some cobalt in Africa. I'll talk a little bit about that later on until we're able to ultimately export that and sell it into the markets. $1.2 billion, the net margin calls and physical forward transactions. We went to town across sort of how that all works in terms of the working capital cycle. That was quite well managed, quite well contained. We'll see subject to prices and variations that that may unwind. It may stay there. It's subject to obviously the trading book and the likes and volatility in prices as we move through. But I think you'll all agree, given the marketing earnings of $3.3 billion and the volatility and how much has been put on the balance sheet, that's been well managed and is relatively modest with good paybacks in terms of working capital. There's also a little bit goes through this category that doesn't necessarily sit on the balance sheet, but it just sits in working capital on the cash flow statements where we spend rehab to deliver on our rehab obligations and bring down that provision. There was $0.3 billion that was spent there. That's not coming back. That's obviously more akin to an operating cash flow. Pleasingly, it's worth noting, I know some of you track that, our rehab provision, if you look at the balance sheet actually came down $700 million or $0.7 billion. $4 billion of that did relate to disposals of subsidiaries. We had Kidd, we had Lady Loretta. We had a Colombia port, all of which had some rehab obligations that we've discharged that over to the buyer. So I think all very accretive transactions, notwithstanding that they may not have generated upfront cash to bring down the rehab liability by $0.7 billion during the period and $0.4 billion just basis disposals, and we'll continue to look for opportunities that may present themselves there. So our debt was down to $10.2 billion. If we just jump on to Page 13, how we thought about capital returns is fairly consistent with how we've approached over the last 12 months, starting at the -- taking out the marketing leases and the second shareholder distribution from the one that was declared at the beginning of the year, that would get our pro forma net debt, if you like, back to the $10 billion. But as we've done over 3 periods now, we do have the value of the Bunge stock. It's worth currently about $3.5 billion. It's out of lockup at the period, do not expect us to be doing anything necessarily tomorrow or soon or anything that's disorganized or messy. We're looking for a longer term or not necessarily longer term, but maximum value creation for Glencore over how the asset is ultimately monetized, working in coordination with the Bunge team. We're very supportive of Greg and John and the team and what they're doing. They posted good results the other day. The business looks like it's got momentum. There's good synergies. We like the thematics of everything going on. We're happy to sit on that stock for a while as we navigate the best pathway towards eventual monetization. But it's now -- it's liquid. It's a strong valuation. It's surplus capital in our view. And we think it's both conservative and appropriate from a shareholder perspective to be dispersing already or to be advancing some of the eventual monetization of that towards shareholders. That's where the $1.5 billion, we've chosen the $1 billion of cash, $0.5 billion of buyback. If you look at that in relation to $3.5 billion of value, $1.5 billion, that's only around 40%. So that's quite conservative. That's roughly a thinking that I think is sensible. We'll continue to think around in advance of eventual monetization that 40%. So it still retains $2 billion of surplus capital beyond the $1.5 billion that we have announced today, split between cash and buybacks. We look at the capital within the business as well. The main thing to call out relative to guidance at the beginning of the year, which was $6.5 billion. We've pushed that up 5% on average over the 3 years to reflect the inflationary environment that we've been in, somewhat higher than, I would say, general CPI. You've had factors across weaker U.S. dollar, high energy cost, general industrial capital goods. If you go out there and secure Caterpillar machinery, your dozers, your excavators, you want to put a construction project out there, civil engineering, you would generally find that you'd be looking at 5% over a blend of projects that we have. Some are more expensive, some are less expensive, some in different currencies, some have efficiencies. But 5% is what we've applied across having done some thinking and some work and looking at some tangible tenders that have gone out for some of these projects. The first half of the year, the $3.9 billion is what's been capitalized on to industrial CapEx compared to $3.4 billion, something to call out, which is what I referred to earlier on is that most of that increase was in respect of the copper portfolio investments, particularly to secure land access to support that copper growth and operational flexibility. So if you look at the bottom down there, $0.3 billion was spent to secure the land access at KCC. That's all been done. It's all registered. We're raring to go, and that's all part of the future sort of planning and we'll be delivering quite soon on that particular package that was secured at Antapaccay, Coroccohuayco also one of those projects as well. So $0.3 billion, some ongoing spend across MARA, El Pachon and NewRange and the like. And you can see on the top right, copper is where the big increase period-on-period. It's a lot of it is to do with those copper growth projects, but generally 5%, probably tracking similar annualized at the first half to where we are at the second half in terms of that in terms of the run rate of the $6.8 billion average, were always expected to be a little bit higher in the year 2026 over '27-'28. There is a heavier CapEx investment period, particularly at EVR. As they finish up their water retreatment projects that then tapers off in a year or 2 and finishing up a few projects, which we're wrapping up now around Onaping Depth and some of the Collahuasi growth projects that they've had in the past. If we look across to Slide 15, I think it's important to just take stock of the results where we were for first half. We'll then roll into cost evolutions and that then give you a 2026 full year illustrative EBITDA guidance. It's good at dissecting the $10.1 billion. Page 26 has all the details and the numbers within the appendix. But the copper business on the left, you can see period-on-period went from $1.1 billion to the $3 billion. And volume also helped there, particularly not -- it wasn't only prices and costs that came down, but we're up 15% in volume within the copper business. As I said, Africa was plus 55%, Antamina plus 28%, and we lost MICO, the Mount Isa copper operation, which shut around July last year. Realized prices was up about 40%. Costs actually both volume and primarily on a volume basis, we actually were down at $2.08. We were down from $2.25 in the first half of last year. So a strong margin and strong contribution on the copper side for the first half with good volume momentum coming through. The zinc business compared to 12 months ago was $0.9 billion to $0.9 billion notwithstanding that we had some volume reductions as well. Lady Loretta, another mine that's part of the Isa complex shut towards the end of last year through end of life. There was volume reductions down there, but higher realized prices, costs sort of as you were, and that's with the lower gold prices as well. The steelmaking coal and the energy coal, we've seen margin expansion across both realized prices, portfolio realized prices at $206.9/t for steelmaking coal was up 24%. Energy coal was up 19% on $93.9/t. And EVR or steelmaking coal tracking a little bit lighter in terms of volume. So you'll see a pickup in H2 when we look at the full year '26 outcrop as well. So all the details are back in -- back on Page 26, if you want to look at that. I think important to just focus on costs, and then we'll wrap up with a '26 illustrative number across the zinc business, A very strong byproduct business, of course. Yes, we produce zinc, but we produce a lot of gold. We produce silver, we produce lead as well within that business as well. Compared to the beginning of the year, earlier guidance was for a bigger negative. The main difference as to why it's still negative and slightly lower negative is to reflect the fact that the precious metals byproduct value has decreased in mark-to-market terms since where we're sitting here in February. Gold prices were $4,854 and now a little over $4,000. Silver was $82, now $58.7 as well. So that reflects in lower byproduct credits and a slightly less negative cost per tonne of zinc produced within that particular business. What we have done is reflect in the full year number, the sale of Kidd on the 1st of June 2026, which actually implied a production upgrade because we didn't change our overall zinc guidance for the year which was 20,000 tonnes of zinc. Both those extra zinc volumes as well as the fact that there is higher sales expected H2 over H1, all of that contributes towards actually a lower full year cost for zinc compared to the first half. You can see we've gone from pre-byproduct $2.83 to $2.54 somewhat counterintuitive given cost evolutions, but strong volume benefits and the upgrade also the volume that we have over there. Within the various coal businesses, relatively modest increases from cost guidance from February, notwithstanding some of the higher prices, particularly on diesel. We haven't assumed -- we've assumed going forward that there is some moderation, Brent crude in the $70s. Q2 was obviously much higher than that but that correlates with prices to some extent as well. We've had some favorable FX, particularly in Canada. And in both businesses, steelmaking as well as energy, there is some uplift in volumes from H2 to H1. So in both those commodities, you've got the full year cost performance coming below where H1 '26 is as calculated, which 2026 forecast is an average for the year. So the actual outturn for the second half will even be lower to deliver that mathematical blend between the 2. We'll look at the outturn on that also later on. The copper unit cost, Page 17, slightly busier slide, but worth just spending a few minutes on this, given where we've seen some of the biggest impact, particularly in costs having to be absorbed, bigger byproduct impacts, streaming impacts and a little change in what we're doing also around operational efficiency and value-add initiatives that we're doing within the Africa business. The first area just to call out, and we highlighted that both in the production report in Q1 and Q2 last week was that now we're increasingly not taking the cobalt production to its final salable hydroxide form. There's multiple benefits in that. There is some variable costs in doing that, but it's also more energy intensive, it's reagent intensive. It's space intensive, the security concerns around bagged cobalt. So we're releasing it more into solution, which is quite far into the process when we do come back and liberate that and produce a final hydroxide for future sale, that's quite easy to do, down the track. That's also why we're seeing reported cobalt production much lower in the levels that we're going through and you can expect that and why cobalt production -- final cobalt production guidance was withdrawn a while ago because this is a month-to-month, quarter-by-quarter proposition as to what's the most value-accretive way of doing that. The implications of that is that the cobalt in solution on the balance sheet at least is capitalized at a much lower value than what hydroxide would be. This has led to a temporary noncash increase in the derived costs of $0.11 per pound compared to the February guidance. This is clearly going to reverse as the material ultimately gets processed and sold. And when it does do, it's going to artificially reduce the cost that we then report at that point because we've already expensed the cost at this point and are capitalizing at a very low level. So there was $0.11 impact there relative to guidance that we were at the beginning of the year. Mathematically, that would have translated that's about $200 million of increased -- of reduced EBITDA and a high unit calculated cost on a full year basis of 810,000 tonnes of sales. The other key area, which we've tracked the February guidance on a pre-byproduct from $2.32 to $2.77 is very much these transitory effects around fuel, sulphur and sulphuric acid. DRC assets for us are incredibly exposed to these costs, both in its location, landlocked, freight advantages, clearing borders, taxes, impasse, everything that's logistically involved in securing and keeping critical levels of supply there. The other thing we're producing cathode and not selling concentrate. We haven't got the benefits of the low TC/RCs that comes through the Latin American portion as well that we have. So location processing methods are very relevant over there. We've shown in the graph at the bottom, $0.30 per pound of fuel sulphur and sulphuric acid. And the graph on the right shows how the evolution of those prices, landed costs across what is fuel in Latin America, fuel in DRC, sulphuric acid and sulphur in those prices. You get the triple whammy of the landed cost, not only product price, you've got to deal with freight, you've got to taxes and duties. There's all these elements that ultimately manifest. We think these are transitory. They are part of our -- part of the cost base. And the focus very much in Q2 was on security of supply. The instructions here from the teams, from copper, from the procurement teams was do what we need to do to make sure that this asset continues to focus on production, deliver production. There's no controllable losses, pay what you have to do, work out what you do, switch swap, whatever sort of was necessary at the time. And clearly, the -- that was important to get through what was a very sort of unpredictable and sort of crazy period around raw materials and the likes. All of this, if you look at the copper growth we've delivered on tonnes, you look at the EBITDA performance in Africa, for example, first half 2025, $45 million. H1 '26, over $1 billion. The key is to get tonnes out the ground there. And if it costs you a little bit more because you need to focus on the -- on just making sure that you secure these products and materials, then that is what it is to some extent. Of course, we're not going to be wasteful. We're going to be thoughtful. We're going to be sensible. We're going to create competition in the market as much as possible. That's had a large impact in where we are today, at least for a full year outturn of $0.02 or $0.03 a pound on mine cost and then you add a little bit of -- and then the byproducts and some of the streaming effect that does work its way up through the system. We think that's given those costs and the key thing out of this business in this environment, $14,000 copper, we won tonnes. In terms of how that's -- how that translates then into the illustrative 2026 EBITDA, we focus just on the copper business off to the left. So this is baking in 6 months of actuals and 6 months of indicative results for '26 basis the curve that prevailed around the end of June and the cost environment that we see for the rest of the 6 months as well. Production mix doesn't have as much of an impact around copper, zinc and energy coal, the one we'll see later on at [indiscernible] where second half, first half is 44% and 56% if you look back at our production report, which we showed as well. So copper at 840 kt production, slight upgrade given there was previously some Kidd tonnes of around 10,000 that was in there at a realized price, conservative now against $14,000. I think that was using $13,500 or so was the price. So if we ran this at a true spot number today, you'd find some high numbers within the copper business. And overall, $6.5 billion with a bit of development project coming through. On the zinc side, you're at $1.9 billion. On steelmaking coal, you're at $2.7 billion. That's much higher than what we were in the first half, which is $1.1 billion. So you got $1.6 billion in the second half, and that is very much an H1, H2 split where we had 13.5 million tonnes in first half, 17.5 million tonnes in the second half to give the 31 million tonnes full year. And energy coal is 1.1 million tonnes, again a slight tick up in terms of volumes as well. Annualized pretty much the other, which is the oil, the aluminum, the ferroalloys, the nickel and some corporate overhead. And that's where I spoke about the $4.9 billion EBIT number on marketing, which was first half plus half of the half of the top end, and that gives $5.6 billion of EBITDA. We were $3.6 billion for the first half. So you've got $2 billion modeled for the second half, all of which this shows a sort of extrapolating out pretty much 1 plus 1 equals 2, around $20 billion of our $10.1 billion, where you do have a pickup within the industrial business, some in copper and some in steelmaking coal. So with that, I'll hand back to Gary, a lot of good momentum and cash generation in the business.

Thanks, Steve. Very comprehensive review. We'll finish off just where we sit for 2026, our priorities and how we're uniquely positioned. Sadly, we have had a regression in some of our safety measures and metrics. We've lost 4 of our colleagues through 2 incidents. This has been a real wake-up call for us in this business. Safety is our #1 priority every single day of the week in everything that we do. We've made tremendous progress over the years. And having these 2 incidences and losing 4 of our colleagues has been, as I say, a wake-up, very jarring for us as management, very difficult for our operations. There is significant work being done to redouble our efforts to strive for zero harm and 100% safe environment for our business. We're learning from these. We're working hard. We're doubling down, and this is not something we can accept. It is our #1 priority. In terms of our business and our operational excellence, we continue to deliver operationally in a disciplined cost manner to make sure we get the tonnes out as we promised to the market. Our first half production guidance or outlook or output has been delivered within the guidance, and we're on track for the full year guidance to meet our full year guidance. Costs have been impacted, as Steve took you through, by some of the very higher diesel, sulphur and the likes. But operationally, we're very comfortable with how the business is performing across the board, both on the bulks and the metal side. Organic growth is a key priority for us. I took you through a slide, I think it was Slide 5 on our copper portfolio, our leading copper portfolio, which we continue to derisk and successfully grow. We're well positioned to achieve our 1 million tonnes of baseline copper production by 2028 and our 1.6 million tonne ambition by 2035. As I said, that 1.6 million tonne can be higher if we decide to accelerate and do multiple projects at the same time, depending on market conditions. And as mentioned earlier, and very pleasing that even the Alumbrera restart ahead of schedule, and we're hoping to see tonnes in the back end of '27 as opposed to the first half of '28. So that's ahead of schedule. We maintain a very strong balance sheet and a commitment to a minimum investment-grade credit rating. So a very strong balance sheet, very cash-generative business. And that all ultimately leads to what we here for at the end of the day, which is value creation for shareholders. We want to deliver predictable base shareholder returns, and we top up when our framework allows that. During the course of 2026, we've announced $3.5 billion of returns to shareholders. And to enhance our share registry, we've also announced today our listing in October on the ASX Exchange. And with that, we'll turn it back over to the operator for Q&A.

[Operator Instructions] We will now take our first question from the line of Jason Fairclough from Bank of America.

Two quick ones from me. First would be just on your new BFFs in the DRC, so Orion Critical Minerals and the DFC. I'm just wondering if we could get a bit of an update. Has anything happened since the nonbinding MOU back in Feb?

Thanks, Jason. Thanks for your question. On Orion, yes, we're making very good progress with Orion CMC. They've got a very good team working on the due diligence. We have had some -- a slightly slower process than both of us would have hoped for because of Ebola. Not that Ebola is impacting our operations. In fact, the Ebola area is nearly 2,000 kilometers away. So it doesn't impact our operations. But as you know, there's some travel restrictions into the DRC for U.S. or people who need to travel to the U.S. If you go to the DRC, you cannot travel to the U.S. for 3 weeks afterwards. So the ability to get to site and complete due diligence and meet with management and things has been slightly slower than expected. But we are making good progress with them. We do expect in the second half of this year, this half of the year to be able to finalize that process.

Okay. Second question, just on trading and if you like your self-imposed risk limits. If we go back to '22, we had that extreme volatility on the back of the Ukraine war. And I think you ended up having to go to the Board to get exceptions for exceeding risk limits. Now we haven't seen similar announcements this time. I'm just wondering, is it -- how different is it? Have you changed the way you manage risk in the trading business at all? Or is it just a different situation?

We -- I mean, if you took at pure metrics of VaR, you haven't seen the extreme swings that you saw in 2022. We have had -- we've kept our Board fully briefed on where we are. There have been some waivers, but at a much lower end and much less extent than we saw in 2022. The volatility hasn't been extreme -- as extreme. If you remember in 2022, you saw thermal coal prices hitting $400 a tonne. So you had much more extreme volatility in '22, which meant that these breaches of any VaR limits and the waivers that we received from the Board were something that was -- became all recourse in '22. In '24 -- '26, yes, we've seen much higher VaR and implied volatility in the market. There have been certain areas where we've gone to the Board for waivers, but it's been at a much lower limits and much lower breaches than we saw in '22.

We will now take the next question from the line of Liam Fitzpatrick from Deutsche Bank.

Two questions from me. First one on the ASX listing. Can you share any of your own analysis in terms of how you think this could improve your multiple over time? And how high do you think the ASX ownership could get over, say, the next 2 to 3 years? And then the second one, just also on disposals. Any commentary on Kazzinc’ and what's going on behind the scenes there?

Not much we can say on Kazzinc’. Liam? On the ASX, look, we -- as I said earlier, we've had a lot of reverse inquiry of investors who want to invest in our share. They see the implied value in our share. They see the underlying value. They see the growth story. They see our copper portfolio. They see the cash generation of this business, the quality of the business, and they want to invest more in our stock. For various reasons within their own funds, they are restricted on what they can invest. So very pleasing that we can put this listing down in Australia and see that demand eventuate into holdings in our stock. And with that extra demand, we would naturally see a potential multiple re-rate or multiple uplift. In terms of the volume or value or let's say, the volume or percentage holding of our stock in Australia, I mean, it's not -- there's no hard and fast rule here or hard and fast goal. We do have an ambition to at least be ASX 200 within 12 months. That's AUD 1.5 billion on the ASX line. We do certainly believe we can get to the ASX 100, which is AUD 5.5 billion, give or take, AUD 5.5 billion on the ASX line. And what gives us comfort on that is, as I said earlier, is on the South African line, where we have 8% of our register in South Africa, which is close to AUD 10 billion. So there's no reason to believe the Australian market, which also has that same level of understanding of the resource industry, interest in mining and also for different reasons, some capital, which is restricted in some shape or form from being able to invest in us in the London line. So there's no reason to believe we can't get any close to the South African line or even beat the South African line in terms of the amount of value sitting on the Australian line.

We will now take the next question from the line of Matt Greene from Goldman Sachs.

Congratulations on the results. Steve, if I can just ask you on the $1 billion cost-out program. How is that tracking? You've touched a lot on the presentation today on some of the external cost pressures, but I think overall costs were reasonably well contained. So how much of this has been external? And perhaps you could just touch on the controllable cost increase that you've seen and how that sort of ties in with the cost-out program.

Thanks, Matt. I'm actually pleased you raised that because it is a call out to the teams that have been focused also on that continued journey. It was 12 months ago, we were sort of had the target, and we said that half of that we expect to be delivered in 2026 already. So they were relatively -- I mean, 2025, they were pretty well advanced. So that was locked in. There was about $1.5 billion came through the business by the end of '25, pretty much at target around sort of where we are at the moment, 80%, 90% of the way there. So that would have been somewhat, unfortunately, sort of outshadowed and outflanked by some of these other sort of external factors. But those at least when these transient factors on cost and fuel and diesel reverse, those others have been permanently delivered and permanently embedded in the business as well. So that team has done a good job and they have delivered.

That's great. And Gary, perhaps one for you, more of a hypothetical question. We're seeing, obviously, copper concentrate market has been incredibly tight and spread between benchmark and spot TC/RCs is pretty wide. Some of the miners seem to be -- there seems to be a bit of momentum here to move away from benchmark. So I just wanted to ask what's Glencore's view on where this market could evolve into next year? And on a net basis, what could it mean for your company?

I mean, yes, it makes sense given the dynamics that we're seeing in the market that the long-term benchmarks -- and we've seen it in many other commodities, Matt, where you've seen, for example, the -- I mean, it's a small thing, but the chrome benchmark has fallen away. The Newcastle coal benchmark is virtually nonexistent anymore. Having the long-term benchmarks within a market that is -- which trades more and more in the spot market and is more volatile, it makes sense to come -- to actually trade these things more in the spot market than have these long-term benchmarks. So not surprising. For us, it's very -- we have no problem with it, given that we're a producer, but important, a trade marketer as well, where we can take advantage of the continued volatility and movement in these differentials and the TC/RCs. So for us, we think quite beneficial.

We will now take our next question from the line of Myles Allsop from UBS.

Great. Maybe a few quick questions. The sale to Orion, if we annualize first half, it's 4.5x EBITDA. And yes, that's before we're seeing the Mutanda expansion and KCC operating fully. Are you sure that, that's the right move to kind of lower kind of your ownership at such a low valuation? That's the first question.

Good question, Myles. What we've agreed in the nonbinding MOU is to enter into a process with them where they would buy 40% of our operations. And we give -- I mean, it was actually -- there was a range of values and it was an indicative range in the subject to them doing due diligence. Now in that time, certain things have happened. The markets change, valuations change. You've seen cobalt prices move, copper prices move. They're obviously doing the due diligence on the comfort they get on our operations around having access to the land. As I said, we've got the Mutanda sulphides feasibility through the process. So that was just an indication of value. It's not -- that's not a locked-in value that we are going to sell at. And to the first question from Jason, which is the right question, update on it, it is progressing. But what happens in the second half of the year, they have to finish their due diligence and then we have to sit down and have a commercial discussion with them and agree something that makes sense for both parties. So that number that was put in the announcement is not a locked-in number. One has to look at all elements that feed into this. It's the due diligence, the market, the outlook, the multiples, as you rightly say, Myles, but there's also the strategic element of having the U.S. effectively as a shareholder of this operations with Glencore, a joint shareholder and building out that business together. So all those will come into the mix when we sit down with Orion once they finish their due diligence to work out what the real commercial terms of this transaction look like.

Okay. So we could see more than 40% of $9 billion. And maybe the other kind of surprise in the first half is the thermal coal prices they really have not responded to the energy shortage. I mean what's happening there? Do you kind of see potential for thermal coal to lift? Or should we live with a $120, $130 type price for the foreseeable?

I think we have seen them lift. They are sort of $130, $135. They were lower pre the conflict. So you're probably up, let's give or say, $15 or $20 back since the conflict. So yes, what's very different this time around to what we saw in 2022. So your question is a good question. And I did mention earlier with -- to Jason's point, we saw coal at $400 back in '22. In '22, Europe was the driver of additional coal demand, where Europe used to import sort of 30 million tonnes of coal. In '22, they imported 82 million tonnes of coal, and that drove the coal demand because they didn't have the gas online that they could bring in U.S. LNG and regasify for use to replace Nord Stream. In this instance, it hasn't been a European story. This has been a story about Asia and their ability to attract LNG. They have been paying higher prices for energy, but they have also been buying additional coal to be able to run their utilities using coal. So there is a -- we have seen an uptick in some demand, and that's why you would expect prices to increase like they have, but it's not to the same extent that we saw in 2022, where effectively, if Europe didn't buy coal at any price, the lights are going off. So that's why I think you haven't seen such a massive rise in coal prices, but you have seen a rise in coal prices. What I think we have seen, and this is very interesting for the long term because everybody is -- of course, we're all fixated on the short term and if the coal price is down $5 or $10 and then the share price goes down or if it's up $5 or $10, the share price goes up, we know that. But what we have seen is there's a clear recognition from both countries and utilities around the world that energy reliability and the ability to continue to provide energy through crisis is critical. And 2 energy crises in 4 years has really sharpened their minds and they're resolved. There's a view and it's becoming a much stronger view that putting all your eggs in one basket, as Europe did in 2022 with Russian gas, that putting all your eggs in one basket is a folly. It's not something one should do. So we are seeing that many generators are looking to extend the life of their coal fleet, keep them running. It may be very nice to burn LNG, whether from a cost perspective or a climate perspective, but they want to keep their coal fleet going in the event that they don't know where the energy crisis is -- the next energy crisis comes from. So longer term for energy coal, there seems to be a step-up in base demand, which would obviously play into a higher long-term coal price.

We will now take the next question from the line of Alain Gabriel from Morgan Stanley.

A couple of them. I think the first question is for Steve on Bunge. So you still have $2 billion in surplus capital. What does it take for you to move that into a different bucket that fed into your pro forma net debt and find its way back to shareholders? And also as an extension to that, Orion Minerals, can you give us a bit more clarity on the structure that you're thinking about for the deal? Just to figure out if that also feeds into your pro forma net debt calculation? That's the first question.

So what was the second part of that question, Alain? Which mineral -- are you talking about Orion?

Orion, yes, yes.

If we get the funds from that sale. Yes.

Yes. I mean in terms of Bunge, it's -- I mean, like everything in life, you don't -- I mean, our policy is around our sort of distributions is that it's largely going to be sort of running the bank in terms of sort of distribution and not in anticipation of -- but Bunge was the one that we had put in a separate category, if you like, as being something that clearly long term is not going to be part of our business. It's something that has a day-to-day tradable liquid benchmark that someone can look sort of towards and say sort of Glencore is paying out a percentage of that, that's more sort of validatable and more sort of transparent. So of that sort of $2 billion, I mean, all of it, ultimately, I mean, if we were to -- in, let's say, I mean, 12 months' time, we were to monetize half of that, well, then sort of 60% of that because we're only paying out 40%. So there's still 60% clearly up for grabs. But as the value or as part of that gets monetized in whatever makes sense over time in whatever fashion makes sense, well, then whatever haircut because we're taking a haircut, we're being conservative. That haircut will then sort of translate as delivered and earned. It's not there at the moment. That's why we are being conservative. But the full $2 billion is clearly up for grabs over time as that gets monetized in the most value-accretive way for us.

And then for Orion Minerals?

I mean Orion Minerals is the same, like any sort of M&A, I guess, for us, it needs to see how it ultimately gets realized. And that again goes towards sort of mechanically bringing down our debt and with the sort of $10 billion caps from our perspective, at least with Orion would still be appropriate to be able to fully consider that for distributions to shareholders. I mean the $10 billion cap, as I've said on previous calls, that cannot be locked in stone forever. There may be -- if our business significantly shrinks in size or it significantly expands in size, then that $10 billion can toggle up or down basis an assessment of sort of financial strength relative to a strong BBB credit that we have. If we were to have spun out our coal business. That was obviously something that was socialized a couple of years ago for the Glencore ex coal, it couldn't have been $10 billion. Now maybe once the copper growth comes through and we -- $1.5 billion, then maybe $15 billion is the right number. So for a minority share in Orion, that doesn't affect the $10 billion, at least in our sort of consideration. So all of that would come back. But what needs to consider around the -- either the addition or sale thereof as to what potentially changes that over time, hopefully, directionally up because we want to be a growing business, not a shrinking business.

Very clear. And the second question is probably for Gary. Gary, some of your peers are increasingly active on managing their portfolios, more aggressively looking for noncore assets to sell or monetizing infrastructure just to be a bit more capital efficient. Do you see similar opportunities across your portfolio? Or are you contemplating formalizing a program similar to what your peers are doing in that sense?

Alain, we look at these things. You will remember in sort of -- was it '21, '22, '23, we went through a quite an extensive period of sale of noncore tail assets we called at the time, things that were not fit for purpose for our business and didn't really move the needle much, whether they were short life or for various other reasons, didn't make sense. So you'll remember that, and we had that whole list of assets that we moved through. So there's not -- it's not like we have a long tail of noncore assets. There are assets that we do then ultimately do sell. And as Steve mentioned earlier, we sold the port in Colombia. We sold the Kidd mine and that we transferred with that quite a big rehab liability that goes with it. Lady Loretta, we sold, which was more of a business development asset, the life had come to an end, but by selling it to the next neighbor, they could extend their life. We have some marketing arrangements over it. There is a small transfer of some rehab obligation. So those things do happen in an ordinary course, but we don't have the sort of long list of noncore assets to sell because we went through that process 3 or 4 years ago, where we've tidied up the portfolio very nicely. With regards to infrastructure sale assets, yes, we are looking at that, and there may be some opportunities in our business. Steve is over that, and he's looking at a couple of options and ideas. Obviously, that's an issue around cost of capital, cost of funding and doesn't make sense for the business. We have spent some -- a lot of capital at places like Collahuasi on the desal plant, in EVR on the water treatment plants. So we do have the types of infrastructure that does lend itself to these kind of structures and transactions. Obviously, we want to do it not just blindly, but something that makes value sense economic sense. And if -- and there are a couple we're looking at. And if they do come up that makes sense for us, then we would execute on them.

We will now take the next question from the line of Izak Rossouw from Barclays.

Just a couple of questions. Firstly, just on the copper growth projects. You mentioned, firstly, on Collahuasi on the leaching potential to get to cathodes in Q4 this year. This seems to be a lot faster than the '28 time line. So I just wanted to get a sense of how has the scope of the project changed? What production should look like over the next few years? And then Coroccohuayco, again, it seems like the catch-up sort of opportunity and flexibility you were saying is exciting, but does that risk sort of delaying the FID decision, which I think you were still targeting for this year? And then just on the second question on the ASX listing. You mentioned sort of the opportunity for a valuation multiple. Just wanted to check would you -- as, I guess, some of your assets in Australia paying Aussie tax, would you be able to pay a portion of your dividends as franked? I mean, does that work for CDIs? And maybe just does this impact your -- some of the reverse inquiries you've had from some of the listed Aussie mining companies you've spoken to recently?

On the franking, no, we don't get a franking dividend. This is just a pure secondary listing. It's not a dual listing like that some of the other competitors have. So there's no franking on that one. Just to go back to copper growth and the leaching, yes, I mean, that leaching project is slightly ahead of schedule, and we hope to see tonnes soon. I wouldn't -- in terms of modeling the number of tonnes, it's going to be very small at this stage. There's obviously the ability to increase that with the low grade and oxide stockpiles that we have that we can feed through that. So it's not something that we would say we're accelerating massive amounts of volume. But what's pleasing is that project is proceeding ahead, and we will see some tonnes sooner than we thought. But as I say, it's not material. We need to invest some money in that plant to be able to bring it up over time to be able to actually make that a material contributor towards the volume within Collahuasi. On Antapaccay –, Coroccohuayco, Quechua, we're not looking necessarily to change timing or delay timing. It just gives us maximum optionality and flexibility. Now of course, maybe we do delay something 6 months -- if we see something is a better value proposition by going to Quechua versus going to Coroccohuayco and that delays things 6 or 12 months, well, why wouldn't we? That's not the base case. We're not planning to do that at this stage, but we do have that maximum flexibility and optionality given the size of the mineral -- or the extent of the mineralization of the region, this is not -- it's not a race to bring on the tonnes. It's a race to bring on value for shareholders. And if a delay of 6 to 12 months means you get better value to bringing on a deposit that may be a lower capital intensity or higher volume or lower operating cost, that's fine. But as we sit today, we're not looking to change the timetable. We believe that we can keep to that timetable. As I said, within that portfolio of leading projects that we have, we have a number of levers we can pull. So even if we did decide to delay one, we can accelerate others. Alumbrera by itself is already going to produce tonnes in the first half -- second half of '27 as opposed to the first half of '28. Maybe we accelerate the Mutanda sulphides. So having that multiple project levers that we can pull across the board, if one is pushed out in timing through our own choice because it delivers us maximum value through optionality and changes, well, we can always compensate for that if we want to somewhere else in the portfolio.

Next question from the line of Chris LaFemina from Jefferies.

So I just wanted to ask on the trend over the years in RMIs, which have been trending higher. I mean I get it you're gaining market share, prices are higher, EBIT has been rising. So it's all good. But we also have a changing kind of geopolitical backdrop where you have deglobalization and distorted supply chains and moving stuff around the world is becoming more difficult. So my question is whether there's anything kind of fundamentally different in marketing that requires you to sit on higher RMIs going forward than you have in the past because of effectively deglobalization. I understand, again, that gives you a better opportunity to drive higher EBIT in that business, but should we assume RMIs are going to be higher going forward on average?

Chris, it's hard to be definitive one way or another. I mean our RMI is clearly working in terms of supporting a business that has -- and I like that chart on that sort of slide where you can see recent performance and how that's structurally been moving north and maybe I've got to revisit our range again. But the -- I mean, in terms of RMI, the departments, it's not a free lunch. I mean, every minute of every day, they're paying for the stuff. And it's there to recover sort of hurdle rates within the marketing business that is covering all costs and that's generating incremental return for the business. If it didn't make sense to have that tonne of copper sitting somewhere or a tonne of aluminum or that oil and storage, it would disappear in a New York in a second. So it's all sort of working pretty well. It's all quality. It's all -- you can kick the tires on all the material. It's delivering the sort of results. So I'm all kind of happy around the sort of fundamentals. Now to what extent is that foreshadows a structural world where supply chains are going to be creaking more and the friction and days on hand and shipping routes and Section 232 has obviously been a big factor in what's happened around anticipation thereof. U.S. copper stocks are kind of where they are. We're obviously participating in that as sort of everyone else does that's sort of there for opportunity set and generating commercial outcomes. So it seems -- I mean, it's at -- I would think it's foolish levels at the moment. So hopefully -- not hopefully, careful what you wish for, but it could come down if things normalize a little bit. But that's not how things have presented over the last 3 or 4 years.

Do you still get the same credit from the rating agencies? Like I think it was 80% of the value of the RMI as a cash equivalent. Is that still the case?

Yes. Yes, the same.

We will now take the next question from the line of Ephrem Ravi from Citi.

Most of the questions have been answered. But like a couple of follow-ups. Firstly, on the non-RMI working capital increase of $1.9 billion this half was much lower than the $7.8 billion or so, I think you had in first half of '22. You did touch upon a more focus on shorter end of the curve this time. I guess the question is, obviously, it was better managed, but where the market conditions on market -- margin requirement in exchanges or counterparties in general, much lower this time around compared to 2022? And did you, as Glencore get better advantages or terms on that front from exchanges or counterparties in terms of margin requirements because you are proactive about it this time compared to '22 because it's a big delta in terms of non-RMI working capital increase.

Yes. Thanks, Ephrem, and it's well observed. I wouldn't say we were more focused on it this year. We were pretty focused on it in '22 as well. It's just that -- I mean, the main factors, frankly, back in '22 was on the -- on LNG and nat gas. So TTF at that point has gone nowhere near -- now it's obviously a bit higher during the year, but it went up 7x. The standard deviation was sort of off the charts. And there was many billions of dollars that was tied up in hedging exchanges, forward value. So I mean our entire sort of physical forward book on LNG nat gas today is maybe around $500 million. That equivalent number was sort of $5 billion to $6 billion back then just given the standard deviations and you were having to then -- you were in a hedge situation, you tied up more variation margin. The exchanges were -- there was more systemic risk. So of course, the exchanges were increasing the sort of initial margining that has come off a bit, but not where it was 2 or 3 years ago. At the same time, you had the nickel chaos back then, which is also happening at the same time where they actually stopped trading and revoked to sort of 2 days of trading. So it was a very different systemic exchange issue and concerns around overall sort of system counterpart risk, that's somewhat subdued. So there was a lot more money that was tied up just to bolster up that. We were sort of hostage to that. So you just had to pay up. It was the ticket to play. Gas was a big factor. That hasn't been as much of a factor this time around. So does gas come again and go crazy. That's the one part of our book and the overall industry's book that does tend to have longer-term positions around the management of risk and hedging, both at the producer level, the merchant level and the consumer level potentially. But we haven't seen as much impact there. But that is a risk. I mean if gas explodes in the next 6 months, we'll be sitting here in 6 months' time with an increase in working capital above in second half as well which is okay.

Sorry, another question on the coal profitability. The benchmark or the reference prices have gone up, for example, in thermal coal by about $20-odd from your first half spot illustrated. But your implied margin, a combination of higher cost and portfolio mix adjustment has gone up only by about $11. So like the drop-through of that increased price is just about 50%, which is slightly disappointing. But would you say that like if coal prices go much higher from here, that drop-through could be bigger because you are not going to get the same amount of cost hit and probably a better portfolio mix adjustment benefit?

I mean part of the portfolio adjustment, and it's not a perfect -- I mean, we have to give you and it's -- there's certain qualities, there's different time horizons, there's premiums and discounts across the market. So we try and 3, 4 times a year, give you the building blocks that you need. Now of course, if headline Newcastle price goes up, we do a lot of domestic business as well, particularly in South Africa, some of that's fixed price at very crappy prices until the $30s. That automatically inflates the portfolio adjustments because, of course, that you're not getting in sort of another dollar. So you're just having to spread your margin over a different sort of denominator, if you like. So we always got higher portfolio adjustments as that headline goes up. I think we'll be out of some of those domestic tonnes at some point. Some of the Australian domestic, you still get export parity, but not often fixed price some of it. So it's the whole mix around qualities, low-quality markets within markets. I think as Gary has mentioned, China markets, what Indonesia is doing, what -- whether sort of Japan and others are paying premiums, JPU tonnes to the extent that any of them even sort of exist these days. So the markets are almost changing sort of week by week, Ephrem, and we need to give you the tools to be able to do it because I mean, we find it difficult to model sort of even here and it's impossible to model at your end. So we need to 3 or 4 time give you the tools and either disappointment or enthusiasm for these numbers. It just reflects the market as it's evolving.

We will now take the next question from the line of Ben Davis from RBC Capital Markets.

A couple of quick questions from me. Firstly, just given that you wouldn't get franking credit benefits for the secondary listing, I just wondering the value proposition of spinning out the coal, how that stacks up against the secondary listing and whether you've had any feedback from investors on that potential coal spinout following the last set of results?

No, that's not been contemplated, Ben. We're not contemplating the coal spinout. We've had no suggestion from shareholders. Shareholders are very comfortable with our strategy, built on a world-class steam coal business, a leading steelmaking coal business, a leading marketing business and a copper portfolio and pipeline that is terrific. So there's -- shareholders are very comfortable with the portfolio. They like the portfolio. We're rewarding them through returns, and there's no view or intention to spin our coal. No one's ever said that, that's going to stay like that forever. If shareholders change their mind in 2, 3, 4, 5 years, and they want us to investigate it again, of course, that's the shareholders on this company, and we'll do that. But that is not the intention.

Ben, also in terms of the secondary listing, I guess, now compared to maybe 2, 3, 4 years ago, where if you look at some of the Whitehavens and New Hopes, their registers have also matured and have sort of changed over a little bit in the last 3 or 4 years. So in terms of the sort of both sort of investability appetite for interest in coal exposure, either even more concentrated or as part of a diversified portfolio has certainly improved and has increased over the years.

Got you. That's very helpful. Just quickly, you probably can't say much, but obviously, there's been headlines on Radiant World over the past couple of weeks. Just in terms of how can we think about materiality, -- if it was a liability, what level would require separate disclosure? Is it a couple of hundred million dollars or anything like that? And anything you can share color-wise?

Look, Ben, I mean, we're not going to go into the details. All that we can say the exposure in our books is not material. You can do your own materiality calcs basis, our earnings basis, our balance sheet basis the company that we are. And it's -- as I say, on the books, this is not a material issue -- not a material exposure for us.

We will now take the next question from the line of Richard Hatch from Berenberg.

Just a couple of questions. Firstly, congrats on marketing, but I was just curious, the EBITDA margin of Metals and Minerals at 1.8%. That was pretty low compared to history. I think the 5-year trading average is more like 2.8%. So I'm sort of curious as to why it's so materially below. I wonder if you might just be able to help us out there. And then secondly, just on ADR, we went out to site a couple of years ago, you talked a good story, but the mine seems to be underperforming. So I think H1 annualized, you're running at about 20 million tonnes. The presentation you gave us when we went to Canada was 26 million tonnes to 28.5 million tonnes. I appreciate H1 had some sort of one-off issues. But I just wonder if you can give us and the market some comfort that you are going to hit those medium-term targets of at least 26 million tonnes from the ADR assets.

Thanks, Richard. I think we'll take them in reverse order. As we mentioned or Martin mentioned earlier in the call, David is here. So he'll take that question first, and then Steve can take the EBITDA margin on trading.

Thanks. Yes, as far as EVR production goes, I think we continue to see and make improvements to the underlying performance in that business. We're still very much committed to our medium- and long-term trajectory for EVR. We're doing a lot of work to derisk that, one of which is probably the most important is delivering the FRX project. That permitting is going well. Particularly at the north end of the valley there at Fording operation, I think as we explained at the time between Fording and Greenhills, business is significantly challenged from a permit perspective. As we have some of these short-term issues around both geotech, water, seasonality and so on, it means that we don't have the working room available to kind of absorb those. We will see some short-term hiccups, but clearly, the underlying trajectory is very good. The business from an efficiency perspective continues to improve. So yes, certainly committed to performing against the presentations that we gave to you guys when we were on site. And yes, other than the short-term interruption, the fundamentals are very good and continue to improve for EVR.

In terms of the margins, actually, it's not a number that we tend to focus on because the revenue line is somewhat irrelevant also within the marketing business. But of course, in a higher price environment, you would expect that your derived margin percentage is going to shrink a bit because it's more about the absolute dollars of gross income and dollar per tonne that you're able to generate on those flows. So I'd rather have certainly a bigger increase in absolute dollars if that comes at the -- sort of just mathematically, you have a lower margin. That's just an outcome. I actually don't even know what our revenue number is for the 6 months. So it's not something that we necessarily focus on, which obviously important on the mining side, that's your EBITDA margin, that's your cash buffer, your 40%, 50% that we have. But within the marketing, I wouldn't pay too much attention to the EBITDA margin percentage. It's more around gross income, return on capital.

Okay. I mean just to perhaps push you slightly, it's just more like when you have a high energy price environment, history shows that you've outperformed on a margin standpoint. And I would imagine the same ever so slightly for a metal standpoint. But if you don't look at the margin, then fair enough. I just thought it was an interesting point to call out. And I was curious as to why it was the worst it's been in 5 years.

It's just a function of the higher prices. The actual earnings in the metals in absolute terms is amongst close to our sort of -- it's upper quartile earnings. Last year was a record. So we're off a little bit from that record around the post sort of tariff and premiums and copper opportunities, the tightness TC/RCs. It's all good conditions. It's business as usual at a strong level, I would say. But if your copper price is up 40% and your zinc price is doing what it's doing, then that doesn't always translate into -- it would be nice if it was a margin -- well, I guess you'd have the reverse is true as well. No, it's not -- it's an interesting statistic, Rob, and one I would ascribe too much weight on.

We will now take the next question from the line of Alon Olsha from Bloomberg Intelligence.

So just 2 questions. Firstly, on copper costs. At the full year results, you presented some kind of indicative guidance for 2028 and 2029 copper costs, C1 costs of $1.18 for '28 and $1.08 for '29. Just given your raised guidance this year, are you still fairly kind of confident in those numbers? Or could we see that drifting up? I appreciate the comments around a lot of the cost increase in this first half or the increase to guidance is transient in nature. But just if you could give some color on your thinking on costs into next year and further out.

Yes. Thanks, Alon. I mean we wouldn't have -- I think we need to -- let's get through to the end of the year where we have a better sense on the transitory nature of some of these costs where they've settled down once there's more clarity and resolution around some of those supply chain disruptions that we've seen, particularly these ingredients around the fuel and reagents. So that is a factor that's impacted us short term. Longer-term direction of travel denominator is very important in those generation of costs as well as byproduct credits, which has seen -- since that period of time, we've seen some of the metals sort of metallic byproducts have actually increased. So in copper business, we've got zinc, we've got various others. Precious metals, which is also we have a large exposure has actually contracted since then. So we'll need to sort of recut the -- -- it's going to be a function of sort of byproduct evolution, including cobalt, very important within our copper business. We've made some assumptions within that -- within those numbers as to what period of time we'd be able to increase sales and at what price -- that product was going to clear out in those outer years, which is sort of our own S&D and as much sort of trying to get into the heads of DRC a little bit as to how they were going to manage sort of quotas and prices sort of around floors and caps or the likes of them being able to sort of influence that market in sort of a certain way. So we'll recalibrate all those factors, which are the most material in those assumptions around sort of '28, '29.

Got it. And then just a final question on thermal coal. So I guess, notwithstanding the comments you've made around the conflict in the Middle East and the tightness in energy markets kind of reinforcing thermal coal as a fallback fuel in the energy system. It does appear that the 2 biggest buyers in the seaborne market, China and especially India seem to be slowly withdrawing from the market. So there could be a scenario where the seaborne market actually shrinks over the coming years simply because they're boosting their domestic production. But at the same time, what are you seeing on the supply side because that's not growing either. So in terms of your kind of medium-term outlook, could you see the market still remaining pretty tight because while demand for seaborne coal might be coming off a bit, supply isn't growing either. And kind of how do you see yourselves positioned in that market in terms of growing share?

It's always an interesting market and difficult market to predict, Alon. I mean, yes, Chinese domestic coal is growing, but it's been growing for the last 15 years or 20 years. They now every year is a new record 4.8 billion tonnes of coal. So -- and that domestic coal doesn't always necessarily replace the imports. You've seen how imports -- they used to have that old cap of 200 million tonnes of imports and they blew through that, and they're still well over 300 million tonnes of imports these days. So the fact that Chinese domestic growth or domestic is growing is not necessarily an indication of less imports. They are still building coal-fired power stations. There's probably just under 100 gigawatts of coal-fired power stations being built in China today. So they're still growing coal-fired power stations. And not only -- it's not only for coal-fired, we've seen increasingly -- an increasing growth in demand for coal -- for coal to fuels and coal to liquids. Nearly 0.5 billion tonnes of Chinese domestic production is used exclusively for that and not even in power generation. So a lot of the growth is, in fact, going into other forms of use of coal, and therefore, the import of steam coal is still very important for the Chinese market. India as well, yes, Coal India is growing, but they're also building coal-fired power stations and are still very energy hungry. You look at the growth of that economy and the trajectory of growth and how energy hungry they are and even now moving into the construction of data centers and the likes, they need all forms of energy that they can get. That's not only renewables and coal, but it's not only coal domestically, but coal imports. So on the import side for China and India, we're not uncomfortable. You will see seasonal variations, whether it be weather, whether it be domestic, whether it be accidents, whether it be what -- just economics will drive what makes the most sense. So we're not concerned with the demand profiles coming out of China and India. The supply side, and you raised a very good point on the supply side. There are -- in Australia, certainly no new mines being built and mines are shutting. We're shutting some of our mines as they come to the end of their economic lives or resource endowment. You've seen how we've taken tonnes off the market in places like Cerrejon and we would only bring those back on if the market actually needs those tonnes. Otherwise, we're very happy to run Cerrejon at a lower rate. Drummond run at their rate and they're not increasing any further. South Africa, mainly constrained by the rail, up and down a little bit, 5 million tonnes, 10 million tonnes, but there's not a big change in South Africa. The interesting one is Indonesia, which has been the big supplier to the export market. And you've seen all the noise around restrictions on exports there. And that's not driven -- that's driven around resource preservation for their own use. Like China, Indonesia continues to build coal-fired power station. It's a very strong economy that needs power. They're building a lot of aluminum smelters. They've got a lot of nickel smelters. They've got -- they want to build data centers. The industry -- the general industry is very strong and growing, and they need to preserve the resource to provide power domestically. So from a supply growth perspective, although Indonesia has abundant coal, it's low-quality coal, they have abundant, they are now starting to intervene in terms of how much can be exported. Now we never know whether sort of how much -- what that limit will be and sometimes the limits change and the restrictions change and the like. But there certainly is a move towards restricting some sort of export for domestic use. So that does also bode well into the supply side of the supply-demand dynamic for seaborne export coal.

We will now take our next question from the line of Patrick Mann from Investec plc.

I just wanted to ask on marketing. So on Slide 11, you said the indicative full year adjusted EBIT. If you purely mathematically take the second half as the mid to the top end of your long-term range, then you'd see $4.7 billion to $5 billion for the year, which obviously implies quite a big slowdown from the first half. And I understand the mathematics of it. My question is, have you already seen a slowdown in the opportunities and the profits available in marketing? Or if the current situation persists, is there still upside risk to that number? That's the first question, please.

Patrick, I think we're only 1 month in. July, I would say, would be an above-average month, but certainly not to the same extent that we saw the sort of February, March, April period where things were very extreme in terms of supply disruptions, dislocations and changes. So yes, July -- and that feeds into where Steve was saying. Steve is not even taking the half middle of the range, taking the top end of the range for the second half. And so that feeds into that narrative that we are looking to say, well, middle to the top end of the range, July was a good month, and it feeds into that mathematical calc.

Well, I mean, we sort of made some qualitative commentary around the fact that we expect, given geopolitics and the likes, sort of H2 sort of some above normal levels of disruption and volatility to still prevail, but nothing like what we've seen in sort of H1. And it's particularly the initial reactions to an event where you see the most opportunities as that sort of it gets -- ultimately, you find some sort of new equilibrium and trade flow. So first 2 or 3 months, very disruptive, then it settles down and then you're more dealing with the smaller sort of ripples, -- does it deescalate, escalate? These are obviously the sort of important questions. So we just sort of qualitatively without specifically putting a sort of a projection or an estimate out there, we're sort of giving some direction of travel. And of course, it could be higher or lower depending on multiple factors.

Great. That's very clear. The second question is just on the copper price. I don't know if you guys are prepared to maybe just give a view on U.S. tariff potential and risks to copper price, both on the upside and the downside from here.

Everybody is waiting for the tariffs. And I think -- I mean, you've seen the run-up about $14,000 copper. There is -- that's twofold. One, there has been strong demand out of China, but most of it is drawn by COMEX and the demand to front-run any tariffs. When do the tariffs come? We don't know. When the announcement comes? We don't know. There are some stories that may come this week, okay? That is having a disproportionate impact on spot pricing, no question. The arb has been open for some time, and that's why you've had the stock build in the U.S. Once those are announced, whatever they are, whatever those tariffs are, whether it's 0, 15, 30, whatever it may be, it's likely to have some sort of pullback in pricing because the market then will have better knowledge of what -- of the situation. The arb will close, and you'll have these high stockpiles in the U.S., which over time will be drawn down for use in the U.S. not to be exported again because the friction cost of exporting again make it very unlikely that they come out of the U.S. But the U.S. then no longer becomes a buyer once you know what it is and you've got the stock sitting in the U.S.

That is all the time we have for questions today. I would now like to turn the conference back to Gary Nagle for closing remarks.

A very strong half for us, both on the production side and the financial side. Some nice announcements this morning around the ASX, an update on our copper portfolio, which is looking very good, our leading copper portfolio, very exciting time for our business. And therefore, we've also announced an additional return to shareholders of $1.5 billion. Our confidence in our company, underpinned by the fact that $500 million of that is in the form of a buyback and $1 billion in cash. So we look forward to another very strong half in the second half of the year. And as always, we're available for our stakeholders post this call. Thanks very much.

This concludes today's conference call. Thank you for participating. You may now disconnect.