Boliden AB (publ) (BOL) Earnings Call Transcript & Summary

Ladies and gentlemen, I'd like to welcome you to this Boliden telephone conference. My name is Olof Grenmark, and I'm Head of Investor Relations. Today, we will have a presentation led by our President and CEO, Mikael Staffas, based on the slides that you can find on our Web. These slides are based on the news that we sent out this morning. After Mikael's presentation, we will have a Q&A session, where also our CEO, Håkan Gabrielsson, will participate. Mikael, welcome.

Thank you, Olof, and good morning to everybody out there. And I do hope that at least most of you actually do see the exhibits that I'm seeing in front of me, and you'll see a nice picture of the Odda valley. And behind the white text, you can also see the -- the large part of the roaster, the roaster part of the Odda smelter, which is where we're having the issues, what we're going to talk about in a few moments. So anyway, what we have come out with this morning is that to look at the Odda project. And by the way, the picture you see here, you see in the background a little bit up there, you see the new tank house more or less totally finished and commissioning has already started. Regarding the Odda expansion, there are lots of good news in this and lots of things that are derisked. The whole incoming power infrastructure is commissioned and is already in place and the new energy contract is in operation. The harbor infrastructure upgrade is commissioned and is in place. The cellhouse and the foundry are -- will commission during Q4, and they have already started commissioning as we're talking right now. This also means that since we're getting the tankhouse capacity back, it means that we will be able to get up to 200,000 tonnes again in Q1. As those of you who have been around for a while recall that we went from 200,000 tonnes down to 160,000 tonnes when we decommissioned the old cellhouse #4 earlier this year. And now we will have ample capacity on the cellhouse site to be able to go up to 200,000 tonnes again once we commission the new cellhouse #6. The challenge we have are in the roaster and acid plant, where the commissioning to date is now in late Q1 as opposed to what we have previously communicated in the end of Q4. So we have a quarter of delay here. Then we have the ramp-up starting from Q2 of '25 up to 350,000 tonnes. The reason for the delay is, of course, a multitude, but it's mainly the cost increase that we're seeing here is mainly due to time, extra time and all the kind of fixed cost that you have in the project once the time goes on, but also some added costs regarding some later surprises in terms of exactly what is needed to be able to integrate the new facilities with the old facilities. So I would say that the main reason for the increased CapEx from EUR 950 million to EUR 1,050 million is supply shortcomings, and it's leading to the extended construction time. Just on the project financials. We are reiterating a number that you've seen already that we had on the Capital Markets Day of EUR 150 million of EBITDA per year once we get this up and running. What we're adding today is that this number that we have given has been at the Boliden long-term assumptions, as you read in our annual report. And those are not changed in this calculation and nor have the actual operating parameters are the same as well. But what we are adding here now is that when we're looking at the present market terms, the discussion about the TCs are very low right now. And it's true that the TCs are low and lower than our long-term assumption, but other things are positive, the precious metal prices. And as you know, there's a pressure recovery in this. Pressure metal prices are higher than we have in our long-term assumptions, and exchange rates are also better than we have in our long-term assumptions. And when we do it with the present market in terms, we come up to around the same EUR 150 million. So the EUR 150 million number is true both for Boliden long-term planning assumption as well as short-term market terms despite the very low TCs that we see, and that's also just reiterating that TC is only 1 part of the economics of running a smelter. And why are we achieving this? Well, we have economies of scale in the operations with relatively few extra FTEs to cover the much larger volume. We have all the automation and digitization as part of this as well, both on securing that cost base, but also in making sure that we get all the right recoveries. And then we have the hydro power agreement that is also in the background that's helping us. The leach product is, of course, part of this, coming out new. These are numbers that you would have seen and you recognize from the Capital Market Days with 40,000 tonnes of new leach product per year. And we have a metal content of about 10,000 tonnes of lead, 50 tonnes of silver and 400 kilos of gold coming out of this. In the equation as well, it doesn't show up in EBITDA, but there is also a saving compared to a base case of reduced maintenance CapEx because of this. So to summarize this and to get to a bigger picture, we're also today releasing a guidance for the next year 2025 CapEx and we're also confirming the guidance that we have for 2024. So the 2024 guidance of SEK 15.5 billion is reiterated. There are some moving parts around this. Those of you who's been around and seen the numbers, you will see that -- recognize that the Odda, Aitik and Kristineberg trunk, which we now quote at SEK 7 billion, is used at SEK 6.5 billion. The new tankhouse in Rönnskär and Boliden Area, which I think we have before set at SEK 1.5 billion is now at SEK 1 billion. So that expansion project is still at SEK 8 billion for this year. On the other side, we also have a little bit of moving pieces. Mine sustaining, it says SEK 4 billion here, used to say SEK 4.5 billion. That is some delays that we have in -- especially in Aitik, where the dam product in Aitik has taken up resources, which means that we're a little bit behind in terms of them raising in terms of stripping. We're coming back to '25 here. We can also see that the replacement and staying business CapEx used to be set at SEK 3 billion, that's SEK 3.5 billion, just set up to the SEK 15.5 billion being the same as previously announced. For 2025, we are now formally giving a guidance of SEK 13.5 billion. This has not been guided before as a total number. But if you would listen to our Capital Market Day and look at the individual pieces, many of you have come up to about SEK 12.5 billion, which I think was -- for those who have that in the consensus, is a number that's been floating around. With the increase in Odda, this is now up to SEK 13.5 billion. We still have SEK 4.5 billion in expansion and strategic projects. The Odda, Aitik and Kristineberg is going down to about SEK 1 billion. That's about maybe SEK 0.5 billion Odda and then a little bit in Aitik and then a little bit in Kristineberg adding up to that SEK 1 billion. And then we have the tankhouse in Rönnskär and the Boliden Area phase project now coming in next year at SEK 3.5 billion. We have mine sustaining coming up at SEK 5.5 billion. And that's, to some extent, compensated for the fact that we have not done everything this year that we should have done that's coming into that. So you can see we did some Odda in this year, but we've done less sustaining. Next year, we will have to take back that sustaining. And then we have replacement and staying CapEx -- staying business CapEx at around the same level as to date. Adding these 2 up together, it's SEK 29 billion over 2 years. Most of you might have had SEK 28 billion in your previous numbers. I wanted just to reiterate that the SEK 1 billion overrun in Odda is, of course, not good. But putting it in total context and with the other projects that we're running, we are still very close where we have previously said we're going to be. So with that, just making 1 picture also for you guys. This is also no news, but there is a Capital Markets Day coming up. It's going to be in Odda. It's going to be in the end of March. It will hit right away when this thing is finished and we're going to be able to show all of the new facilities to you guys who want to come there. The actual conference will be in Bergen, but the site visit to Odda smelter for everybody who wants to join. Full limitation will follow. So with that, I leave it now open to questions.

[Operator Instructions] The next question comes from Adrian Gilani from ABG Sundal Collier.

I've got 2 questions here from my end. First of all, you showed us the CapEx breakdown for '25, SEK 2.5 billion being from Rönnskär and the Boliden area. Can you just remind us how much CapEx would then be left for 2026 for those 2 projects?

Well, if you take SEK 1 billion plus SEK 3.5 billion, that is SEK 4.5 billion. And I think it's been guided at SEK 7.3 billion altogether. So the reminder, close to SEK 3 billion is left. The bulk of that will be in '26, even though something might spill over to '27 as well.

Okay. Perfect. That's very clear. And then the second question from my end. On the EUR 150 million annual EBITDA increase, you mentioned that, that corresponded with today's market conditions. So just to clarify, is that assuming the current benchmark TC for zinc? Or is that assuming the TC for zinc because those are very different at the moment?

It is assuming our estimate of benchmark TCs for next year. And I'm not going to tell you what the number is.

Okay. Presumably the current benchmark, though?

Yes.

The next question comes from Richard Hatch from Berenberg.

Yes. Just on this, on the CapEx for '25. Are you able just to clarify how much in particular is going for Rönnskär and how much we should think about for 2026. I mean just for -- yes, that would be very helpful, if you could?

Yes. We haven't separated out now between the Boliden phase project and the Rönnskär tankhouse. We bunched these 2 together here. And as I said before, we have in '24 roughly EUR 1 billion. We have in '25 for those 2 together roughly SEK 3.5 billion, leaving close to SEK 3 billion for '26 and later.

Okay. So I mean my numbers, I've got about a couple of billion in for the tanks in 2025. Is that a decent rule of thumb number to have in there?

Yes, because you have about the SEK 3.5 billion. I'm not going to give you exactly. But if you're just proportionate with the phase project, SEK 2.5 billion or SEK 1.5 billion, plus SEK 1 billion or whatever, so you're roughly right.

Okay, fine. And are you -- and just on the other projects, I mean are you confident on the ability to keep those within CapEx budget? Or are you sort of concerned about the potential for creep or delay there as well? Or is this the push on this on Odda is just a project-specific situation that you're comfortable with the others?

And that's the point I was making that, yes, of course, every project is its own kind of game and match to make sure that you stick within the limits, but if you look at them as a bulk, I feel relatively comfortable about all the other projects. And Odda is the odd one out here where we've had these issues.

The next question comes from Krishan Agarwal of Citigroup.

I had 2, if I may. Do you mind giving us a split of this incremental SEK 100 million CapEx between the increase in the cost because of the fixed cost and also the equipment costs, which you mentioned that there were some surprises in terms of the additional equipment needed to connect the facility between the old and the new. And then what is the consequent impact of the higher CapEx in the project IRR you had earlier? I'll ask the second question later.

Yes. We don't have the exact split. But the larger part of the overrun comes from time cost and a smaller part comes from actual kind of, you want to say, real project cost in terms of equipment or other things. So this is really about the kind of the cost of keeping everything around for an extra quarter. That's the one. Then on -- what's the second question? The IRR. Well, the return, we are reiterating again. And just to make it very kind of -- extremely kind of simplified measure if you're looking at the returns every year and the ROCE over CapEx, if CapEx goes up with 10%, of course, the returns are kind of 10 percentage points -- 10% lower, not percentage points, 10% lower than otherwise. And then, of course, IRR is also affected by this quarter delay in this one. But I'm looking at Håkan here if you have any number on how much this makes on IRR.

We haven't disclosed the IRR number to start with, so I'm not prepared to go into an exact number now. But I think the important part is that the business case in terms of the revenues that we expect to see once the project is up and running is unchanged. A negative impact we have is from a quarter-to-date and from a higher cost. So it will mean a slightly lower IRR. But once up and running, the cash flow should be the same as expected earlier.

I understand. And then the second question probably more suitable for Håkan. In the Slide #4, you are saying the 2025 CapEx breakdown, mine sustaining SEK 5.5 billion and then stay in business CapEx SEK 2.5 billion. That gives us kind of a steady CapEx run rate of SEK 9 billion per annum from here onwards. So if you work with the SEK 9 billion in our model and then probably some inflation taking to SEK 10 billion in the long term, would you disagree with that number on a sustainable basis, SEK 10 billion?

Again, I don't want to give an amount. But you're right, we have seen a fairly stable level of replacement and other investments in the style of automation and so on. There is still a couple of years until we will see a decline in the mine sustaining CapEx in Kevitsa provided that we do not take it on an extension. But then what you should not forget is that over a life of a mine, I mean -- and I'm talking about up until, for example, 2050 or something for Aitik, there will be occasional additional cost. I mean, sometimes, there will have to be down extensions. There will be infrastructure move. That comes in chunks, and it doesn't come every year and not every second, either. So I think that has been built in, in the numbers you're referring to.

Understand. So SEK 10 billion is not necessarily a wild number in the models. Okay. And then the final question for Mikael, probably. You build the tankhouse in -- or you're just trying to build the tankhouse in the Odda and then you are doing the same activity in Rönnskär. So when you say SEK 7.3 billion for the new tankhouse, is it fair to assume that, okay, there is a lot of kind of intelligence you would have applied into the new CapEx and then there are synergies as well when you say SEK 7.3 billion for the new tankhouse?

First, just to be clear. The numbers, the new tankhouse inventory is SEK 4.8 billion. The SEK 7.3 billion is referring to the tankhouse and the phase investments in the Boliden area that was announced at the same time at SEK 2.5 billion. So -- and I would say that the SEK 7.8 billion is, of course, for a copper tankhouse as opposed to a zinc tankhouse, so they're not exactly the same. But of course, we do feel for every data goes on, we feel more comfortable about the numbers that we have for tankhouse. And I should also say, though it's not maybe 100% clear. But the tankhouse in Odda as part of the original project is quite on time and on budget. That one has been working well. And this is, as I said earlier, ready to be commissioned now.

The next question comes from Daniel Major from UBS.

There's 3 questions. Yes, the first one, you're guiding to EUR 150 million of incremental EBITDA when the project is complete. Can you give us any guide on how much you would expect to be in 2025 during the ramp-up period?

No, not more than. It's -- the ramp-up should be relatively okay, but you never really exactly know. But it may be in some way a linear effect over the year or a linear increase.

Maybe just cut that in a different way than you in volume terms what's the expectation following the delay in terms of tonnage to get a sense of that linear accrual of EBITDA?

No. What we have said now is that by the end of the year, we should be at full earning, that you could then in theory say that we're guiding for a 9-month ramp-up, which is probably too much. So it's probably going to be faster than that. But it's going to happen during '25.

Okay. All right. And then the second question, just to clarify the sensitivity of the returns on the project to the changes in CapEx. Because the CapEx is 50% higher now than when you originally approved it. I think at the time, you're looking about double-digit kind of returns. Whilst you -- I'll take the variables driving the EBITDA have changed with a lower treatment charge and higher byproducts, et cetera. It's a struggle to see how we can still be within that 10% return hurdle rate when the CapEx is 50% higher than you originally envisaged when the project was approved?

Let me just take that. Because if you take it from initially approved, lots of things have improved quite a lot. I mean the precious metal and the silver prices are much higher today, both in reality, but also in our present long-term prices than they were at the long-term prices back then. The zinc prices are much higher now, both in reality and in long-term prices than they were when we announced this one back then. So there are many improvements in the long-term assumptions that have happened, which means that without going into too much detail, but we have a similar return today as we saw when we commissioned the project. We're at least within a kind of a few percentage point because of the increases of lots of these planning parameters. We were maybe very conservative when we launched the project back in 2021 or 2020. So yes, go ahead.

No, I mean that's clear based on information you can tell us. The third question is on the 2025 CapEx guidance. There's no inclusion for the pushback 5 at Kevitsa within this. You previously spoke towards potentially moving forward this project and including it in the budget by the end of 2024. Is that still something that is possible and I guess, would be incremental to the SEK 13.5 billion? Or should we not expect anything in terms of spend there until beyond 2025 if the project goes ahead?

It's a good point that you're bringing up, and maybe I should have been clear about this in the presentation. But I think the assumption is clear that we have lots of potential projects in the pipeline and none of them are included in this one. So the Kevitsa Stage 5 is not included, Garpenberg expansion is not included, a potential Nautanen or Laver is not included, a potential Cementa project in Rönnskär is not included. So lots of things are not included. Is anything of R&D is likely to be decided upon so that they will materially affect 2025? And then the answer to that is we don't really know, but most likely not. We are unlikely to make any kind of decisions this year. We might make some decisions during next year, maybe even early next year. But it's most likely going to have limited impact on CapEx for next year even though there might be some impact. But that would be based upon those project's own profitability that you would then choose to go ahead with that.

Okay. So they're more likely probably to slide in post '26 in terms of -- '25, sorry, in terms of materiality?

In terms of materiality, cash outlay. And you're not in the Swedish kind of media base and maybe, so I can also tell you and other who don't read Swedish express, that has been quite a lot of publicity here around the fact that we are in the process of applying for a new permit in Garpenberg to increase from SEK 3.5 billion to SEK 4.5 billion. It's very early days. We have not even formally submitted the application yet, even less gotten it, even less talked about the details. But it is something that's in there. But those -- that a formal decision that is also likely further out.

The next question comes from Liam Fitzpatrick from DB.

Two or 3 questions from myself. The first one, just on this overrun. You're suggesting that it's because of delays from suppliers. So I just wanted to check if there's any kind of recourse that you may have or compensation in relation to this latest delay. That's the first question. The second one...

And then I can answer that quickly is the answer is in materiality, no, because the contracts, as they work in these kind of suppliers, is that the fact that we get delayed. And sometimes 1 supplier is delayed, and they will blame that they're delayed because another supplier was delayed before them and so on and so forth. In the end of the day, we have very little recourse on these kind of indirect day effects, which is the major part of the cost. We might be able to recover some, but it's going to be a smaller part related to their individual deliveries.

Okay. Understood. And then I think you suggested on the previous call that because of this big product was underway that was impacting kind of the current production levels further, which are around 200,000 tonnes. Should we assume that, that will extend for the next few quarters because of these delayed projects?

No. What I did say is that we do expect to be able to commission. The major issue had been, during this product time, has been the fact that we commissioned tankhouse #4 and thus had a kind of theoretical maximum of 160,000 tonnes. As we get a new tankhouse with very much overcapacity, commissioned already during Q4, we should be able in Q1 already to go up to 200,000 tonnes. So we will see less, if you call it, disturbances during the project for that last quarter until we can start ramping up for the 350,000 tonnes.

Okay. And then last 2, just on Tara. Does this have any bearing or impact on how quickly you aim to ramp up in Tara?

No, Tara is a standalone project ramping up according to its own logic.

Okay. And finally, on Kevitsa. I mean you gave us the color there in the previous response. Should we start to worry about Kevitsa kind of steady-state production levels being impacted in the years ahead because of the delay to the pushback projects?

We have been able to delay -- we have been able to find a solution to be able to postpone the decision of pushback 5 without short-term impairing the production level. Of course, we don't do a pushback 5. There is limitation. But we were talking at least 5 years out until we will start seeing limitations if we don't do a pushback 5. So no, you should not in the kind of foreseeable future see a slowing production because of potentially delayed or theoretically never happening push back 5.

The next question comes from Marina Calero from RBC Capital Markets.

I just have a follow-up question on your mine sustaining CapEx. You're guiding for SEK 5.5 billion in 2025. In your previous question, you explained that you would have to keep CapEx, sustaining CapEx levels elevated for a couple of years more. How do you see that sustaining CapEx sustainably? What kind of sustainable levels do you think you will need to run the business in the long term?

Without going into any numbers, just to have a sense of it. There is -- in this SEK 5.5 billion, there's a little bit of a catch-up because we haven't done what we needed to do in '24. But having said that, as our operation gets deeper and our dams get higher and also that we are changing dam raising technology at a couple of places, we are likely to see a, to some extent, stable/slightly growing mine sustaining CapEx over the years forward. But I will stop there because I don't have any numbers. We haven't done any detailed studies around that. So we don't have anything to say. We have only been able to get our arms around '26 at this time -- '25 at this time.

The next question comes from Ola Soedermark from Kepler Cheuvreux.

Yes. I have a follow-up on the P&L effect for a ramp-up of Odda. I don't mean the actual profits on the increased volume. I'm more interested in the potential additional costs in Q1 and Q2 for a ramp-up. Or Is it just going to be a smooth transition? Or do you have any additional cost for ramp-up that we need to take -- to look at?

Well, I mean if you look at normal cost, you should not be able have to look at anything like that, that's a relatively smooth ramping up. What you need to think about, though, which we haven't spoken about, but I think you all know about it, there will, of course, be as we start producing more, an increase in working capital related to the fact that we have a bigger -- yes, a bigger throughput will require a bigger working capital on that side. And I don't know exactly what money. It's not that much money because zinc smelter generally have a lower working capital than copper smelter, which is the one that ties most of our working capital. But you have to think a little bit about that. But otherwise, there should not really be any costs. We have operators already in place, and there should not really be any one-off costs or the kind of the small, but still having operators to be able to run the bigger thing is already netted in, in this EUR 150 million number.

Just 1 additional comment. In addition to what Mikael said, that if you go a little bit further down in the income statement, we will, of course, start to depreciate the assets once they are up and running. So there will be some...

There will be a big difference between EBITDA and EBIT because -- and we haven't come into these details. We're still working with our auditors exactly in the depreciation schedule. But of course, an investment like this will be noticed in the depreciation.

Yes, of course. But you have to give us a ballpark. Is it to assume that it's going to be a bit depreciated over 20 years or so maybe SEK 500 million in additional depreciation per year?

I think 20 years is a bit too long. I would rather plan for around 15 or slightly less than that.

The next question comes from Viktor Trollsten from Danske Bank.

You actually just answered my question on the precision period. Perhaps on sort of how you view the derisking of the Odda project. Now you mentioned that you have quite a lot of, on the other parts, apart from the roasting facility. But is it fair to say that now it's difficult to see what will go additionally wrong in this project?

I mean I would say that the derisking in terms of CapEx, I would say, is fully derisked. Then there is, of course, we haven't spoken about that. There is always a risk at commissioning, that you'll find something that needs to be done. But as I said, parts of the project is already even commissioned and already in place. And there -- and we haven't found any -- in those particular pieces, we didn't have any negative surprises during commissioning. So there's always some commissioning risk that we cannot really exclude until we have finished commissioning.

Okay. And then perhaps a difficult question to answer. But in hindsight, is there anything obvious that you would have done differently on this project? It's been quite a lot of room. overruns. Just I guess what I'm after is how much have been out of your control or on your control. It's difficult to answer, of course, but.

Yes, it's difficult to answer. And of course, we will learn a lot. I mean this is a very big project, bigger than anything we've done, and there are lots of learnings around this that you can make. But there's nothing kind of fundamentally we should have built it in a different way and so on. We don't see anything like that. It's a kind of major setup. It's been there. We should have been -- I mean, had we understood earlier these delays that we're having on the roaster side and now we, of course, 2 years back, have pushed that project much harder. But that's easy to say now when we were kind of looking at everybody having a similar end date for all the parts and we were pushing them as we thought back then kind of appropriately for the same closing time. So yes. But it's -- there will be lots of learnings, but nothing kind of fundamentally that you should have built something else.

Right. And just finally, on your sort of capital requirement, you often spoke about ROCE above 10% in your projects. And you're still saying that you reached even with higher depreciation on your long-term pricing. I just -- I guess I'm not really getting the figures right.

But if you want to make the very simple one. If you take EUR 150 million EBITDA per year, then you have to -- there will be, of course, some maintenance CapEx into this place as well. But we don't know exactly how much, but it will be relatively limited. And you divide that by 10, 50, that's more than 10%.

So you don't cut depreciation in that figure?

No. Usually, when you have a return, you look at -- I mean that's the base of IRR. You look at the cash flow that you're returning and you have to get a return on the invested capital. That's what we simplified. Then there's a timing thing. So it takes a while before you spend the cash and you start getting the positive return. So that reduces the number by a little bit. But we're still in safe, I would say, safe double-digit territory.

The next question comes from Richard Hatch from Berenberg.

Just I wondered if you could just give us a thought on the ramp-up of Odda. You've mentioned that you expect to run at about 200,000 tonnes in the first quarter. So how should we think about how 2025 looks in terms of the ramp-up, that would be helpful.

I was vague on this one before, and I was vague on purpose. And just to explain to you why I'm vague is that it is actually wrong to think about a zinc smelter as something that's kind of proportional to the amount of zinc you put through so that you have a kind of return proportional to getting up to 350,000 tonnes. And if you get 300,000 tonnes, you get x percent of this. Because there is quite a lot of mix on the concentrates. And how you're going to mix to get the best value out of this one, how we're going to use the penalty elements to a maximum of what this new place can do, how we're going to use the possibility for the leaching and get the value of the precious metals to the maximum. So apart from when you have the ramp-up, there's 1 thing about can the equipment take this much amount of things. But it's also testing all these bottlenecks against the different recipes of fee that you're putting in to make sure you can run high mercury content things and how much can you run until the mercury removal is full capacity on. And these things you will do over time. And we are quite good at these things normally, but it also can take some time because sometimes you want to have a concentrate in that you don't have, then you have to buy it. So there are also commercial aspects to this thing. And therefore why we are vague. We feel very good about this general situation, and we feel good about the fact that the concentrate markets are moving towards higher value, higher premiums for those who can extract more precious metals, which we can do lots in this new setup. And also those who can take lots of penalty elements, which we can also do in this setup. So we feel generally good about it, but we want to be a little bit vague about the ramp-up because we, of course, need to test all these things.

[Operator Instructions] The next question comes from Johannes Grunselius from DNB.

It's Johannes here. I just had a question on the EUR 100 million incremental cost or new costs caught by the delay. Maybe I missed this information earlier. But is it incremental cost? Or is it more like a shift in timing of the costs that you foresaw Q4 that now pushed into '25? And why do you carry these costs now? If you can elaborate on that, please?

Number 1 is it is incremental CapEx. We're talking about EUR 100 million incremental CapEx. Some of that incremental is happening already in '24 and some is happening in '25, but I think timing is not that important. The main carrier for the increased CapEx are things like cranes, camp, scaffolding, all these things that are quite a big fixed item that keeps on ticking for month in and month out, and that's actually a relatively large part is kind of fixed cost. And then as I said before, that's not all of it. Some of the EUR 100 million is also that we're -- we have some increases, especially piping, that has turned out to be more meters of pipe than we had in our original, preliminary engineering has turned out to be more when we had done the diesel engineering that's part of it. That is also part of what is causing the delay, but more of the delay is caused by our sub supplier not being or suppliers not being able to stick to the time table as agreed. Some of them will have some excuses that they might have been delayed in starting and therefore, their own planning got wrong and they had to send their people, their engineers on to other projects and then coming back to us and then starting later. Some others, you can say, have less excuses.

Okay. But it sounds to me that it's like a gray zone here what's CapEx and what's OpEx, but it seems you decide to go for OpEx.

No, CapEx. You were talking about the EUR 100 million extra, that's CapEx.

Maybe I got it wrong because, of course, I understand the CapEx overrun. But you also mentioned in the press release about additional EUR 100 million in increased OpEx. No?

No. Did we write that? I think that's not OpEx, that is -- and we're trying to say that this increased CapEx is mainly things. Now there a lots of people look in the press release just to make sure we haven't written anything strange.

No, because you didn't cover it in the call. It's just when I read the press release also in the Swedish version. But then it's no OpEx over -- incremental OpEx, it's just the CapEx overrun we talk about.

It's only a CapEx overrun and just we're right, the delay means an increase of the cost of the project of EUR 100 million and the capital expenditure is still estimated to, et cetera. So that phrase, that sentence refers to the CapEx increase, just to be very clear on that.

We have no OpEx increase or potential OpEx increase. That risk is netted out in the EUR 150 million.

There are no more questions at this time. So I hand the conference back to the President and CEO, Mikael Staffas, for any closing comments.

Well, thank you for listening to us this morning. It's, of course, never a pleasant thing to have to come to the market and announce an overrun like this. But I would also like to put it in context, it is 1 project out of all the projects that we're doing that we're having this. But the general setup of Boliden is still that we tend to run all our projects on CapEx and on time. And if you look in the whole thing, you can say that we're having maybe SEK 1 billion extra CapEx compared to what you would have thought when you woke up this morning over the 2 years, '24 and '25, going from SEK 28 billion to SEK 29 billion. That's the kind of what you should put in context. So thank you, and have a great day, everybody, and we look forward to seeing many of you at the Capital Markets Day, when you get to see these things in reality in action.