The Mosaic Company (MOS) Earnings Call Transcript & Summary

My name is Jason Tremblay. I lead the Mosaic Investor Relations function. And we'd just like to thank everybody for joining us in person or online today. Before we get started, I do need to read our safe harbor statement. We will be making forward-looking statements during the presentations and Q&A sessions. The statements include, but are not limited to, statements about future financial and operating results. They are based on management's beliefs and expectations as of today's date and are subject to significant risks and uncertainties. Actual results may differ materially from projected results. Factors that could cause actual results to differ materially from those in the forward-looking statements are included in our presentation published earlier today in our reports filed with the Securities and Exchange Commission. We will also be presenting certain non-GAAP financial measures. With that, we're excited to have you here with us today so that we can -- the executive team can share insights into our business, the changes in our business and our strategy. It's been about 6 years since the last time we held an in-person Analyst Day, and there have been significant shifts in that time. Our agenda is packed today with details about how we are planning to redefine growth as a company and just excited for our leadership team to share that with you today. So now I'd like to welcome Bruce Bodine to the stage, our -- Mosaic's President and Chief Executive Officer.

Well, thanks, Jason, and really welcome, everyone, to Mosaic's 2025 Analyst Day. As Jason said, it's been, what, since 2019, so yes, 6 years since we've had an in-person Analyst Day for various reasons that I think many of us understand. But it is great to have you here today and the opportunity for us to offer more insight into our 2025 strategy looking forward. So a lot of changes have happened since that last time we were together 6 years ago at Analyst Day. And one of the biggest changes is in our executive leadership team. My whole team is here today at different tables, mostly sitting up here. So please, I encourage you to interact with them today and ask questions, as I know you will. But our executive team, for me, is one that I'm particularly proud of given the diversity of backgrounds, the expertise that they bring to this business. And together during my first year as CEO, because it's just been 15 months now, we took a hard look at our business model and the path to thriving over the long term. And we asked ourselves, we asked our teams, we asked outside experts, a lot of questions around what was working well and what wasn't, more importantly, probably working so well. And how should that guide our thinking on our capital allocation strategy moving forward? So we came to some tough but important decisions to address the challenges that we were facing, not only now but in the very near term. But the good news is, is we don't see any of these challenges as insurmountable. We're confident, as hopefully, you see by -- throughout the day in our plan and path, and we're excited to pursue the many opportunities that lie ahead for us. So let's start, and this is kind of a different way of presenting the way we're thinking about our business. And there's 3 buckets on this slide, go from left to right. But on the left-hand side is commodity production. There's market access in the middle here. And on the right-hand side is ag technology. And I'm going to take a minute and just talk briefly about each of these, put a little more context around them. But we'll start with commodity production, which many of you know and understand well for Mosaic in the past, this has been a core engine and driver for us for a good many years. We have, and many know, competitive assets in Saskatchewan and potash with excess capacity. Our Esterhazy mine is one of the largest, most competitive and innovative operations anywhere in the world. And through our autonomous mining technology that we pioneered and brought to bear, we're able to operate inexpensively without needing a lot of labor and without requiring significant downtime. And then you look at the other big part of our portfolio, which is our phosphate production assets both in the United States and in Brazil, we are able to provide millions of tonnes annually to the market across the globe. And you'll hear more from my colleagues throughout the day about our extensive work to optimize our overall production assets. In the middle, our market access, it's really unrivaled and something that we've grown to appreciate more and more over time and I think is maybe something that could be underappreciated out in the investor space. And we view this today as a really unique competitive advantage. And our definition of market access is pretty broad, and it's kind of hard to have one singular definition around it. But for us, market access means that we have a leading presence in the top agriculture markets in the world, we have an expansive product distribution network, and we have earned customer trust, which is incredibly important in today's market. And it differs by geography. So as an example, in North America, the proximity of our operations to the major infrastructure for rail and ports on the Gulf of Mexico and the Mississippi River allow us to move product effectively and efficiency -- efficiently into the Midwest, where the major corn, soybean, row crops are grown. And we also have there an abundant customer warehouse space and their retailer facilities conveniently accessible to the end grower. In Brazil, our direct-to-farmer and large-scale grower distribution model, supported by online buying capabilities, makes the distribution there reliable and within our customers' control, which is very important for the customers there. But the real story here is the trust and relationships that we forge with our customers all around the globe. And we've been building these customer relationships now for over 20 years. And that's something that I don't think many commodity companies, particularly in this space, do as effectively as I believe Mosaic has. And it served us well for all of these years, and now we're preparing to ramp up the benefits to our business. And you're going to hear a lot more about that later in the presentation from Jenny Wang. And then that last bucket on the right is ag technology. And we built, in our opinion, the foundation to be a leader in this space by developing grower trust in our performance products like MicroEssentials and like Aspire. And we've been doing this for many, many years. In fact, MicroEssentials is now over 15 years in the marketplace and is a really recognized brand on performance products. And so now what we hear from growers and they're telling us that they want Mosaic to provide their ag technology solutions because they trust that the quality of the products that we bring will improve their profitability by increasing yields. So they're saying, "Hey, Mosaic, we trust you to deliver value for our farms." And that's why we are uniquely positioned to fill, in our opinion, the growing demand for biologicals as well. So customers know that our agronomic expertise and our R&D investments will guarantee that only proven products leave the laboratory and enter the marketplace. So we're demonstrating this again today by devoting the same level of rigor and scrutiny to the effectiveness of Mosaic Biosciences products. And there's another meaningful synergy here that I want to make sure we point out is that these biologic products pair and complement very well with our commodity production, making their application kind of easy and intuitive and convenient for the end growers. To us, this is a big differentiator. With our existing access that we have, our brand reputation and our distribution channels, if you think about it, we already have the customers that these biologic products can go to and the customers that need it. Over a decade ago, we would have described our business model for -- and our growth strategies probably a lot differently than what you might hear today. For example, in 2013, for those who are still covering Mosaic and maybe with us, we weren't looking to necessarily increase our Brazil customer base. But now given our strong brand, given our trusted expertise and commitment to digital tools, we've reached a level of kind of customer stickiness that primes us just for that growth. So our 3 business pillars, as you see on this slide, together create a highly connected framework. And now what we're focused on is rightsizing our investment strategy to maximize returns, capitalize on growth opportunities and divest or scrutinize now with precision. This thing is sometimes sensitive, so -- okay. On this slide, you're going to hear a lot more about the initiatives and key decisions that are driving our current strategy and Mosaic's value growth engine. And you can see that depicted on this slide. And we're going to walk through the actions that are already in motion and the value and opportunities that these actions are creating and then how we will ultimately capitalize on them. The key areas for us on this slide, starting from the left, are normalizing our production and costs. That's first and foremost a priority of us in the short term. The second is reallocating capital for higher returns. The third is leveraging our market access, as I just discussed. And then the third (sic) [ fourth ] is redefining growth, and all of these in a very constructive -- or underpinned by very constructive macro trends that we'll talk about more later as well. So we are energized to execute this strategy, and our outlook is strongly optimistic. So as I said, we're going to spend most of the morning talking and focusing on the factors within our control. But we will spend some time highlighting the megatrends in agriculture and related areas as well as some of the fertilizer supply constraints, which I know many of you in this room is probably top of mind and something you really want to hear a lot more discussion around. But at the end of the day, to put it simply, and I'll summarize for those who are going to talk more about it, we expect very constructive market conditions in the foreseeable future. So in just a few minutes, Jenny Wang and Andy Jung will talk about these in more detail and outline how they see these tailwinds impacting our business. We're then going to move on and have Karen Swager come up and talk about the short-term actions that we're taking to normalize our production and cost by improving our reliability. I know, again, that's probably -- if market backdrop and macro trends aren't top of mind, it's definitely how are you getting back to normalizing your production. So Karen's got a lot to talk about in that arena, and we're excited to have her do that. And hopefully, what you'll see is that we have a very well-defined plan to deliver better production volumes, which obviously, in turn, through that volume is going to bring down our costs. Better operating efficiency will unlock value that enables us to grow high-margin areas of the business and invest less in the areas that aren't generating those type of returns. And as part of this discussion, our new CFO, Luciano Siani Pires, will also come up and talk about the value-capture process from our digital transformation and the possibilities that this offers for us in the future. And it's important for you to understand the dependency between reallocating capital and the work we're doing to normalize production and cost. Now this interdependency enables us to address our portfolio imbalance to build a resilient business and generate strong through-cycle returns while positioning us for growth at the same time. So Luciano will again come on stage and join us near the end of today's session to explain not only our portfolio review, which is leading to the ability to reallocate capital. And I know many of you who've heard Luciano talk over the last, say, few months since he's joined Mosaic, are very intrigued, and you can tell he's very passionate about this topic. So he's going to come up and talk a lot about that, but he's also going to bring it all together and summarize our overall financial strategy. And then on the long-term value front, I think you'll find the information that we will be sharing by Jenny Wang and Floris Bielders very compelling. As I've said, one of our most significant competitive advantages is our unparalleled market access. Now Jenny and our commercial team, props to them, have made and invested significantly with regional precision in a masterfully executed approach to delivering for our customers, building trusted relationships and using our strong brand to solidify our position as an ag expert that provides innovative products. So those innovative products is, like we talked about a few slides ago in those 3 kind of buckets of our business, were ag technology set. So we're going to leverage our market access going forward to redefine what growth looks like at Mosaic. And growth doesn't necessarily mean growing our footprint or growing more assets. It means generating earnings in cash by growing in new markets with new products and new sources by maximizing on the access we've earned and by building on the complementary nature of our overall product portfolio. That's why we see tremendous value potential in getting this right and in boosting our own value, our own cash flow and our own stock price rather than exploring inorganic activity. So many of you in the room will definitely appreciate this and online. The best resource extraction companies create competitive advantage when they are well positioned on all dimensions. But everything begins with access to good ore reserves and resources, a balanced portfolio and a low-cost position to safely and responsibly deliver products to customers. And over the last 20 years, we believe Mosaic has done a better job than most of our competitors of adapting quickly to operational technology and specifically using product technology to create a science-backed, trusted and differentiated product portfolio, which has helped us offset profit issues during years of volatile commodity supply, demand and pricing. The business we've built has supported our ability to grow free cash flow per share, considering all of the factors that are facing us, and so does our go-forward strategy. So to reiterate, again, on this slide, which is where we started on this Mosaic value-creation engine, we're focused on, first and foremost, in the short term, normalizing our production and costs; second is reallocating capital to maximize returns, higher returns; third is leveraging our market access; and then last is redefining growth, again, all in a compelling macro business environment. So we believe our strategy will have an outsized and significant impact on Mosaic's financial position through the highs and lows of the cycle, and we're excited about the years ahead. So here is the lineup for today, kind of our agenda. We're going to give you time to ask plenty of questions. Rest assured, we have 2 built-in Q&A sessions, 1 built-in break, and then 1 kind of wrap-up Q&A for the entire group at the end of all the presentations. But I encourage you -- in these built-in Q&A sessions, they're going to be built after certain subject matter, the panelists, if you can direct your questions to kind of the topics that were covered. And then at the end, if there's other more macro or bigger questions that you have, we can address the whole team. So again, really want to thank you for joining us in our 2025 Analyst Day here in New York. Exciting for me to see each and every one of you to be here. And I'd like next to introduce Jenny Wang, our Executive Vice President of Commercial; and Andy Jung, our VP of Market and Strategic Analysis, to come on stage and they're going to talk about the constructive macro tailwinds. Thank you.

Thank you, Bruce. Good morning. Thank you for joining us today, either in person or online. Over the next 20 minutes, Andy and I will be talking about some of the macro trends. They are very constructive and provides a very favorable backdrop for Mosaic. There are a number of very important factors that are driving the growth of the demand to phosphate and potash. And Mosaic is very well positioned give -- in this very constructive backdrop. Population growth and also the concerns on food security has always been there even they are not really in the headlines, along with the growth of biofuel. That is driving demand to the global grain and oilseeds growth. And the arable land per capital continue to decline, which require the farmers to grow more oilseeds and -- grain and oilseeds on the same land, meaning they need to have a higher yield. And that, in turn, translates to the demand to higher demand to phosphate and potash fertilizer. I also want to call out not only fertilizer growth that is supported by grain and oilseeds demand growth, but also, there are competing demand for some of the nutrients which is not for agriculture use, namely phosphate. Over the last couple of years, we are seeing a significant shift of phosphate molecule being -- moving away from fertilizers to industrial use. We will talk about that. All this have set the stage for a very constructive phosphate market. It is going to be tighter for longer. In potash, the market is much more constructive than many of us or many of you have probably projected. We'll get into that as well. With that, I want to invite Andy to get into some of the discussions that I mentioned earlier, especially on the demand side. Over to you.

Thanks, Jenny. So I'm going to dig mostly into the demand side of the ledger, what really drives demand for the products that Mosaic produces. And first and foremost is very simple, it's population. So population worldwide, the growth is slowing and has been slowing for a number of decades, but it's still expected to add about 400 million people to the planet by the end of the decade. Those people will need to eat, they'll need to be clothed, they'll need to get around. Along with that population growth, we know that income growth, global economic growth will likely continue. There's a very linear relationship between population, income and grain and oilseed consumption. So just taking those things together, we see an 8% to 10% uplift in global grain and oilseed demand by the end of the decade. And as Jenny mentioned, at the same time, we're seeing arable land pulling lower, or arable land per capita, to the tune of about 6 percentage points by the end of this decade. And that's a long-term trend that's been happening with urbanization, land degradation and even climate change in the more recent decades. So those are highly probable to occur. What we think about in terms of yield, though, is probably the most important piece of this. And if we go back the last 25 years, so from 2000 to 2016, we saw global yields grow at a rate of about 1.7% per year. But if we fast forward from 2016 to 2024, that rate of growth in terms of global yields slowed dramatically to just 0.4% per annum. So what the world is going to have to see is that yield reverting back to at least somewhat closer to that 1.7% historical rate. Depending on what assumptions one uses in their demand forecast and feed and fuel usage forecast will depend on where you fall out with a final answer. But at least 1.2 percentage points of annual growth and yield is what needs to be achieved and that it will drive demand for fertilizer products or biological products that are in Mosaic's portfolio. So when we think about biofuels, and biofuels doesn't get as much attention these days as I think it really truly deserves. And one of the reasons is people, especially North American-centric people, like those of us in the room tend to be. This isn't a North America story any longer. It's not the RFS that transpired roughly 2 decades ago. This is going to be driven outside of North America. In fact, about 2/3 of our growth forecast is predicated in Brazil and the European Union. If you look at the chart over on the right-hand side, you can see a range of potential outcomes, and that will depend on which assumptions one utilizes. And in this chart, we've utilized the IEA forecasts, their main and their accelerated cases. And that tends to bookend what most third-party forecasts look like. The yellow line down the middle is Mosaic's baseline forecast, so roughly right in the middle of those 2 bookends that the IEA provides for us. So when we look around the world though, again, I mentioned Brazil, the EU are the real drivers of this story. In Brazil, they passed their Combustível do Futuro law last year. That stipulates that biodiesel blend rates are going to rise to 20% by the end of the decade, so from 14% today or 1 percentage point per year. At the same time, ethanol blend rate stands at 22%. That is set to rise to 25%, and they're actually looking at extending that to a 35% run rate. If you think about the EU, again, this is codified in law. They've got a 32% renewable energy program mandate, of which 14% mandate in the transportation sector. And I think one of the more important things, especially if we think about the next decade, they do have a 5% biojet blend rate mandate for 2030, and then it accelerates as we move beyond 2030. In India, this has been a really, I think, under-told story. They were at an E10 blend rate, so 10% ethanol in their gasoline. Just 2 years ago, in 2022, they made E15 last year. E20 is the expectation for this year, 2025. And they're studying extending that even further. E25 is the next target they're studying right now. And they've also got a biodiesel blend mandate of 5% by the end of the decade. Indonesia, I think the story is relatively well understood. Just a couple of years ago, in 2020, they were at a B30 or a 30% biodiesel blend rate. That's now at 35% as of last year. They're moving to a 40% mandate this year. And in 2028, the expectation is they'll be at a 50% biodiesel blend rate. And then lastly, North America, which, again, not the biggest driver, but there are still some uplift potential in North America with an E15 year-round program, which may or may not be mandated in the not terribly distant future. But there's a lot of state-level initiatives, including in sustainable aviation fuel as well as renewable diesel, that will continue to provide some of that uplift in biofuel demand worldwide. Our expectation, there's about 15 billion gallons of additional biofuel demand by the end of the decade. Now to summarize these -- the 3 main stools of ag commodity demand growth: you got the feed use, we got the fuel use as well as the food use. And what we box there is things that are really highly probable to transpire. So the feed and the food use, that's highly correlated to population and global income. So those are very, very highly probable. Biofuels, our base case, that's just existing policies that are in place today. So again, very highly probable to occur. And then layered on top of that is if there are further supportive policies somewhere in the world that will provide for more biofuel growth by the end of the decade. To sum it up, there's about 8% to 10% growth in ag commodity demand. If you think about the midpoint, 9% growth, that's the equivalent of producing everything that Brazil produces today in terms of grains and oilseeds. So the world needs by the end of this decade essentially the equivalent of another Brazil. So we've already talked about that's not coming from new land. It's going to have to come from yield. And part of the way to get that yield is to adequately feed the plants. So we showed demand here for both phosphate and potash fertilizers. We expect both of them to exceed 80 million tonnes of global demand by the end of the decade. For phosphate, we think that's probably an uplift of about 7 million tonnes. It would be higher, but there simply isn't adequate supply that we see available in the world, and Jenny is going to touch on that here momentarily. On potash, we'd expect roughly 9 million tonnes of new demand by the end of the decade. That puts demand at about 82 million tonnes, which is roughly in line with most third party as well as other producer forecasts. So we do see a very compelling demand story in order to allow the world to grow those additional grains and oilseeds that it's going to need. So I will pass back to Jenny to discuss supply.

Thank you, Andy. As Andy mentioned, supply is really limiting the demand growth, especially on phosphate. All right. Very good. So as I mentioned earlier, there has been a trend in the demand to phosphate over the last couple of years. That trend basically is the growth of some of the nonfertilizer use of industry use of phosphate and especially lithium iron phosphate as the battery that initially takes place in China. And we anticipate this is going to spread over to other geographies due to some of the geopolitical reasons. So recently, some of the analysts probably have tempered down the growth of EVs, especially in the U.S., in North America that we believe, and it is expected longer-term growth of EV and also ESS, energy stationary storage, batteries are going to continue to grow. The growth is going to be very robust. And having that in the backdrop, LFP in the battery mix, adoption is going up as well. So with this kind of a change of the EV, ESS growth and also more adoption to LFP production, that has basically driven a growth of the demand of phosphate into batteries. And remember, 1 tonnes of LFP equals to -- almost equals to 1 tonne of DAP fertilizers. So I want to draw your attention to the right-hand side of the chart. If you look at 2020, LFP production almost didn't exist. And from 2020 to 2024, there were 2.5 million tonnes of LFP produced in China only. The growth of LFP in China in 2023 and 2024 was 50% every year. This year, the first 2 months, that growth rate was 70%. We believe this trend is going to continue. My next slide on the supply side of the story is about Chinese phosphate export or availability. As many of you probably know, the Chinese export of phosphate was probably the single biggest driver which is causing the tight supply situation for phosphate over the last couple of years. We often get questions from analysts our investors on why do China -- the Chinese government is going to open the door, let the export flow? Our answer is probably not. I want to give you a very quick review on what happened in the phosphate industry in China. In 2015 to 2020, average Chinese phosphate export was over 10 million tonnes. In the meantime, there were a lot happened in -- during that period of time. There was a very clear overcapacity, oversupply. But during that period of time, there was a big government measurement taking place to -- in order to deal with the environmental issue. And over 20% of total P2O5 capacities were basically shut down. And this is a structure change that capacities are gone, not there. So as we get into 2020, like I mentioned earlier, we see the start-up of LFP production. So over the last 3, 4 years, we see Chinese export has taken a step-down from over 10 million tonnes to around 7 million to 8 million tonnes. The question now is, going forward, what's likely going to be the export? So I want to mention the current capacity in the country is already running at a very high operating rate. Even they are able to squeeze out more tonnes, they would firstly need to meet their domestic demand growth. And domestic -- Chinese domestic phosphate shipment has been growing over the last 4 years, almost 10% local consumption growth of phosphate in China. So that is taking a higher priority in term of phosphate production from China. The Chinese government has been restricting export of phosphate over the last couple of years for very simple reason: they want to make sure their own farmers in the country to have affordable and available phosphate to use. Beyond that, they want to have the industrial use to be met, and the remaining one are basically for export. Mosaic's expectation for the next 5 years, the export out of China will take another step down. We're talking about 2 million tonnes. Probably this is going to happen sooner than what we currently base in our forecast. And I know many of you are watching NDRC's news these days. And if I get question later, happy to answer. Today is really focusing on long term that we believe this is going to provide very strong support to the market. Last slide, I want to close the loop to say what is really the S&D for phosphate and potash over the next 5 years. It is a very busy slide. I try to explain you what we try to communicate. I want you to pay attention to both chart for the demand growth from 2020 to 2021. So during that period of time, the trend growth for potash was 2.5% per annum, trend growth for phosphate was 2%. So that is the trend line for the growth. That growth didn't continue in 2022, 2023 and probably in 2024. Those -- very simple reason, there wasn't supply out there. Going forward from 2025 towards 2030, we projected 2 different scenarios on the demand growth. One higher scenario is basically tracking the same trend line for 2% for phosphate, 2.5% for potash. We also took a different scenario on the demand growth, basically simply take 0.5%, half of the trend line growth at the lower end of the demand growth scenario. So that is the lower line of P&K. Okay, let's look at the future. It is very clear. Given this demand growth projection, supply is really going to be struggled to really keep up to meet the demand growth. It is particularly true in phosphate. If you look at the phosphate going forward on the supply side of the picture, we included all operating rate improvement for the producers like ourself. We included all the new projects as announced on phosphate from North Africa and Mid East. We also included all the speculative new projects for phosphate. And everything added up together, phosphate supply are not able to keep up to meet the demand even at a lower scenario. It is a very similar picture for potash, although at end of this decade, with much needed new capacities coming online, we may see the supply of potash are able to meet the demand at a lower scenario. However, for potash, over the near term, there's no new greenfield project, even for some of the projects being in the ramp-up stage. For example, Asia potash in Laos, they're ramping. The ramping process is not as going smooth as they expected and let alone, a lot of other things happening in the supply side. I would say, it is always easy to forecast potash supply in spreadsheet than reality. Just look at what happened over the last couple of months. There are announcements from Belarus, Russia, China, recently, Chile, the production reduction on potash has basically swapped out 2 million tonnes for this year's supply. That 2 million tonnes of supply is gone for this year supported very constructive market. So in long term, for potash, 9 million tonnes demand growth is much needed the new capacities to coming online to meet the demand. And in short term, this is a very constructive market. I want to end the market update on phosphate. This tight phosphate market is going to be tighter for longer, which support a very constructive price and margin. With that, I'm handing this over to Karen.

So let's talk about operations for a few minutes. Fully acknowledge we've disappointed you with our volume results over the last few years. We're on a path, we're on our way to recovering that volume. And so I'll go deeper, particularly in the phosphates side, but also talk about our potash and our Brazil operations. But to start with, in order for me to help make sure you understand the improvements that we're making, I do want to spend just a minute to outline our production process. Won't take long. Promise, I won't turn you into operators, I'll try. So we have unit operations of phosphoric acid, sulfuric acid and granulation in our plants. The sulfuric acid plants have 3 main products. The first, of course, is sulfuric acid. We need to make that in order to feed the process further down. We also produce steam. Some of that steam goes to phos acid and granulation to further enhance those processes. The rest of it goes to power generation at our plants, which not only put electricity within our plants we consume. We're able to send some of the electricity down to our mining operations and reduce our costs. The phosphoric acid plants, 3 main functions. The first is the reactor where we take the rock, digest the rock with sulfuric acid to make 2 products, believe it or not phosphoric acid and gypsum. Then we must filter that acid to remove the gypsum and then we must concentrate that asset in evaporation in order to get the asset high enough strength to make our final product. And then finally, granulation where we combine the acid with the ammonia, perhaps some of our MicroEssentials ingredients, and we make our final granular product. We're making improvements in each one of those areas. And so as we refer to them, I thought it'd be helpful for you to understand where in the process we are. So let's start here by looking back. If you think about 5 years ago, what were we doing? Where were we 5 years ago? The world was shutting down due to COVID. We had significant supply chain disruptions. We had significant employee illnesses, factory shutdown that made our repair parts -- it was difficult for us to get the specialty alloys that we need in order to repair our plants. And as a result, we had to delay turnarounds. Most of this impacted our sulfuric acid plants, but we also wound up delaying some of the phosphoric and granular plants that would go down at the same time. As a result of these delays, and you can see clearly in 2020, we did fewer turnarounds than any year. Our asset health was reduced in these plants, and it took us an effort to get those back. You see from this graph here, we accelerated our turnarounds in 2023 and 2024. And as a result, we have much improved asset health in these sulfuric acid plants. As a matter of fact, we finally, last week, put sulfur on in the last sulfuric plant that we had to do catch-up repairs on, catch-up turnarounds on. And so our sulfuric acid plant fleet is currently at capability to make 8 million tonnes. We are working through some of the challenges that we found in phosphoric acid as we pressed that accelerator and those sulfuric acid plants were back up and running. We are working towards an 85% to 90% asset health standard, and we'll walk through some of the projects that we're working on to get there. I've already talked about the sulfuric acid turnarounds. We did repair some major components in those plants. And I would argue the asset health there is very strong. Right now, actually, at this very minute, we're in a turnaround at our New Wales plant, where we're doing some pretty extensive repairs on our West Train phosphoric acid unit. And we have a bit more work to do on the East and the third train. That will be completed by July. We're also working on some of our process infrastructure within that plant, our waste transport systems, our water transport systems to even further bump up that reliability and that work will be done before the end of the third quarter. Our granulation units are operating well. We've got those turnarounds in place, and I'm sure you're all aware that we converted our #5 plant in Riverview to be able to make our MicroEssentials line, adding our capacity there. Yes, one more. A couple of other things that we're working on, on our infrastructure is our electrical infrastructure. To give you an example of this particular work in Louisiana, we had a catastrophic storm that came through last January and knocked the power out because a tornado took out power [ poles ] in that plant. We weren't able to, what's called, load shed. We're putting load shed capability in our Louisiana plant so that we are further buffered from interruptions to utility power, and we get to keep our own power going. And then finally, we're also investing in our employees. We had a lot of retirements during COVID. We lost a lot of senior operations employees and process engineers, but we've invigorated our training programs. We have simulations installed that are working towards training these employees even faster. And we've also developed some AI tools that are helping us with troubleshooting our processes so we can find the problems when they're much smaller and fix them before they become much bigger. The circles that you see here represent where we believe we are at asset health at the end of 2024 and where we'll be at the end of quarter 2 in 2025. You'll see those circles have closed up considerably, particularly with the turnaround activity that we're conducting in the first half of this year. If you look at Bartow, they have just come out of turnaround, and they are probably our strongest performing assets right now, and their reliability should be solid through the rest of this year and beyond. New Wales, we're doing the work I just talked to you about in the phosphoric circuits, that work should be done mostly by the end of quarter 2 with a little bit left to do in early quarter 3 and that circle closes up quite a bit. We get much closer to that asset health standard. Riverview, a little more open because we do have a turnaround in October this year. And by the time we get to the end of the year that circle should look a lot like Bartow's, and Louisiana, the same. We have our ammonia plant going into turnaround in October. And again, with those reliability improvements, we will be there. So our assets will solidly perform at the 2 million per tonnes quarterly rate at the end of quarter 2 in 2025, and we expect them to stay there for the long term. So to talk a little bit about how far we've come because we didn't just start this process in the latter part of 2024. You saw the accelerated turnaround schedule that we had in 2023. I want to talk to you a little bit about 2024, an unprecedented year. We had 4 hurricanes hit our operations, 3 in Florida and 1 in Louisiana, all of those disrupted our production in some way. The latest took our entire production down. Why so many tonnes? Well, it takes a while for us to reheat and get these plants back started when they do shut down. So it is quite a process, and it does involve several days of us ramping those plants back up. We had a fire at Riverview. We also had flooding at Riverview. And I mentioned the tornado that we had in Louisiana. I'm really hoping for no more 2024 as far as significant events. But all told, we lost 700,000 tonnes of production through these one-off events, unpredictable and certainly uncontrollable. If we added those 700,000 tonnes due to those events back in, you would see the progress that we've made in our asset reliability, and we would be much better off for our production rate from 2024 over 2023. You'll also see on here that on 2025, we expect to again gain some production. And by 2026, don't be misled by the slide saying 2027 estimate, we're going to get there in 2026, we will be at 8 million tonnes of production. The good news with the volume, and Bruce mentioned this as well, is as we ramp our production up, we will lower our unit costs because a lot of our costs are fixed. So by the end of 2025, I expect that conversion cost to be in the $95 to $100 a tonne range. And we will continue to work on efficiencies and refinement in our costs and hopefully take another $5 to $10 a tonne off. So let's switch to potash. You're familiar with our potash, but just to review, Esterhazy is an absolute world-class mine, great production, low cost, a lot of automation, very efficient. Our Belle Plaine site, a solution mine is -- delivers every day, and we have the ability to push the accelerator with Colonsay when the supply -- when the demand needs some more supply. We're installing some new technology in these mines. We are installing a hydrofloat circuit at our Esterhazy plant. This hydrofloat circuit will add 400,000 tonnes of capacity to our production at Esterhazy and this will be in the granular potash form, which has the higher margins. That project will be complete midyear, and we will be ramping and commissioning it in quarter 3. Once that project is implemented, we will be at a 9 million tonne per year capacity rate consistently in potash. I also want to talk about our compaction circuit that we put in Esterhazy. This project was completed last summer and was commissioned last year as well. This compaction circuit adds 500,000 tonnes of compacted product to our portfolio at Esterhazy. And there is a $20 to $30 a tonne margin above the standard product that we would make prior. Another really positive project for us. And again, the project -- the product that both Brazil and North America prefer. And last but not least, I want to talk about what we're doing with our operations in Brazil, highly related to our cost reduction initiatives that we've started. And we'll start with the fact that we are limiting, and -- if not eliminating our imported rock into our mines in Brazil or into our plants in Brazil. This is significant savings for us. We started this last year, and we are at run rate this year. We are doing mine planning optimization really across the board, but a big focus on our Patrocinio mine, where we are seeing great improvements in our cost structure due to that mine plan and great optimization. We kicked off a labor efficiency project in Brazil in 2024 and captured 10% savings there in 2024 and expect another 5% savings through the first half of this year. We've also worked on process improvements, raw material efficiencies and maintenance process improvements. We're using online analyzing tools for our equipment, again, to enhance our reliability and make sure we can identify small problems before they become big problems we have to solve. All combined, we expect to save $100 million to $120 million in costs in our Brazil operations. So in closing, we have a solid plan to deliver our historical volumes, and we are making great progress on that plan. We expect to stay on this plan and continue to drive our cost down in the future. So now I'd like to hand it over to Luciano to talk about our digital transformation.

Thank you. Let me stay here before you go to that very dense slide, just to speak a little bit. So we talk so far about normalization of production and costs, right, which is, by definition, becoming back to normal but we don't want to be just a normal company. We want to go beyond normal. And Mosaic is a heavy user of technology in that direction. But so far, many companies talk about technology, right, about digital transformation, about digital acceleration. But consider this and that was mind blowing to me when I arrived, Mosaic has just finished a $300 million investment to revamp its entire enterprise business software platform over the past 3 years. That go-live happened last year. And yes, we're going through some of the glitches, but we're going to be ready by the end of Q2 with state-of-the-art business enterprise platforms in order to employ technology to reduce our cost. And we're expecting already by the end of this year, about $70 million in run rate from technology applications. And this is going to be just the beginning because these tools, they really open up a horizon for a lot of things. So that business slide now. I'll try to explain what this is because I was trying to grasp as well by coming into Mosaic, what we have done. So on the left-hand side, we have this enterprise process and data reengineering. So if you talk to the consultants, they will tell you that any large transformation in technology requires this, right? It's basically you go, and you look at all the hundreds of databases that the company has, and you revamp all of them to make the application to be able to talk among themselves seamlessly. So that was the basis to implement 3 different tools. First, the new version of SAP S/4 HANA. I bet you that the companies that -- in your coverage and the companies that you invest on, they -- 90% of them are still in the older version of SAP. So this is the SAP, again, state-of-the-art with artificial intelligence embedded enterprise software. Then Mosaic also implemented the o9 supply chain platform. So o9 is a fast-growing tech company based out of Dallas, which is now becoming the de facto standard for supply chain management in industries where supply chain is very complex, such as Mosaic's, for example. Over 2,000 customers in Brazil, all that -- you're going to hear a lot about the complexities of our distribution network. So we've implemented that. Salesforce in order to manage all the interactions with those customers through many different channels, and the reason I put another bucket there, artificial intelligence, which is not an application per se, but it's the recognition. And again, if you talk to consultants, they will tell you, "Look, it's easy to do a proof of concept of artificial intelligence. But the difficulty is in scaling up AI applications and embedding it in your processes." But because we have all of this, and all of those tools already have AI capabilities that we believe now that we opened the floodgates to use AI very extensively in the organization. And then we have a number of very concrete value-capture opportunities. I'm not going to go into those, but just call your attention. Most of the gains come from the ability now to do real-time stuff to get real-time data and to optimize everything real time. So for example, in the supply chain, you see there, o9 supply chain, our sales and operations planning today is a monthly cycle as it used to be -- it is -- uses to be in every company and with weekly adjustments. We're going to be able to do sales and operations planning by the minute, right? So we're going to know exactly where our inventory sits in the supply chain because today, for example, the -- what is available to sell or available to promise our customers is usually underestimated. So we lose the opportunity to make some sales because we don't have real-time data. The pricing, for example, prices in the market, they change by the minute, whereas our price lists are only updated maybe on a weekly basis. So when prices go up, like you lose the opportunity to charge more from your customers. When prices go down, they back off and you lose sales. So all those things are going to be corrected. And by the way, the margin optimization exercise is going to be made real time. So we're super excited to go after that starting in the second half of this year. So now moving to the closing of the first block. This is just a summary table of all the opportunities and the EBITDA uplift that we talked about. The midpoint -- if you add the midpoint of all of these numbers, you get to the $650 million EBITDA uplift that you see on the header, right? And what is most exciting, if you look at the right-hand side, most of the time line for capture is starting in 2025 and going into 2026. So we believe there's a very interesting story here. And we would like to stop now and start a Q&A session, especially to cover then Bruce's opening remarks and all that story about the macro backdrop and the normalization of production and costs. So I'll just invite my colleagues to come here on stage, right? So we can address your questions.

And we've got -- Joan Tong has a microphone and Bruce Robinson from our IR team also has a microphone.

So I would like you to announce your name and your firm before you ask your question.

And we have about 10 minutes during this session.

Lucas Beaumont, UBS. So I just want to go back to the medium-term demand trend forecast you had on Slide 21. So you're kind of -- you're projecting out the 2% on the Phosphate side and 2.5% on the Potash side. So depending on what year we choose there as a baseline, if it's like 2018 versus 2020 and you run that through, you can kind of get a pretty different kind of outlook there. Also, just the long-term kind of fundamental underpinnings of that, population growth, those sort of things are kind of maybe slowing down a bit in the medium term. So I just wanted to understand how you're kind of squaring those couple of factors to give you confidence in that long-term demand growth trend?

Lucas, I think we got the essence. I'll definitely turn it over to Andy and Jenny to answer the details.

Yes. Sure thing. I think that the best slide to kind of think it through is using the slide that Jenny presented at the end, showing both the supply and the demand trends. And you're right that depending on what year you use as a base, your growth rate will look different. But generally speaking, we know that historically, Potash grew at 2% to 2.5%. Phosphate grew at kind of around 2%. And maybe those are slowing down a bit as you move forward. And certainly, we put that scenario out there. So we took those historical growth rates, cut them in half. I think that that's probably more aggressive than one should cut those growth rates simply because of that yield enhancement that we need to see going forward. And even some of the conversations Jenny and I have had with people on the green origination side of things. They believe that those reductions in fertilizer use or that slowdown in fertilizer use growth rates over the last, call it, 10 years is one of the large drivers or most important drivers of that big slowdown we saw in yield growth from normally 1.7% a year down to under 0.5% per year. So again, to reiterate, I think those growth rates even at that half -- cutting it in half in the forecast that Jenny showed, is probably too aggressive given what we think is very well underpinned grain and oilseed demand growth.

Okay. Next question?

Chris Parkinson from Wolfe Research. So you've been on this operational improvement journey for about 2 years now. And it seems at least to many of us that you're basically in the final stages with New Wales and Riverview and everything. Just -- can we just take a step back for a second and just say, through everything this company has faced and 4 hurricanes, I thought it was 3, but it's been a lot. What's the current assessment of saying how confident are you in the second half run rates that you put out? And probably just as important, how confident are you as once you hit those numbers that we're going to stay there for the foreseeable future?

Yes. Chris, I think let me start and then turn it over to Karen because this is right in everything she's been talking about. But definitely, there's some -- as we push the accelerator down, we got the sulfuric plants back to where we feel we needed to be with that last turnaround today, and we're on -- this quarter on that 3-year cycle. And the importance of sulfuric is, as Karen described, it has multiple purposes. And as we've talked about over several quarters, trying to thread 9 to 10 turnarounds in these last 2 years and still make production because you still have to have steam and heat to evaporate has been really quite a challenge. Now that, that is reliable, we put the pedal down, run into some little obstacles and bottlenecks that we're addressing in phosphoric acid that Karen talked about. But if you see coming out of quarter 2, our asset health is in a place that's exactly where we want to be. That's where we were prior to COVID, and that's where our history shows us that we can run it on those ratable rates. So I feel really good about that opportunity. And in addition, we're doing some enhancements and some improvements that go above and beyond what we even had in place back -- prior to COVID. So I don't want to get too optimistic on the upside. I think we're pretty happy because rock quality has had some offsets in this period of time. but to stay within that range, I feel pretty good about that. Karen, see if you've got anything to add?

The only thing that I would add to that is we've done a really extensive review and have developed asset strategies for our major assets and our major units, and they look good. I mean, we're in a scenario where we're going to be maintaining as opposed to accelerating those repairs. And also, to be on the right turnaround sequence helps us from a labor perspective and availability of parts perspective. As Bruce mentioned, those 2 years where we did that extensive repair, I mean, people would go from one turnaround to the next turn around, to the next turn around and it was quite a process. But I am highly confident that it stays there when we achieve the production rate.

Okay. Next question?

Yes, I have one, Andy and Jenny. Just to follow up on that supply and demand outlook that you have for P&K. Andy, you highlighted there was a potential for demand growth to slow. Can you comment on 3 other potential variants. One being could there be any acceleration in supply? You had modeled what you think is coming over the next 5 years. Is there any potential for an acceleration of that new supply? That's one. Another one being the last couple of years has been a significant level of under-application. Is there any need for some replenishment in the world? Maybe comment on that one. And the third one would be do you see any potential risk in phosphate demand from your product in Biosciences that could solubilize that phosphate that's already there.

Yes. Steve, I'll turn these again over to Andy and Jenny because I think they're well prepared for that. But thanks for your question.

Let me take the first one, the last one. And I would let you address the second one. On supply side of the assumption, Steve, it is highly unlikely on the Phosphate side to see the acceleration of the supply addition. As I mentioned, in our forecast, we included the operating rate improvement. So the stuff that we were just talking about, Karen was talking about, the improvement like Mosaic itself, we included in full. Second part, we included the announcement by OCP and Saudis for their new projects. We included all of them. We also included some of the speculative projects in Mid East. So we added up all the capacities. It doesn't look like there are new stuff out there. And the last thing I would say, as many of you are the experts. To have acceleration of phosphate production, it probably takes years than take months. So potash, very well projected even many have projected a significant new capacities coming online. The ramp-ups always takes time. And it's proven on what's going on in the near term, right? So to your question on the acceleration of the supply, especially on phosphate, it's highly unlikely. I would let you to go for the yield -- yes, the second one. I'll do the last one.

So Steve, one of the best things to look at is that yield growth curve, and we talked about it in one of the early slides presented. But you could see that global yield slowing down even before the last several years where we saw supply constraints really pulling back on the ability of growers around the world to fertilize. So it already looks as though there was under-application of nutrients in certain parts of the world, and we understand that even with our distribution businesses. So I think that's almost a foregone conclusion that the world had under-applied both P&K nutrients, and that has -- was one of the reasons that drove lower yield potential globally. And so going forward, it's one of the reasons we think using even that 50% percent or giving the historical demand growth rate a 50% haircut seems entirely too aggressive if the world is going to grow what we think it means.

To your third question on the phosphate use efficiency, we will talk about this in the next session. Very low percentage of phosphate applied on the crops being observed by the crop in the first year. What we do with our biological products, especially PowerCoat, currently in the market and also PSB in the pipeline are basically -- help to make the phosphate tied to the soil, more available for the crops to observe at the beginning. So basically, it is a game of improved efficiency of the utilization of phosphate in the soil. So that worked, especially over the last couple of years when the under-application occurred, some of the biologicals really helped to basically unleash some of the phosphate tied to the soil to make them available so that crops can uptake in order to realize the yield. So in short, Steve, we don't believe the biologicals are going to reduce the demand for phosphate for that factor on potash as well. It's a very different story on nitrogen.

We're going to take one more quick question. If that's okay.

Ben Isaacson from Scotiabank. So you've talked about in phosphate, you've talked about the improvement plan, you've talked about the process. If we ignore the 700,000 tonnes due to weather, can you confirm or can you talk about -- because I think this is very important for investors. There's a lot of confusion. Can you talk about whether all the issues have been controllable and whether they've been due to a lack of maintenance or are there structural issues with ore quality or grades, mine design, mine plant, skilled labor potentially turning over. I just want to really parse out what is within your control or has been and what is not?

Yes, Ben, great question. And if we're not been clear, I think you can give us an opportunity to be clear, this is great. It's highly within our control. I mean, yes, the weather stuff, putting that aside, as you said, and just assume we would have been at 7 -- a little over 7 million tonnes last year, we would have seen a lot of progress. The labor issue is even within our control. Yes, we had kind of a higher turnover than maybe -- and I think other companies around the world experienced that post COVID, put a lot of pressure on our recruiting and upskilling and training programs. But as Karen talked about, we've got a hyper focus on that and doing a lot of good things. And I think there's nothing on ore quality, nothing on mine planning and any of the technology that exists at the facilities or in the mining areas in Central Florida and Louisiana that are significant barriers to achieving that run rate. As I said, ore quality has dropped a little bit in Central Florida. We're getting more production out of our Peruvian operation, which is a little bit better, a little less silica content. So those things neutralize themselves in some ways, but there is more than enough kind of historical buffer capacity. If you even look back to, I think, '19 and '20, we were well over 8 million tonnes with the same footprint that we have today. So we just got to get truly the reliability and get it where we've proven it from sulfuric acid all the way through granulation on a consistent basis, and that's within our control. Karen, if you have anything to add?

No, the only thing I might add is that we've done a lot of work around the rock impurities and the mine plant, and I'm very comfortable that we can process the rock that we need to make the quality products that we make.

Just 2 observations, Karen, you mentioned the fire, just to make clear that fire wasn't created by any electrical problems on the line. It was also under control, right?

Yes -- it was not electrical...

It was a brushfire.

It was a brushfire. Yes, exactly.

Waste area.

And just a testimony, so I come from other companies in the mining industry and backlogs take lots of years to recover because once you are behind in your maintenance schedules, like things start to break and it actually prevents you from doing the work that is necessary to recover the backlog. So it is not uncommon that when things go sour, that you take 3, 4 eventually 5 years to recover backlogs. That's what's happening here.

And I think to Luciano's point, I mean, you saw in that graph, it was 2023 turnarounds that we only got to execute. That year was scheduled for a heavy turnaround, 6, 7 turnarounds. So now all of that disrupted and then how do you then thread back in without taking even a higher production hit. And that was the dilemma. And I mean that was the kind of losing sleep at night type moments for many of us is how do you do what you know you have to do and still be able to deliver some type of product to the market. And yes, unfortunately, hurricane activity was high last year. What do you do about that? But we're just pressing through and continue to stay committed to the things that are like you said, Ben within our control, and that's what we're doing and feel pretty good about where we'll be at the end of Q2.

Okay. Thanks, everybody. We're going to take about a 10-minute break now. And if we can get you back in about that amount of time, we'll start back up with our next session. Thank you. [Break]

Welcome back to the second part of our session today. After that great overview of the markets and kind of our operations and where those are at, we're now going to switch over and move over into kind of what is driving our future growth. And so to do that, I'm going to welcome Jenny Wang to the stage, our Senior Vice President of Commercial. And once she's given her first presentation, she's also going to be joined by Floris Bielders, Vice President of Biosciences. And for the Q&A, we're going to ask Jeff Wheeler, our Vice President of Biosciences Commercial, to join as well. So with that, please welcome Jenny to the stage to get us kicked off.

All right. Let's talk about market access. I think this is probably the first time Mosaic talks about market access. As Bruce mentioned earlier, market access in the past for Mosaic was just a mean of pull-through our production, either production -- products produced in the U.S. or in Canada. And today, I'm very happy to share with you our new strategy on market access. While market access has always been one of the strategic advantages Mosaic has, but today, we are positioned to take an even greater advantage from the market access. So Bruce mentioned earlier as well, to give a definition of market access, probably 100 people have 100 different answers. For Mosaic, market access is more than the access to the ports or to the rail. We have a very unique differentiated advantage on market access. So what differentiates Mosaic from other commodity producers? Number one, we have earned and built a long-time relationship with the customers, the customers who trust us in the 4 largest ag market. U.S., Canada, we group them together as North America, Brazil, China and India. We are there. The second differentiation -- differentiate Mosaic from other commodity producers are, we have a legacy on product innovation. MicroEssentials, this is a value-adding performance product, phosphate product. We've launched this product 15 years ago. This is the single biggest brand in crop nutrition industry. It covers 75 million acres last year and the sales net revenue of MicroEssentials last year was $1.8 billion. That was the single biggest brand in the industry. Today, we are building on the market access and launching and fast-growing our bioscience product, only after 2 years in the market, we have reached 9 million acres for our bioscience product in the market. It is a super exciting opportunity for Mosaic to grow our value and grow our margins for our shareholders and also for our customers. Mosaic's market access is very tailored in different geographies. In North America, this is where our major productions are at. We have a very expensive network logistically. We have direct access and control of over 500 warehouses in the market. As many of you probably know, we produce phosphate and potash 365 days a year, while for the farmers who use phosphate and potash in specific regions, it's only 4 to 6 weeks. So how do we proactively and strategically place, position our produced tonnes in the market close to the customers and get the best network netback. That is -- it's the strength that Mosaic has. With that, we are the clear leader in North America for phosphate and potash. We've been growing performance product, including MicroEssentials, including Aspire over the last years and today, with this market access, we are going to continue to grow our bioscience product. From today, we will start to make a price [ pact ] to every single piece of the strategy that we're talking about on market access. And we see the value that can be created through our market access and with a higher margin and higher earnings. In North America, the growth of our business, it's not commodities. The growth in North America by leveraging our market access is really on performance product. We had 24% of our sales last year, sold in North America, 24% of them, they're performance product. And this performance product give us $30 to $40 per tonne premium over commodities. Going forward, we're going to continue to grow MicroEssentials. Like many of you know, MicroEssentials sales was limited by our capacity to produce. Now with the completion of our Riverview conversion capacity last year, we are in the position to further grow MicroEssentials in North America and also in Brazil. Apart from MicroEssentials and Aspire, we've been investing in R&D in researching and developing next generation of performance product, which does include biologicals on phosphate and biologicals on potash. We will talk about this in the next session. In North America, we're looking at $100 million EBITDA uplift in the next 5 years. Now shifting to Brazil. Brazil is the single biggest growth engine of agriculture in the world. We've been in that market for over 2 decades, we have developed very sticky, close long-term relationship with the customers. Those customers, including mega farmers who are end users, but also, we work with co-ops, work with the green traders and also with the distributors. We are the largest local producer for phosphate and potash in Brazil. And we also have 20 blending facilities located in the most important ag regions in Brazil. And lastly, as many of you probably heard from us, we are investing in a new -- brand-new blending facility in Palmeirante, which is in northern part of the country and that is the fastest-growing region in Brazil. So the Palmeirante project is going to be up and running in the second half of the year. So apart from this, blending facilities give us the advantage of serving local markets. We do have ownership or long-term agreement with the port in Santos. So this ownership and long-term agreement give us the opportunity to avoid to pay a huge demurrage bill, which many have to pay. We don't have to pay it. We are located -- our blending facilities located in the market give us a huge freight saving opportunity to serve the local market. Now I want to acknowledge, last couple of years has been tough in Brazil. You have seen many ports on the business losses, asset write-offs, credit issues. And some of the companies went bankruptcy. Mosaic has really outperformed in the industry. I don't need to tell you more, just look at our financial performance from our Fertilizantes segment. So what made Mosaic different than others? Our customer relationship, very long-time sticky customer relation and they trust us. The second part is our footprint, as I mentioned earlier. Third, we have a very structured, disciplined risk management practice. We manage risk not only on the credit but also commodity positions. Lastly, I would say we have the best-in-class local team that really made Mosaic different in Brazil. Going forward, probably there's no disagreement that Brazil is going to grow. In terms of the fertilizer shipment growth, the trend line is about 3% year-over-year. And if anyone has suspicion, think about last year, last year was a year full of dramas, a lot of issues. And the market reached repeated the record shipment in 2024, which achieved in 2021. So it is a very strong market. Mosaic's unique business model, the platform that we've built over 2 decades in Brazil will give us the opportunity to outperform this market growth. We're looking at 11% of the annual growth rate over the next 5 years. This growth -- where the growth is from in Brazil? You may see our ambition of growing market share from 16% to 24% by end of the decade. The growth are coming from new territory, new regions, northern part of the country, new customers, new crops. It is also from the existing customers that we grow our wallet share and how we grow the business in Brazil, it is including the distribution growth but also including performance product growth. With all the growth that we projected, we're looking at $100 million to $150 million EBITDA uplift by end of the decade. Now let's move over to China and India. We rarely talk about these 2 markets, our 2 distribution business in the past. And China and India has 1/3 of the global population. They all need to eat, and we are there, and we are there to meet our mission and also deliver for our shareholders. And India was and is still the outlet for phosphate produced in the past in North America and also produced in Saudi with our joint venture partner. India is a growth market for potash as well. China, on the other hand, is a massive, very diversified potash market. It is growing. And for people outside of China always think, "Oh, it's a new contract. So what?" Potash sold in China are into very different end-user segment. Mosaic is there to capture the downstream value by selling potash into different end users, which including our white potash produced in [indiscernible] we sell into very diversified industrial use market, even crystal granular potash produced in Esterhazy, Mosaic China sell this potash in China as a premium product because of the water solubility. So the growth in China is not only the volume, but also value. Lastly, I want to say our growth in China and India are very targeted, very selective. We're not growing everywhere. We're not go for everything. We really target the growth of performance product potash and very important, the market access, the product that we're selling in these 2 countries provide a real estate for our biological product. We will talk about this in the next session as well. So overall, in these 2 distribution businesses, we expect to deliver $60 million to $80 million EBITDA uplift by end of the decade. So to get everything together, sum this up, we see market access is source of value, a source of earnings going forward. And combining the business that we have in the 4 market today, we are expecting to deliver $300 million EBITDA uplift by end of the decade, and we expect market access to become to be a major growth engine for Mosaic going forward. With that, I'm moving over to the next session, which is redefine growth. I want to invite Floris to the stage. So this is probably the very first time we are talking about Mosaic Biosciences with our investors. Please. I want to show a small video. [Presentation]

So this short video in nutshell explains why it makes sense for Mosaic to be in bioscience. Now over the next 20 minutes between me and Floris, we will be talking about bioscience. We will be covering why this is the market attractive to Mosaic? Why Mosaic? What we've been doing over the last 2 years and what we are focusing on now, what are the brands in the market and what are the new products in the pipeline, and we will conclude a long-term vision. With that, I will start from the first slide, Floris, please come on in. The very first slide is a busy slide. I was coached to talk about -- on the slide. So I will try to answer 2 questions. Number 1 question, why this is an attractive market? The second question is: Why Mosaic? So let me try to articulate the first question. Why is this attractive? It is a fast-growing market segment. It was estimated like $10 billion in 2023, and it is forecasted to grow over $25 billion to $30 billion by end of the decade. That including bio control as well. And there is a significant upside to grow in this market segment. Over 80% of the farmers today, they have not used biologicals. And also, biologicals really help to address the major issues the farmers who have. You heard from Andy and I earlier, talking about the need to improve yield. So in order to improve yield, crop nutrition contribute to 60% of the yield. However, surprisingly low percentage of the nutrients applied on the plant or crop only get observed on the first year. Floris is going to address it later. This is a real place that biologicals can really help growers to solve the problem. Also, from Mosaic's point of view, in comparison with commodities, the margin for biological products are stable and relatively high. We're talking about 30% to 60% of the gross margin and requires much lower CapEx in comparison with commodity products. Lastly, why it is attractive? Because it is a fragmented market. There's no clear market leader. So Mosaic is very well positioned to take this leadership. So why we believe we can win, we can succeed in this market? Number one, our knowledge, our expertise in the fertilizer industry give us a very unique opportunity to redefine crop nutrition, which is not only NPK, it is beyond fertilizers. It is adding biologicals to improve use efficiencies so that the farmers can improve yield, and their profitability can be uplifted. Why Mosaic -- also, we talked about market access. We have the market access in the major ag market. And in fact, before we got into biosciences space, we were approached by some of the companies who have good technologies, good products but they don't have a clear path to the market. We were asked whether we want to be the marketeer for their technology. That gives us confidence as well. We do have the legacy and product innovation. We have the track record. As I mentioned earlier, we are -- we have the single biggest brand in crop nutrition industry for value-adding products, MicroEssentials. Lastly, I want to say Mosaic has do -- Mosaic, we do have waste streams from our production in phosphate. The waste streams, including wastewater, including gypsum, including some of the low-quality rock, biologicals give us a huge opportunity to take into this waste stream to turn the waste to potentially monitor value-adding products. So with that, I'm going to hand this over to Floris.

Thank you, Jenny. Good morning. Thank you for giving me the opportunity to talk about bioscience. Absolutely my favorite topic. Jenny talked about what and why, I'm going to talk a little about how we're doing it. So the last 2 years, we've been quietly working on building the foundation for the future growth of our platform. We were already active in North America. We have launched in Brazil, in India and China. We have added resources on the sales side, on R&D, on product registration. But equally important, we have harnessed the benefit of the teams that we already have in the ground on the fertilizer side. Let me give you an example. In Brazil, we have over 200 people in the field, sales managers, agronomists that know the customer, that are trusted by the customer. We have done extensive training. So now these 200 people are employed as well, deployed as well in bringing our Biosciences product to market. If you look at some of the numbers, we reached in 2024, 9 million acres on a global basis. We expect to very significantly grow that number this year. But to put it in perspective, I think one of the speakers said it before, MicroEssentials alone, we're covering 75 million acres globally. And that is exactly the kind of customer base that will also buy these biological products, advanced customer base that will try new technologies because they know it is the future. We put a lot of emphasis on research and development. Bioscience needs new products, new technologies. And we're doing this both internally, we have a strong team with greenhouses, with labs, particularly in the U.S., but we're also having cooperation with external research companies to come up with new products. We've also focused on the customer experience platform that we set up. And I'd like to give you 3 examples of this. First of all, is Frontier Fields. So if there's one thing we have learned, if you want to explain farmers why your product is so good, there's no better way than to have a farmer explain it. You saw the short video at the beginning. We do this on a monthly basis. We have 4 farms in the Midwest that try our product. And that once a month, they make a podcast, totally unscripted, to share how it has worked. We've had in the first year, 1.5 million hits, all farmers that are interested and that are hopefully also going to try the product. We're going to expand this to more regions and overseas. The second example is TruResponse. So one of the challenges with bioscience that in the past, there have been products in the market that were sold with a good story, but that frankly didn't work all that well. You sometimes hear farmers say, "Well, it's just snake oil." And part of our duty, our task is to explain and educate and to make it clear that the products we have, Bruce mentioned it, very extensively tested. We do not go to the market until we're absolutely sure that they work. And we're using this TruResponse platform, where all the trials that we make and that customers make and that they share, all those results are online, on maps and publicly available. So if you're a farmer somewhere in Illinois, you can click on that area, and you can see how the product works. We include all the good results. Once in a while a product doesn't work on a particular type of soil, we put that in there as well, total transparency to build trust. And the final example of this customer experience platform is Ag College online. Ag College online is really an educational tool where our customers can go online, learn about the products and learn about bioscience in general. Now all of these investments in resources will take a little bit of time for us to dilute them enough so that we can become profitable, but we are very confident that, that moment will come in Q4 of this year. And then the growth path, as you will see on a later slide, is going to be very significant. Now when you talk about Biosciences, bioscience encompasses a lot of different areas. I mean it is almost dangerous to just use one word. And if you look at it, this goes all the way from bio control on one hand to biotech on the other hand. Mosaic is very, very focused on 3 areas in this very wide pool, if you will, 3 swim lanes, bio crop nutrition, bio crop stimulants and bioremediation. Let me briefly touch on all of those 3. So bio crop nutrition is the biological technologies that increase the value of nutrients for the plant. So this includes things like nutrient use efficiency, phosphate and potash solubility and nitrogen fixation. It makes sure that the plant have access to the ingredients that are in the soil but are perhaps not used yet. The second area, bio crop stimulants. So these are technologies that can do 2 things. One, they can enhance the crop quality. For instance, they can improve the sugar content. And secondly, they can help to make the plant more resilient to stresses, to heat, to drought, to too much rain. That is the second category. And the third category is a different one. The first 2 is really related to products that get applied by farmers in the field, bioremediation is different. Bioremediation is the use of biological on our fertilizer byproducts that we get from our mining industry, particularly on the phosphate side. For instance, on gypsum, for instance, on pond water. There is 2 angles that we come at this. One is a cost saving issue -- angle. So as you are aware, Mosaic has significant expenses in asset retirement obligations. And one of our hopes is that longer term as these biologicals that we have improve the quality of these byproducts, of these waste products that we can, over time, reduce the burden of this ARO. So this is a cost saving. The second one is an even bigger, more interesting opportunity. This is basically to monetize these waste streams. We call it waste streams, which is really the wrong word because there is a lot of potential value that we have not unlocked. Let me give you an example. So we are having more than 1 billion tonnes of gypsum in North America. We're producing about 20 million tonnes more. And we have cost of stacking it. We have cost of maintaining these gypstacks. In Brazil, we're selling 6 million tonnes of gypsum per year, which is almost everything we produce. So one of our thoughts was why not try to see if we can do the same in North America. And so if we can further improve the quality of the gypsum, we may be able to sell it and reduce our costs and have an income stream. Other example is one of my favorites, 15% of the gypsum, of that 1 billion tonnes and of the 20 million tonnes fresh product per year is actually sulfur. And so we are, I think, the largest sulfur purchaser in the world. So if we can extract that sulfur from the gypsum, very significant value. We have been able -- in the trials we've been doing, we're working on this for quite some time. This is the first time we talk about it because we wanted to first make sure that we had something to show for. We're able to get 90% of the sulfur out of this gypsum. So potentially very significant money. Now I want to be clear, this is not ready to bring to the bank yet. We know that the technology works. We're now working on what the exact cost is, but very big potential. Now let me -- the next few slides are giving you an idea of the products we have. Some of the products we have already in the market and some of the products in the pipeline. So this first slide shows you our 2 flagship products, BioPath and PowerCoat. These are bacillus-based live microbials. They basically do the same thing, they make the plant more efficient using the nutrients that are in the soil. They have a slightly different route to the same goal. BioPath is a liquid, whereas PowerCoat is applied as a coating on fertilizer. PowerCoat is an excellent example of what Bruce mentioned, is of the synergy between our core business of fertilizer production and the biologicals that we have just started. They end up with the same customers. They get sold through the same teams, and they do a better job for the same crops. These products that you see here have a long shelf life, 18 -- 24 months in concentrate and 18 months once they're on a granular fertilizer. It's not easy to stay alive on a granular fertilizer for 18 months, that's quite exceptional. This is one of the strengths of the product. We can apply a product like PowerCoat on our MOP, our MAP and very interesting on our MicroEssentials. So now you're bringing a premium product with a very strong loyal customer base to the next level. The next type of product, this is one that's in our pipeline, I'd like to talk, is nitrogen fixation. Most of you probably have heard about nitrogen fixation. You can, to some extent, say that nitrogen fixation has become the poster child of the opportunity that bioscience brings in agriculture. The concept is very simple. Some plants like soybeans are able to get much of the nitrogen they need from the air, whereas other plants, take wheat or corn, have to get it applied. This is -- if you look at it on a global basis, give or take, farmers spend $100 billion on nitrogen products per year. So there is a huge potential there if you can replace part of that, not all but part of that with a nitrogen fixation product. As you're probably aware, we have a close cooperation with BioConsortia, one of the leading research companies in this field of nitrogen fixation. And we are at the point where we have a gene-edited product that has proven nitrogen fixation ability. It is compatible as a seed treatment, which is by far the most economical and fastest route to market, and it has low production cost and a long shelf life. And while I know there are others in the market that are trying to be in this field, the combination of these 4 attributes sets us apart in our opinion, quite well from the rest of the pack. It is not surprising that we're working very closely with a large number of seed companies that are trying this product, that are very excited about it. Some of them are in their second year. We have started negotiations with some of them about licensing these products. So this is very attractive for Mosaic. It's a good thing for the world as well, frankly, if we can make this work. Then let me talk about the last technology that we have in the pipeline. This is phosphate solubility bacteria. This is yet another example of how closely related bioscience can be with our core business of phosphate and potash. Jenny mentioned it a little bit, of the phosphate that gets applied by a farmer, only 30% gets used in the first year. And it takes -- depending on the soil, of course, it takes up to 5 years before most of it is used. Not very efficient. So the phosphate solubility bacteria that we are working with allow the plant to use more of that phosphate earlier. The question was asked, is this going to replace phosphate use? No. Very clearly, I'll reiterate what Jenny said, the plant needs the same amount of phosphate. It is simply a much more efficient way for the plant to get to the phosphate. So the idea for this is that we apply the product with our own fertilizers, sometimes on the fertilizer. We have had the first year of testing, 2% yield increase. That is just the first generation. We're now testing the second generation, and we have expectations for it to become bigger. Our launch target date is '27, '28. The only thing I don't like about this bioscience business, it takes time. You need to make sure that the product works. So we take our time. We don't try to rush it, but we have high expectations of this product. Now there is an interesting second leg to this technology. We have over 100 million tonnes of lower-grade rock in Brazil that is not economical to run through the normal process for sulfuric acid. The P205 is too low for that, and we are testing the same technology through bioleaching on this lower-quality rock. And so far, in the first trials that we have done, we got 50% of the P205 out in 24 hours. So it's very encouraging. Our goal is to get 90% out. We're pretty confident we can do that. We still need to prove what the exact cost picture of it is. So again, I don't want to make false promises that this -- we'll hit this tomorrow, but we're very confident of all the different opportunities that are going to come from this bioscience. We have a lot of irons in the fire. Not all of them will play out, but sufficient will play out that I think this is really going to change how Mosaic is successful. Back to you.

Thank you, Floris. Super exciting new product in the pipeline. And let me conclude this session to share with you the vision of bioscience for Mosaic. We reached 9 million acres last year, as I said earlier, after 2 years of product in the market. We are going to reach $70 million sales by end of this year. And we're looking at $200 million EBITDA in 2030 with significant potential upside in long term. So we've done this before. We've done this before with success of commercializing MicroEssentials with the market access, with the brand, with the technology, we can hit another home run. With that, we're going to invite Jeff Wheeler to the stage, Jeff Wheeler is our leader for bioscience, both for commercial and production. And Jeff has a long-term success career in the biosciences space. We were lucky to get him join us, and this is one of the examples how we have the talents who are the real expert in this space.

Okay. And so we have about 10 minutes for this session. Same as before, please raise your hands, mics will come to you. Just a couple of points. [Operator Instructions] Thank you.

Yes. Ben Theurer from Barclays. I just wanted to go back on the market access targets in the different regions. If you could maybe help us understand a little bit what the steps are to get to the $300 million target in between the different regions from here until 2030. How should we think about the delivery here, which regions are first and what levels to expect in the coming years?

Sure. So let me quickly summarize. So the $300 million EBITDA uplift is basically coming from the 4 regions: North America, Brazil, China and India. So in different regions, the growth drivers are slightly different. In North America, it is basically the growth of performance product. So the performance product we have today in the market, MicroEssentials and Aspire. And also, we have a million tonnes of new performance product, which is most likely biologicals plus phosphate and biologicals plus potash. That was -- we built into the North America bucket. Shift over to Brazil. Brazil is the $100 million to $150 million EBITDA uplift is coming from 2 areas. One is really the market share gain. That's basically -- we're looking at to grow market share from 16% to 24%, especially with our investment of Palmeirante coming to the market that gives us the chance to get to the new market, new customers and new crops. The second growth driver in Brazil, similarly to North America, that is the growth of performance product. So when I say performance product growth, both in North America and also in Brazil, that means the uplift of gross margin. So assuming in both cases, assuming P&K prices flat so meaning there's no inclusion of price appreciation for commodities. Lastly, in China and India, that is mainly the performance product, especially biological-plus products in these 2 markets, in China, also including potash.

Okay. Our next question, back over here.

It's Andrew Wong from RBC Capital Markets. So in Brazil, the NPK projection, I think you have is up about 8 million tonnes by 2030. And you talked about the market share gains for Fertilizantes. I think you have about 5 million, 6 million tonnes of growth. What's your confidence level that you have that much market share gain that you really win most of that Brazilian growth? Maybe just talk about what competitors might be doing as well and how Mosaic is different?

Good question. So the market growth itself, I guess it's probably not the question. The question is how confident we gain market share in Brazil. So let me put it this way. Last year, we actually constrained ourselves in grow market share. We could have grown bigger with our current capacity on blending facilities, with our current market access, with our current customer base. We chose not to grow that market share last year because of the credit issue. We decided not to pursue the sales in a channel which has higher credit risk. So that is basically the base. Going forward, we are looking at the growth, a, like I mentioned earlier, in the northern region, where we have -- if I think about last year, give you a reference, 16% of the market share, in northern part of the region, our market share was 3% to 4%. Reason was we are not there with the Palmeirante investments that we made, and we will be there. And not only we will be there, our customers are going along with us. So that gives us the confidence to really capture the growth in the northern part of the region, which is fastest in growing. The growing is not only the acreage growth, but also the northern part of the -- farmers are investing in irrigation So they're growing their crops from 1 crop to 2 crops a year. So that gives us the confidence also to grow in the same acre with the same customers but double the volume. Lastly, it's really on the performance product and biologicals plus. We are very confident. We had that work. We had that success. We were constrained on supply.

Kristen Owen from Oppenheimer. Sort of a follow-up to this last one and then addition to the pipeline that you've outlined. Follow-up on the last one is just how important Brazil is to your expectation of hitting profitability for the business in Q4 '25? And then how important -- what you just outlined in the R&D pipeline, how important these products are to achieving the $200 million EBITDA uplift?

Okay. I will take the first question. I will leave that to Floris and Jeff on the pipeline question for bioscience. For Brazil, I think if your question is really on 2025, it is very important for us. It is very important for us, not only on the confidence of whether we can deliver the growth in a new region, new crops and new customers in the north after our Palmeirante project up and running. It is also very important to -- confidence and also, it's really the proving part. I can give you an example. Palmeirante currently is scheduled to inaugurate in July. We have sold the product going to be produced from that side, 60% as of last Friday. We sold 60% of the product, which are going to be produced in that site. That gives you a bit of confidence as well.

And the second part of your question, in terms of the overall $200 million EBITDA by 2030, how important is the pipeline of the products in delivering that. So what I'd say is it's important but it's not the #1 driver to make that happen. And the reason why is we've got current products that are proven in the marketplace that we're working on expanding registrations globally in all the markets that Mosaic has a leadership position in. That's going to provide a major uplift for us in terms of our overall platform. The reason why I say the pipeline has a little less, it's important, but less is the fact that one, of the products that you saw today is not even in our projections at this point in time because we're still working through that proof of concept. Another product is, but it's in lower projected range until we receive regulatory approval, then we really start to put those numbers more in terms of what our plan and our projections look like, but we're in that process right now of achieving those regulatory approvals. So we feel pretty good about where our current plan is with our current products being a core driver of delivering those growth expectations, but really excited about some of the uplift that we have with our new pipeline of projects that we have in there and other ones that we didn't even mention this morning.

Richard Garchitorena, Wells Fargo. I just wanted to ask in terms of to deliver these growth targets, $300 million for market access; $200 million, Mosaic Biosciences, what kind of the CapEx do you need to get to those levels? And then also just taking a step back, the production levels that you gave for phosphate and potash to 2027, any incremental CapEx required to get to those levels?

Let me try to answer your question on the market access part of the CapEx requirement. The market access growth, especially on the geographical growth is really in Brazil. At this moment, after the investment in Palmeirante is completed, our current capacity, we do not need new investment in the capacity in order to deliver the targeted growth in Brazil. So meaning the requirements to CapEx will be really minimal. In North America, China and India, the growth is really the product sales growth. And back to your questions on the -- earlier on phosphate and potash, the distribution of market access growth of phosphate and potash especially in Brazil, it does not count on incremental sales from our current production base. The new sales of NPK in Brazil, most likely is from third party. If we make -- if we were to make a decision to say, to allocate phosphate in North America, for example, for a much higher netback, that's likely going to be the scenario to be played out. So long story short, we do not expect major CapEx investment in order to support the growth in market assets. On Biosciences, as I mentioned earlier, the trick on Biosciences, a, is R&D, you need to have scientifically backed products to make it work. Second part is really on sales and marketing in market and the market access. Production, CapEx requirement for production in comparison with commodities are really minimal.

Okay. And with that, that's time for this Q&A session. So thanks, Jenny, Jeff and Floris for the great session.

We're now moving on to kind of our final section of the day, and we're going to start that off with Luciano returning to the stage to talk about capital allocation and financial strategy.

Okay. So you heard about the short-term engine of growth for Mosaic coming from the normalization of production and costs. You heard about the long-term engine of growth for Mosaic coming from market access and Biosciences. The capital reallocation program, which I'll address, sits in the middle. It's an agenda that will develop over the next 12, 24, 36 months and has a great potential to bridge the story from the short-term improvements to the long term. But I'm going to talk about the capital allocation in the broader context of the Mosaic financial strategy. So I'll start by laying out this slide, which pretty much every company has a slide like this one, which outlines the philosophy and the approach towards balance sheet, capital allocation, return to shareholders. So this is Mosaic with an assessment in the column in the middle of where we are and what we need to improve. Starting by the balance sheet. So we're very happy with the investment-grade rating that we have. We do the math. We track what would be the right level of debt in order to optimize cost of capital, and then we pretty much are where we need to be. So there shouldn't be no expected changes in this arena. Obviously, we want to service debt at the trough of market cycles. Not only that, we expect to pay our minimum dividend, it was specifically designed to be paid in the trough of market cycles. And another feature that is maybe unique to fertilizer companies is the flexing of short-term debt on a seasonal basis quarter-to-quarter. Precisely, Jenny mentioned product, right? So you produce product during the entire year. So therefore, you build up those inventories as you advance them. So you need that working capital. We fund it through short-term debt. And then once the application season starts, the working capital comes down and the cash comes in. So you will see quarter-to-quarter that fluctuating. Where we're not happy is with the return on capital employed. So Mosaic is trading below its book value. So market is clearly saying that, look, overall, Mosaic is not returning the cost of capital on its capital allocated. So the goal is to reallocate away from loan returning assets. We're going to address that. But the 2 other topics: CapEx, you saw that Mosaic in '24 delivered a reduction in CapEx levels from the prior years, which we had promised. We're kind of halting that reduction for this year. We're actually investing an additional $100 million in reliability projects to ensure the 8 million tonnes run rate for phosphates. But over the long term, the expectation is for that to decline. And sustaining capital is a major portion of it. So we're targeting $850 million of sustaining in 2030. We would like to target a number which is lower than that, but this is the one we're more confident that we can achieve while maintaining the health of the assets. And necessarily, you pointed out in -- a few times, we need to improve EBITDA to cash conversion. The good news is that most of what we talked about as it is low CapEx, like the cash conversion, tends to increase over time just by the uplift in EBITDA but not only that, by the reduction in capital expenditures. The philosophy of capital allocation and shareholder returns. So when we have discretion, you should not expect meaningful opportunistic use of CapEx. So the target is to have the high return, capital-light growth between $100 million to $200 million a year, and that will depend on the pipeline of projects. Typical projects, for example, in the past that would fall in this category would be the ones we mentioned like Esterhazy compaction, hydrofloat, MicroEssentials in Riverview, the Palmeirante blending facility. So typically, each of these projects would be like $50 million, $60 million, $70 million, $100 million, developed over 2 years. So you can see the picture that there's nothing. We don't aim to bring in like hundreds of millions of dollars of CapEx in specific projects, but that's what we're targeting. No significant M&A in sight. And I already mentioned the desire to maintain a healthy minimum through-cycle dividend. That minimum dividend will evolve as the share count reduces eventually with buybacks. If we have an EBITDA uplift and we feel more confident in our ability to pay a minimum dividend in the trough of the cycle, the idea is also to grow that minimum dividend in proportion. And the only reason why we're giving here 4 stars instead of 5 is -- on the shareholder return portion is because we acknowledge that in the past, we have bought back shares at the peak of the cycle. So that was a learning and going forward, we intend to be more mindful of what is the normalized level of the cycle of our share price and weigh-in these factors when doing the trade-off between buybacks and special dividends going forward. So now I'm going to jump into the capital reallocation part -- I'm sorry, no. There's just a 30,000 feet overview on the balance sheet. This is just a few numbers for you on the right-hand side. Indebtedness metrics are well comfortably within investment-grade rating. So I think we can check this one and move to the part of capital allocation, where the interest is. So that scale, a few months ago, I made a reference to that, that 55% of our capital employed generates 95% of the cash flows and of the NPV. And here, we're giving a little more detail because it seems striking that the other 45% only generates 5%. So there's a breakdown here. But first, the part which is performing great in yellow is where we want to invest more, right? So what is in that bucket, right? We have our Tier 1 potash assets that we talked about. We have the performance products, that means when you look at one specific facility, be it Riverview or Bartow, we actually split the capital which is allocated in the production lines that produce, for example, MicroEssentials and the capital which is allocated in the other production lines, which produce, for example, commodity products. And we're putting in here on the yellow bucket, the part which is dedicated to the performance products that have a higher margin. And the assets which are associated with market access and in the future, for example, the assets associated with Biosciences, everything which has a healthy return above the cost of capital is on the left-hand side. On the right-hand side, on the top bucket, we have pretty much the target for our capital reallocation. It's mostly the commodity phosphate products. So mines or -- be it in North America or in Brazil or specific production assets that produce commodity products. And these assets, they mostly -- and some noncore assets, they're -- with some smaller noncore assets. Some of those we're going to talk about in the part of the capital reallocation. So on aggregate, you have about 33% of the total capital being allocated to those. It's about 11% is phosphate industrial assets in Brazil. There's another 18%, which is commodity phosphate assets in North America and 4% of other noncore assets. So they do generate returns. They have value, the 20% of the net present value of Mosaic comes from those assets. But it's not commensurate with the amount of capital employed. So it's not enough to justify the capital investment. And finally, you have the lower bucket corporate and other, which has 12% of the capital employed, this is approximately USD 2.5 billion. The most important part of this is the Ma'aden shares, like the $1.4 billion in shares, which are today sitting idle, not generating any returns, but likely -- like -- so it's a true candidate for reallocation. We have, for example, our cash in hand, which is sitting at the bank, and we have other assets, for example, land holdings, which are sitting idle. And the reason why they generate minus 15% of our total NPV is that the corporate overhead is allocated here, right? Like let's say, the SG&A, which is not associated with the business themselves. And obviously, as for every company, we're very much leaning into also reducing that burden of that corporate SG&A. And as I mentioned before, like the technology piece is going to be very important on that. So on the next slide, I'm going to outline our capital reallocation program as it sits today as we see it today. So please take this as a first draft and as an evolving one. As we dig more and look more into opportunities, you will see more of this being announced to you. So we're talking about $2 billion to $3 billion of reallocation opportunities, divided into 3 buckets. And really, the $2 billion to $3 billion, they come from the blue and the green markets. I'm going to single out and talk a little bit about what is meant by the 2 last lines, the black ones because they do not involve like proceeds per se. But I'll start by addressing the transaction we've already delivered and in the process of delivering because that program, although it's more structured right now, it actually started back in 2023 with the sale of Streamsong, the Ma'aden shares, the transaction closed in December. We're already holders of about 3% of the capital of Ma'aden. We have a lockup. We cannot sell the shares in 3 years. There's a schedule. But there's a path towards monetization. Yes, there are some difficulties with the liquidity of the shares that will need to be addressed but we're -- there's a path towards that reallocation. And our best example, poster child, we all like that transaction, Patos de Minas, where we signed a deal, that was a mine that was idle since 2015, if I recall. And the expectation is for closing in 2025. $125 million proceeds that will be certainly dedicated to reallocation and for the benefit of shareholders. And now here's what we're mostly working in as we speak. So Carlsbad, we've been talking about it. Good news is that we have received indications of value. And we're pretty confident that we're going to have something for you on the second quarter. So we're hopeful that we will have a transaction by then. Araxa and Patrocinio, let me detail a little more on these 2. Patrocinio is a mine that sends ore to the process plant in Araxa, which is 70 kilometers away. So the rock gets railed over 70 kilometers. And that's the reason why these 2 assets as a combination, they're not as competitive because the logistics cost of feeding the Araxa process plant with the Patrocinio ore makes it uncompetitive. This is an asset which was having negative cash flows in the past. Today, it's in positive territory, thanks to -- I don't know if you recall, but Karen mentioned in her presentation that there was a review of the mine plan, a refocus on some grades, so the mass recovery improves. So everything now. But still, even with positive cash flow, it's definitely not enough to recover the capital employed. So the first thing that came to our mind is, okay, let's put this up for sale. Is that the case? Would anyone pay for those assets more than they're worth to us? If we were talking only about phosphates, probably no. But the interesting thing is that we started receiving unsolicited approaches because the Patrocinio mine actually is a multi ore -- it's a multi-metallic type of mine. It contains not only phosphate, but it does contain niobium, very high grade, contains titanium, continuous rare earths. And with all this talk about the critical mineral strategy from several governments and in Brazil, with the success, I don't know if you know about it, that Sigma Lithium achieved, like a company that came out of nowhere and became a multibillion, at the peak of the lithium cycle was worth like USD 5 billion. Today, it's like $1.5 billion, too -- call the attention of a lot of foreign funds and investors in order to come into Brazil and to look for critical minerals. For example, there are 7 graphite companies in Brazil today, junior companies traded in the Australian Stock Exchange. There are rare earth companies that are starting production. So there are financial investors coming to us and saying, look, you have all this niobium here, and I think yesterday, the U.K. classified niobium as the most critical of all the critical minerals in the list, would you like to do something with that asset together with us? Brazil is the largest niobium producer in the world, the niobium companies that produce also approached us. So we actually decided to launch a process in 2 dimensions. The first one is, yes, the assets are for sale. If you want to make a bid, if you want to develop the niobium here, please put an offer on the table. And interestingly, you don't need to build everything from scratch. In order to extract the niobium, you just -- after you extract the phosphates, you do some adaptations on the second line. You take out the niobium. And if you want, you take the niobium concentrate, you can do the downstream in order to get to the final niobium product. So you actually are going to use the existing assets. So we started that process for an outright sale, but we also started another parallel process to ask for intentions. Do you want to invest the capital which is required by diluting Mosaic. We're not going to put the capital to take the niobium and to create that JV and that other junior company to produce the niobium. So this is very exciting. This is coming. The process is -- will be launched next week, and we're very excited, but the talks have started way before. Taquari is our small potash mine in Brazil. It's the only mine that produces potash in Brazil. It is a high-cost mine. It doesn't have adequate cash flows for the capital invested. It doesn't have the same scale of our other potash mines, doesn't have a strategic importance by its location to actually feed our market distribution platform in Brazil. But again, interestingly, because Brazilians were so scared about the potential lack of fertilizer following the onset of the Russia and Ukraine war, there are a few I would say, groups associated with the agribusiness in Brazil that again, on an unsolicited basis came to us starting to talk about doing something with that mine. So that dialogue is ongoing as well. And the excess land holdings, this is actually a large one because we have a lot of land in Florida, 350,000 acres. Not all of it is actually necessary for us to develop our business in the foreseeable future. So we're in the process of finalizing a diagnostic and see what we can come up with the market for sale and for reallocation. So in all of that, we expect that's $2 billion to $3 billion of reallocation opportunities. And now I go into the black portion, which is -- it's a little different. It's about repurposing instead of selling an asset. It's about repurposing capital, which is already employed towards a different use. The first one, which is obvious, is an upgrade on the product mix. So we do have a pipeline of potential projects to do with those commodity products, you can read this. But for example, one example is MicroEssentials in Uberaba. Eventually, the Brazilian market takes on more acceleratedly, more MicroEssentials than what we're seeing there, perhaps there is an opportunity to add local MicroEssentials production at a marginal type of opportunity capital that I mentioned. So we will be looking into all of this with all of the facilities that today produce commodity products. I have no doubt about, if you look 10, 15 years into the future, we see Mosaic more as a specialty performance products producer on the production side and as a producer of more low-in commodity providers. And finally, what do we mean by value over volume. If we come to the conclusion that the assets cannot be repurposed the commodity. If we -- maybe the stripping margins, the great backdrop that we see coming does not materialize. If we're not able to extract the cost that we expect to extract our toolkit will have all the tools to deal with the capital. And that may eventually lead to, for example, we're deciding that a specific production line, a specific train should not be continuing anymore. So that's also in our toolkit in order to assess the situation. Something to expect more if it is the case more down the road, maybe within 2 years, for example, but wanting you to be aware that we're looking with all the tools available for what's going on with the capital employed at Mosaic. Well, finally, I'm going to wrap up and just look at the financials that we talked about lots of opportunities a bit uplift here, bit uplift there. How do we add together? So that slide shows you the aggregate combination of all that you've seen through all the presentation in each of the sessions. So observations here is that naturally, the first bucket is the biggest just because that's the one we are more familiar with. The leverage market action we defined growth, these are the opportunities already identified. But because Mosaic is pivoting in that direction, I have the confidence that we -- we have the confidence that we will develop more and more opportunities in these 2 buckets going forward. But that's what we see today. We've already talked that no major investments are required to achieve these. And finally, these improvements are largely independent on fertilizer prices because market access is about buying and selling. So it's agnostic on prices, biological agnostic on prices and finally the normalization of production costs. Yes, there is a component of prices on the production increase, but there's also a big component on the cost reductions that is independent of prices. So that picture assumed flat 2024 prices if you may want to be sensitive to different prices for MOP or for stripping margins. So we give you here some guidance of how we're seeing the 5-year EBITDA for different combinations. Let's focus on the shaded diagonal here of what we call the low medium and high-end scenarios and finally see how that translates into available cash flow to shareholders on the next slide. So here we are. On the left-hand side, we're taking the same EBITDA scenarios. And now we're translating it into free cash flow according to our expectations about how cash flow conversion will evolve, how CapEx will decline and how things will behave over time for that period of 5 years. If you add the capital reallocation potential proceeds that we mentioned before, you get to the numbers on the right-hand column, which are I would say pretty sizable compared to Mosaic's current market cap. And that's what basically leads us to the conviction that there's a very compelling investment case for our shares at the current valuation. So with that, final remarks.

Thanks, Luciano. And really, I just want to say thanks to all my leadership team for sharing the insights today. Investors, those in the room and those online. Thank you for the great -- well, those in the room, thank you for the great questions and participation throughout today's session. It's really been valuable for us to spend time with each and every one of you today. We'd like to reduce the time as we kind of talked about in the opening between these analyst days going forward. I don't think it will be every year, but it may depend on what's going on in some of our growth strategies. But I would expect probably more on a 2-year cycle. But in many ways, the Mosaic story is unique. And having this dedicated time with each of you to kind of be a sounding board, get your feedback and interact with you to ensure that a, you understand, but b, that we get that feedback as well and know where you may have concerns or additional guidance for us to clarify. So now we've given you a lot of context throughout the day and to our path forward. And while there are definitely macro trends, as we've talked about, working in our favor. We'll continue to be met as always, for those who've been long in this business for me over 30 years, we'll see obstacles that come up that pose some type of risk of our business. But the meaningful actions that we're taking within our commodity production business, are enabling the capital reallocation that you just heard Luciano talk about, which in turn is fueling our ability to leverage our premium earned market access to redefine growth that was the kind of the major stories that you heard from Jenny, Floris and Jeff. So these moves make possible that financial strategy that Luciano just overviewed at the highest level, which ensures that regardless of what happens, we are elevating in the lows of the cycle and remain resilient in generating good shareholder returns. Helping the world grow the food it needs is something that is important to us, and we are working hard to ensure that our business is thriving for the next 20 years, next 100 years. And these moves will serve as a mean to make that happen. So we're both challenged and inspired by the journey that's ahead of us. And while in any session like this, there wasn't time to get into the details of each and every one of all our internally focused initiatives today. I can assure you that we will continue to be committed to sending our people home safely each and every day, being good stewards of the natural resources that we're blessed with and progressing our digital transformation journey to achieve even more efficiencies across every aspect of our business. And while Luciano talked about, and I think many of you appreciate, we do have strict set of financial criteria that any emerging initiative must set and meet. We're closely watching value creators that serve to eliminate risk or further grow our competitive advantages. So as you can tell, hopefully, from the team, we are motivated and optimistic about growing our business the right way. And at the end of this all, I just want to thank you again for your participation and participation during this 2.5 hour session. So with that, I think I'm going to invite the entire leadership team up to the stage, and we will close with a -- what do we have here a 25-minute question-and-answer? Q&A? Thank you.

We're going to follow the same format that we have been following for the previous ones. Again, for this session, it's open to all topics or whatever topics we've covered or whatever is on your mind is open game. Please limit your questions to one at a time so that we can get to all the questions.

It's Carl Chen with Point72 Asset Management. Can you please talk a little bit about your kind of thinking and calculus behind Faustina and obviously, the nitrogen assets seem to be valued pretty highly in the market these days. Do you see more value being unlocked through an asset sale or a partial ownership sell-down? Or do you see it having more value through retaining the portfolio?

Yes. Let me start and maybe Luciano and if Karen, you've got something to add, please do. Luciano laid out roadmap of the things that are kind of active in what we're doing right now. We are considering all assets in the Louisiana facility, particularly the ammonia plant is something that we are discussing. I can tell you that it provides significant EBITDA uplift being an integrated part of our ammonia supply at that facility. It provides actually Louisiana, interestingly enough, as we've gone through kind of our diagnostics of each of our assets and looking at this reallocation strategy is one of our better North American return on capital employed facilities, largely because of the integrated ammonia that's there. So whether we could achieve something above the benefit that we get which is pretty hard high hurdle in itself. We're still discussing, but we just weren't ready to talk about that as part of the -- kind of some of the example poster childs that we put up on what's going on in reallocation today. Luciano?

Yes. One of the reasons why we weren't ready to talk about it is because we are assessing let's -- the separation costs because potentially, you're going to have Mosaic only part of the assets and a third party only the ammonia plant, you need first another dock or an extension of the existing docks in order to be able to accommodate ships going back and forth more than what we have today. And second, you need a new ammonia tank actually. You need to separate the ammonia tanks for both the potential buyer and for Mosaic so for assessing those investments before we make -- have a clear diagnostic if we are going to proceed or not.

Jeff Zekauskas at JPMorgan. Can you discuss the normal cash outlays for your asset retirement obligations, are they in the vicinity of, I don't know, $100 million a year -- and when you look forward over the next 2 or 3 years, do you expect them to rise or decline or stay the same? I know that you want to deep inject some of your water in Florida. And I don't know whether that's key in trying to determine whether the cash outlays will become bigger or smaller? And then second, your cash from operations in 2024 was about $1.3 billion, and your EBITDA was about $2.3 billion. So for whatever reasons, there was a significant dislocation downward in cash flow. Do we make that up in 2025? That is this 2025 an unusually good cash flow year or we've just lost a little bit of ground in 2024 and we go back to normal going forward.

Jeff, and I think Luciano can answer most of these. On the ARO question first, it is definitely more than $100 million when you aggregate everything we have in Brazil, in potash and then phosphates, but phosphates in North America is by far the biggest number. You can talk about how that looks medium term anyways. But what drives those costs is one is our reclamation responsibility on the large amount of surface areas that we reclaim on any given basis. But that's kind of at a steady state as long as we're producing, we're reclaiming and there's rules around that with the state of Florida. But then as we have some of our closed facilities and idled facilities, they go through phases where cost curves on that closure depend on what activities we're doing. But ultimately, get to a fully closed site, the maintenance ARO on those are actually quite low in the single-digit million dollars a year. But in order to line a stack, cover the stack with proper dirt and engineered design and then treat the water that actually squeezed out of the stack, those costs can look very differently. And then it's just the number that you have to do. So there's a number of front-end loaded ARO that's -- we've got Plant City that's under closure right now, Mulberry facility. We're now working on a model that we're kind of doing closure activities rather than waiting to the end of its life because we have to manage the water and the watershed, we're looking at doing partial closures of some of our stacks by lining and then being able to release that water without some of the treatment costs that you're talking about. But on an average basis, our ARO is what? Luciano?

Yes. This year is going to run around USD 300 million in cash. $300 million cash. Yes, $300 million. But the prospect is for reduction first on the -- because part of it has been front-loaded. And second, maybe, Karen, do you want to talk about the UICs, and which is if we have the authorization to do that would be a game changer perhaps for a reduction of AROs over the long term.

Yes. We are working through the permitting process, specifically at our Plant City site, which is in closure to drill an underground injection control well in which we can do a smaller amount of treatment and inject that water underground, which should help us get that site to closure. Keeping in mind that, for example, Hurricane Milton added 1 billion gallons to our water balance. And so if that water falls on Plant City, it's more water that we have to treat. And so underground injection helps us get through this process faster and should over time reduce our costs.

Yes.

And maybe over the long term, if we could target an ARO cash wise between $150 million and $200 million, I would say we would be happy with that and that's what we're working towards. On the cash flows, 2025 -- 2024 sorry, was -- had some difficulties. One, for example, we spent around 40 million extra dollars just because of the hurricanes, just on AROs as well because of the addition of water that has to be removed. That was one. We had frustration of revenue in Brazil, for example, because of credit issues, like $30 million that we had provisioned that money never came in. So it was a bad year for cash flows. 2025 is going to be much better with a small caveat, which is there will be some investment in working capital because of all the growth that you've seen on the previous slides.

Vincent Andrews from Morgan Stanley. Getting back to Slide 54, which is your weighing machine here, can you talk about where Fertilizantes fits within that? And I'm just thinking about where you're going to be able to get returns on capital employed to go to and there are 2 areas I'm thinking about. One is working capital. And then two, just when I look at Fertilizantes from the outside, I see very high sales as a function of the resale business, and I see about 10% EBITDA margins, and I assume there's a lot of capital that's employed to generate that. So I'm wondering what types of optimization there is in working capital in general available to the company? And then as well, where Fertilizantes fits within here and what you might be able to do on a go-forward basis to either improve the margins or the cash generation there?

Let me start, Vince, and I think definitely get your question. Fertilizantes is maybe a little more complicated and needs a little more explanation because it's really -- it could be more than just 2 different buckets of kind of where our return on capital employed sits the distribution side with the $30 to $40 margins on distribution solidly sits in the kind of yellow part of the scale. But that's not all of what we have in the Fertilizantes segment. So there is some pure-play commodity production at mines that could be -- and facilities that could be a little bit disadvantaged. Luciano talked about the Patrocinio or Araxa complex. And unfortunately, it makes a product SSP that is kind of the lowest analysis product. It probably has some of the lowest return profiles of anything. But then you look at our Uberaba facility, fed by our Tapira kind of world-class mine, pipeline rock there. It makes high analysis products, which have better margin return. So you kind of got to look at almost what Luciano was talking about in some of that grade out black capital reallocation is parsing almost by production line and assets to get down to where is the ROCE opportunities for uplift, and there may be very different strategies depending on what that looks like within that more macro region if that makes sense. So we're looking at that in a very methodical and precise way to realize where opportunities present themselves. And the strategies may be very different depending on -- in distribution, as Jenny talked about, pretty guaranteed margins, it's buy and sell. That's a place where we see investment opportunity to kind of push down on that side of the scale low CapEx investment, low CapEx to maintain and then looking at some of these other facilities where the EBITDA to cash conversion because of CapEx load or because it is a lower analysis commodity product may be weighing down on that free cash flow earned.

Yes. So Mosaic Fertilizantes has about 11%, not Fertilizantes but the production assets, about 11% of the total capital Mosaic is in there and it generates about 11% of the net present value. So it has, on average, the same profile as Mosaic as a whole. But as Bruce pointed out, there are several big differences among them. When you look at distribution, for example, it's -- the average working capital for Mosaic across the year is around USD 2.5 billion. So you may have anywhere between $1 billion to $1.5 billion allocated to Mosaic Fertilizantes to distribution in Brazil, plus the capital allocated to the blending facilities, you get to, let's say, ballpark $1.5 billion of capital allocated. And let's say, $300 million of EBITDA just to pick a number, you can see that return on capital is around 20%. So it sits very comfortably. But having said that, yes, we would like to reduce working capital there. I can say with just 4 months within the company. I'm not yet -- have all the grass from where the opportunities are to reduce working capital. But certainly, I'm looking forward to alternatives to manage that into reducing further.

Edlain Rodriguez from Mizuho. Bruce, I know you probably tried to be balanced in your outlook in your view. But you still presented like a very rosy outlook, what was the picture going forward. So when you look forward, what do you see risk -- that potential risk that could derail with your plans and also for Luciano, as you look into capital deployment priorities, where does share repurchase fit in there given like the current share price level?

Yes. And Edlain, thanks for the question. You and I talked in the break a little bit about this as well. I think risk can be looked at in very different segments of categories. One is on our short-term kind of EBITDA uplift, which was at $6 to $6.50 on kind of normalized production and cost. I don't see a lot of risks to upset that. It's really largely within our control. And again, it's just returning and I know the frustration of how long it's taken to return. We have that same frustration. But it's been proven and demonstrated and there's nothing holding us back except ourselves getting there. So that risk to me isn't high and not something that I lose sleep about. On the market uplift, we're not counting on a lot of P&K growth uplift for that commodity production business. We are looking at some growth in Brazil on distribution for owning the share of the customer demand and how we source that, as Jenny talked about earlier, could be opportunities for us to look different partnerships, different sourcing options. Do we reallocate from North America to South America, depending on netbacks but that's simply an optimization model and then getting that distribution margin on how we just source product, maybe a little different than what we've done traditionally. The biggest risks are maybe on the future longer-term growth. And although we have great products, great proven products, Registration is something, and you heard Jeff talk about it is something that's -- I'm not going to say it's a total Wild West, but it's inconsistent. There is less clarity on pathways to get there. So to me, it's not a win equation or if it's a matter of win. And we have tried to be -- and you've heard Jeff talk about that cautious about some of the projections that we put out there and not be overly optimistic with the $200 million coming by 2030 on the Biosciences growth. But that could be a place. And then other risks that are really outside of our control that could happen. I mean, does climate change really changed something significantly. And the pattern that we saw on weather in Florida, we're talking about 3 hurricanes in Florida and 1 in Louisiana. Does that become the normal. That's not baked into our range. That would be above and beyond. Other ones is some extraordinary geopolitical events. And I know the atmosphere and the economy today of what's going on, particularly in the United States may worry some folks. I think in the long term, that works itself out. But wow, if something really went off the rails there, I mean, that could be a risk in ways that we don't anticipate. But listen, I welcome maybe Luciano, I'll turn it over to you. How do you think about risks in how we talked about our EBITDA projections going forward.

Just comes to mind one example of what you just mentioned on the geopolitical side, like sulfur prices are going through the roof recently, right? And it looks like a panic buying. It started with less turnarounds and some issues on the refiners that produce sulfur, but it escalated very quickly right, with a lot of concerns that Chinese buyers coming from the New Year, they realized inventories were loaded, they started buying and then some trading companies are taking advantage to push prices up. So these types of things can happen in a world that is uncertain. The other thing is if that -- if tariffs really represent a shock to the overall economy, an inflationary shock as COVID and the Stimulus was, for example, I don't know what's going to happen with the CapEx levels, right? So if tomorrow, all these increase in prices of steel, they go over to machinery to services and there's lack of workforce because of clampdown immigration. Those things could really have a shock upwards and reduce our ability to do the same amount of work with the same money. Just so you know, for example, prices today of hot-rolled coil steel in the U.S. are $950, whereas Chinese product is being offered in Brazil by $500. So it's almost twice the price that people are paying outside. So that, I would say, is another risk, for example. As for your questions on buybacks, we believe that the best time to resume the repurchase program at the second half when presumably, we're going to see all this production uplift and seasonally is when the cash flows are stronger. Last year, we bought back shares at an average price of $29 so the fundamentals that we see today with that review of the strategy and everything are even better. So I would say the decision work to be made today, the trade-off between buybacks and dividends would be tilted strongly towards buybacks to do with the actual cash and trade-off between buybacks and special dividends, not the minimum dividend.

It's Andrew Wong again from RBC. Maybe just Luciano, going back to the comment on optimization and value over volume, which maybe also kind of ties into commodity phosphates business being put in that reallocation capital bucket. Can you just kind of comment on what you mean by that? What your view is on the future of that commodities phosphate business and what price or stripping margin would you consider optimization? And then just another phosphate question for Karen, actually. Can you just talk about some of the phosphate rock challenges that we've seen in the past few years. It's been mentioned a few times today, some of the impurities. I think phosphate rock production is down quite a lot in the past couple of years. Is that supposed to come back up? Is that getting better? How has that impacted operations? And how is that going to impact some of the optimization cost savings that are coming up.

Yes. Luciano, I'll just turn straight over to you for the first part.

We hired a consulting company about 4 or 5 months ago and did our first assessment of the capital returns on each and every one of our production facilities, each and every line. And that was a monstrous spreadsheet type of exercise. The reality is that only now with those that new version of SAP 4 HANA that I mentioned that we will have on a monthly basis, the very detailed profitability per site and per product. So we were kind of fine blind in the recent past. So we have an instinct of what the direction should be, but we really need to see what the real numbers are on a month-by-month basis to really have a definitive assessment of each of the assets. So that's one thing. The second thing is the outlook, the market backdrop, at stripping margins stay where they are, maybe some of those -- of that distribution of those buckets on the scale will change a little bit because we in order to do that, we assume sort of normalized through-cycle prices, right? But if stripping margins are going to stay stronger for longer. And this is a recent train. We're believers on that, but we want to observe what the real behavior of the market is over the next 1, 2 years. Ideally, and every mining company would love to do that is for you to have swing production if you could turn on and off like we do with Colonsay depending on market conditions, that will be the ideal world. But there's a lot of work to do, prep work to do before we make specific decisions on specific lines of business.

Can I address the work?

Yes.

Yes. So on the rock side, there's 2 different buckets there. There's the volume bucket. Obviously, how many tonnes are we producing and then there's the impurity piece of that, and I'll address both of them. Currently, as we speak, we're relocating another drive line into our own track. And so as the concentrate plans ramp back up and we get the volume back up with that production, we will have the ability to push the accelerator and match it on the mining side, I'm confident that we will be able to do that. On the impurities piece of it, there's 2 different things there, 2 different levers we're pulling. One is that we've actually developed the ability in our plants to process higher impurity rock. And that's been very successful. We are -- we've mastered a plan to blend that rock off so that we make sure that we're putting a steady target of impurities in DPL into our plants. The next thing I would say is in 2026, we will actually dig in efficiently into our South Fort Meade Eastern extension. And that ore body has considerable improvement in the impurity levels, which will even give us an enhanced ability to blend down impurities in that rock and allow us to continue to drive the production.

Yes. So Andrew, just on top of what Karen said, if some of that volume impact a couple of years ago was due to moving into new areas, right, and then getting established. What's happened over the last couple of years is just the demand because of our concentrate production is not pulling as much through has reduced kind of some of the production need. So we're going to save it and leave it in the ground and carry the right amount of blending inventory that Karen talked about, to manage our business. So that does have some consequence. So there's a carry-on effect there. And then the other one is -- we don't talk about it much, but our Peruvian mine at Miski Mayo has increased 30% over the last 3 years on production volume so that mine used to be about a 3 million to 3.5 million tonne mine. It now last year set a record at 4.8 million tonnes of rock production. And at mine gate that is actually in the low 40s at a cost per tonne. The issue for us that as Luciano was talking about even between Araxa in Brazil and Patrocinio, we got to ship that from the coast of Peru to the coast of Louisiana and that cost becomes a little less competitive. But it's good quality rock. It's being produced at a very low incremental addition with that increase that we've done, and we have seen reaping the benefits of that on quality and volume and even have that in the tank, so to speak, as phosphate production on the concentrate side ramps back up.

And with that, we are out of time. So I want to thank everybody that attended for all the great questions. Thanks, everybody online and in person for your attention and engagement throughout the event. Just to remind you, there are bag lunches at the back for people to take with them. Our executive team is heading to the airport fairly quickly. They do have to get back to Tampa very quickly for another engagement. And we would be interested in your feedback. So if you have any feedback for us on how the day went or any follow-up questions, please feel free to message Joan or myself, and we'll be happy to take that. So with that, thanks everybody.