Boliden AB (publ) (BDNNY) Q4 2022 Earnings Call Transcript

Boliden AB (publ) (OTCPK:BDNNY) Q4 2022 Earnings Conference Call February 14, 2023 3:30 AM ET

Company Participants

Olof Grenmark - Head of Investor Relations

Mikael Staffas - President and Chief Executive Officer

Hakan Gabrielsson - Chief Financial Officer

Conference Call Participants

Mattias Vadsten - SEB

Viktor Trollsten - Danske Bank

Adrian Gilani - ABG Sundal Collier

Johannes Grunselius - Den Norske Bank

Christian Kopfer - Handelsbanken

Krishan Agarwal - Citigroup

Jason Fairclough - Bank of America

Alexander Vilval - Pareto Securities

Liam Fitzpatrick - DB

Daniel Major - UBS

Olof Grenmark

Ladies and gentlemen, I'd for illustration to invited you to Boliden's Q4 2022 Results Presentation.

My sanction is Olof Grenmark, and I'm Head of Investor Relations. Today, we will person a results position led by our President and CEO, Mikael Staffas; and our CFO, Hakan Gabrielsson. We will besides person a Q&A session, which we will commencement present successful Stockholm. The full telephone is scheduled for 1 hour.

Mikael, nan shape is yours. Welcome.

Mikael Staffas

Thank you, Olof, and invited each of you complete -- successful nan camera complete location arsenic well. And happy Valentine to everybody. We person awesome upwind present successful Stockholm and personification has put tons of reddish hearts astir each this venue this morning. So, we consciousness very welcome.

So, nan position today, and I'll conscionable commencement pinch getting nan wide connection across. We've had a bully quarter. Even though -- [when we say] (ph) nan bully 4th is, of course, we've had bully business successful position of our prices and position that person helped america a lot, and that's, of course, nan ground for everything.

We person had little grades successful our mines, which is thing new. You each cognize astir this and it's been good guided for successful advance. But nan smelters person performed very well, not conscionable because of value and terms, but besides because of bully capacity successful wide and bully production.

We're having a small spot much than SEK3 cardinal successful EBIT coming online here, but we besides person a very beardown rate travel of much than SEK3.5 cardinal contempt the truth that we've been investing grounds amounts arsenic well, successful statement pinch nan guidance that we did have.

The dividend connection is retired arsenic well, and we're pursuing our dividend argumentation precisely nan measurement that it has been done before. And therefore, it happens to travel retired astatine SEK15.00, much than past year. Somebody made a joke this greeting that you person tweaked your dividend argumentation to beryllium capable to opportunity that you person accrued it. No, we person not. We've followed nan dividend argumentation done nan letter, and that's what it comes retired with.

Our projects are doing fine, some successful Odda and nan large task successful Aitik, are some moving up according to schedule, nan measurement that it is group up. And also, we person gotten a intelligibly improved accumulation successful nan nickel statement successful Harjavalta, wherever you tin opportunity that now nan ramp-up is completed; excessively precocious but amended precocious than never.

So, mostly speaking, nan EBIT level, if you look first astatine nan coagulated statement here, you get nan rolling 12 months, you will besides spot that 2022 was a grounds year, altogether, which was a bully thing. Now, if you look sequentially, yes, we person little profitability which is owed some to little grades successful nan mines, arsenic good arsenic that we don't person rather arsenic superb value successful position arsenic we did earlier successful nan year, moreover though they are still connected a very bully level, and I'll travel backmost to that successful conscionable a moment.

Talk a small spot astir wellness and information and situation and different sustainability issues. We've besides had a bully quarter. Our LTI wave has travel down. It is -- 2022 is nan champion twelvemonth that we've had regarding occupational health. We person a 15th twelvemonth of fatality-free operation, and nan LTI frequency, arsenic I said, is getting lower.

We've besides continued to amended our CO2 emissions. The strength measurement that we person successful -- this is nan past quarter. I will use, what I call, nan aged measure, and we will move complete to a science-based target arsenic reporting arsenic of 2023. But also, according to this aged measurement of measuring, we person had a very bully quarter. You tin spot a clear simplification compared to aforesaid play past year.

What is simply a small spot disturbing for us, it's disturbing successful galore aspects, is nan precocious sick time off that we have. That 1 is grounds high, which is thing that we're proud of. It besides does impact our productivity and does impact our production, particularly successful nan mining side, and I'll travel backmost a small spot to that arsenic I move on.

The pricing, arsenic we said, we're still -- conscionable don't fool anybody, we're still having very bully prices and terms. We are being helped by precocious metallic prices, moreover though they're not arsenic precocious arsenic they were successful nan early portion of 2022. We're besides being helped by beardown rate -- beardown currencies from our perspective, nan measurement that we measure, starting successful nan Swedish krona, we've had bully rate that does thief america pinch nan gross side.

If you look connected nan prices, arsenic we person shown this grounds galore times complete and complete again, you will spot that nan prices are good. They are measurement supra nan costs levels successful nan industry, and everybody is fundamentally making bully money. What you tin spot from this 1 is that nan ostentation that we person successful nan industry, and I'll travel backmost to talk astir our ostentation successful a while, is getting a wound into nan manufacture and we spot that nan costs levels successful nan manufacture are going up. We besides spot that particularly connected nan nickel side, nan costs levels are going up owed to nan truth that besides caller marginal accumulation is coming online, which is driving up nan costs level successful nan industry. But arsenic you see, you cannot really kick this manufacture saying that nan prices are excessively low. They are really successful a beautiful decent level, I would say.

So, if you spell done nan accumulation that we had, we had successful Aitik, I would say, decent 4th successful position of throughput, not rather arsenic bully arsenic past year. We person been deed partially by wintertime condition, but besides by nan precocious sick leave. And precocious sick leave, arsenic you know, particularly successful nan unfastened pit mines really hits america beautiful hard. If you don't person personification showing up for activity successful nan morning, that motortruck will not move. It's not that we person personification other sitting beside and waiting, and it's not for illustration successful a power room wherever location mightiness beryllium six group moving and 5 show up, wherever you tin do astir things anyway. In nan unfastened pits that's not nan case, and we're suffering from that, some successful Aitik and successful Kevitsa. The people is down to 0.17 arsenic we had guided. We're already successful Q4, coming into nan levels that we will spot besides for 2023.

In Garpenberg, besides beardown production. The zinc people is 3.6, according to nan level that we had guided for, and besides nan metallic grades being successful statement pinch what I deliberation astir group had expected.

Kevitsa, 2.6 cardinal tonnes successful nan quarter, which intends that we're complete 10. Some of you cognize that we person an biology licence that is 10. So, immoderate will opportunity person you surgery biology permit. In Finland, you tin occasionally, if you don't do a wont of it, spell complete your permits. So, this was successful nan afloat twelvemonth astir 2.2 cardinal tonnes aliases 2.3 cardinal tonnes, which is okay if you don't repetition it. So, [following] (ph) retired there. You can't expect that to really beryllium repeated, but we person proven pinch nan investments that we tin fulfill nan licence that we do have.

Boliden Area has had a bully mill measurement and bully grades. In wide speaking, successful nan Boliden Area, if you move -- look astatine it, it is astir apt nan 1 that is performing champion of each our mining areas.

Tara is coming backmost from a debased level, but it has had a bully -- comparatively bully production, expanding nan mill volumes and we're still waiting to get into nan really bully stopes to get up nan grade, but still moving connected that.

On nan smelter side, generally, a very beardown quarter. Generally bully accumulation successful nan smelters, each successful all. We've besides been capable to nutrient a batch of gold. This is by acold a grounds golden quarter. As you cognize from before, we person been suffering a small spot from having tons of golden successful intermediate products. We've been bully astatine getting it out, which is besides nan ground for getting a very beardown rate travel successful nan quarter. And we are now down to, I would say, moving superior levels that are benignant of important aliases normal for nan play arsenic such.

In Harjavalta, nan nickel statement has besides improved. You tin opportunity it's much aliases little up to afloat velocity arsenic of nan 4th quarter.

In Ronnskar, also, beardown production, beardown throughput. Also there, bully precious metallic accumulation coming through.

The zinc smelters, besides bully production. The powerfulness prices person been little than they were successful Q3, which intends that we person not arsenic overmuch arsenic earlier taken voluntary curtailments of accumulation to waste power. That has happened and we do person immoderate separator from trading power. But it's not that often and we person been capable to do what we want to do, nutrient zinc astir of nan time, which you tin see.

Bergsoe has had a planned attraction stop. Basically, Bergsoe, from nan issues that we had early successful nan year, is fundamentally up to afloat speed.

So, if you look astatine nan afloat year, arsenic I said before, nan afloat twelvemonth for 2022 is by acold nan champion twelvemonth that we've ever had with, of course, very bully value and position erstwhile you put successful nan earlier quarters that we did person successful nan year. We've had improved volumes, but nan grades were heading down already successful this 4th successful nan mines. The volumes successful smelters person been going up. Generally, smelters person had a very bully year, grounds twelvemonth successful smelters.

And then, of course, we've been struck by precocious ostentation and particularly arsenic we measurement successful nan Swedish krona that has besides been suffering from nan existent speech rate, arsenic overmuch arsenic it helps america connected nan gross side, it's, of course, besides biting america connected nan costs side. If we look conscionable 4th 4 complete 4th four, we're adjacent to 20% ostentation level. If you look astatine nan full year, arsenic I said, present it's not rather arsenic overmuch because it was a small spot little successful nan opening of nan year, but is good complete 15% for nan full twelvemonth successful position of inflation.

The mines, you tin spot very akin types of profit level for nan mines -- nan individual mines this twelvemonth compared to what they person been successful erstwhile year. This is, of course, a substance of amended prices and position and little grades that makes this to go comparatively similar. What is of people is absorbing and caller is this image connected nan smelter side, wherever you tin spot that galore of nan smelters person taken large measurement forwards and are now bringing very bully profitability levels. Harjavalta especially, but besides Kokkola and Odda person accrued margins during nan year, each successful all.

Exploration. We are besides coming releasing nan R&R statement. Number one, which I deliberation I've alerted before, we person not curtailed investments into exploration, alternatively it's a grounds twelvemonth successful position of spending connected exploration. There is partially an ostentation portion successful this arsenic well, but it's besides an accrued ambition of being capable to research nan measurement that we want to do.

The really bully news successful this R&R update is Garpenberg, wherever we person some improved resources and improved reserves astatine nan aforesaid time. And you person to remember, we measurement resources without nan reserves successful them. So, erstwhile I opportunity that it's -- nan sum has gone up moreover more, which is very good, which intends that we from a strategical constituent we'll person to travel backmost to you astir really we're going to grip nan improved geological business that we person successful Garpenberg.

Otherwise, comparatively mini updates. Boliden Area continues to adhd twelvemonth per year. Tara pinch nan issues pinch nan h2o leak that we've had and truthful deficiency of anticipation for exploration, not rather a twelvemonth successful each year. And past successful nan unfastened pits successful nan north, we really person a small spot of simplification of nan comparatively agelong times, arsenic we person had to facet successful higher costs. But that antagonistic successful position of measurement comes backmost pinch higher mean grades. And Aitik has now moved from 0.22% to 0.23% mean grade, again successful nan R&R statement.

So, having said that, you tin spot present now successful Garpenberg what a agelong life of excavation we have, and that's something, arsenic I said, alerted that we will person to deliberation astir complete clip what we tin do astir that from a task constituent of view, and nan minimal resources person besides fared comparatively well.

With that, I will time off it complete to you Hakan to spell done immoderate of nan finances.

Hakan Gabrielsson

Thank you, Mikael. Good morning. So, I'll conscionable effort to sum up nan financial position that we have. Mikael has covered portion of it.

We are reporting an EBITDA coming of SEK5 billion, which is connected par pinch Q3 and astir SEK300 cardinal up compared to nan aforesaid 4th past year. Looking astatine EBIT earlier inventory revaluations, we are astatine SEK3.2 billion, which is down from nan SEK3.5 cardinal that we saw successful Q3. The quality is chiefly nan write-down of exploration authorities successful Kylylahti that we talked astir successful nan Capital Markets Day, and we charged to nan P&L this quarter.

Investments are SEK3.7 cardinal -- complete SEK3.7 billion, which is up compared to some comparisons. We do spot nan projects successful Odda and Aitik getting up to speed. Free rate flow, SEK3.5 billion. This is successful truth nan strongest rate travel number we person reported successful a 4th and, of course, it feels bully to person -- to beryllium capable some to study grounds investments and grounds rate travel successful nan aforesaid quarter.

By business area, arsenic you tin see, mines spot an effect from little grades. We are already utilizing nan profit level location compared to some comparison periods, while smelters is, for nan 4th consecutive quarter, unchangeable connected a very bully level astatine astir SEK1.3 billion, SEK1.5 billion.

Looking astatine study of nan changes successful profit this 4th compared to nan aforesaid 4th past year, we are up astir SEK350 cardinal compared to past year. We person a bigger effect from favorable currencies pinch a beardown dollar comparative to nan Swedish krona, which adds up to astir 1.3. Then we person seen little metallic prices successful nan 4th year-on-year, which is past compensated by a bully improvement connected metallic premium and byproduct prices.

Volume-wise, we are astir unchangeable compared to past year. We person mislaid astir SEK1 cardinal worthy successful grades, but that has been compensated by a bully capacity successful smelters, and successful this 4th by a simplification successful inventories. Most importantly, we person reduced nan inventories of golden that was tied successful nan processes and that has had a important publication to nan P&L.

Inflation and costs is up. We are expanding nan costs by astir SEK941 million. Included successful location is an accrued reclamation reserve -- aliases costs reclamation successful Kokkola, SEK54 million, but it's a important costs summation and we are looking astatine astir 20% ostentation successful nan quarter. Out of that summation of SEK940 million, SEK700 cardinal is an summation successful power and consumables, consumables meaning an explosives and similar. So that is really wherever we spot nan costs increase. The remaining parts are reasonably stable. I already talked astir nan write-down that we had successful Kylylahti which is nan SEK259 cardinal affecting comparability.

Looking sequentially Q4 versus Q3, we person a simplification of SEK295 million, which is fundamentally nan aforesaid magnitude arsenic nan write-down I conscionable talked about. We person stronger prices. Metal prices are up, particularly copper. Nickel is nan astir important 1 present and silver. Volumes are besides positive. Lower inventories and bully accumulation successful smelters. On nan costs side, we are up. There is simply a reasonably important seasonal effect here. I would opportunity that astir SEK200 cardinal is simply a seasonal effect betwixt Q3 and Q4 that we spot each year. And then, we person a spot of ostentation and nan SEK54 cardinal reclamation costs successful Kokkola.

Moving connected to nan rate flow. Again, grounds precocious rate flow, which is, of course, driven by bully underlying net pinch nan EBITDA excluding process inventories of adjacent to SEK5 billion. We person precocious investments, but we've been capable to merchandise a batch of moving capital. It's astir SEK3.2 cardinal released successful nan quarter. This is -- this brings inventories down to a normal level for this clip of nan year. We person reduced a batch of nan golden that we had successful nan processes. And we've besides reduced astir of nan nickel that we talked astir antecedently -- nan other nickel banal that we had.

Taxes is reasonably high. There is ever a lag betwixt nan taxes charged to nan P&L and nan taxes charged to nan rate flow. So far, for nan afloat year, location is astir SEK400 cardinal lag successful taxes, wherever we are charging much to nan P&L than nan rate flow, and that will, of course, beryllium recovered successful nan pursuing year.

So, it's nan last descent for maine then. We extremity nan twelvemonth pinch a very beardown financial position. We have, successful fact, a nett rate position -- mini nett rate position. It says 0.0 here, but it's a positive earlier nan 0.0 if you get that. And also, we person a nett costs capacity of SEK23 cardinal successful nan opening of nan year. Those SEK23 cardinal are made up of SEK12 cardinal rate and SEK11 cardinal credits that are not yet utilized. So, we consciousness for illustration we're successful a beardown position, and again a beardown quarter.

So, pinch that, Mikael?

Mikael Staffas

Thank you, Hakan.

Hakan Gabrielsson

I already talked astir that, Mikael.

Mikael Staffas

Yes, you talked astir nan impairments, truthful we'll jump that one, and very quickly talk astir nan outlook going forward. And here, location is perfectly thing new. We are still guiding for nan aforesaid grades arsenic we did past quarter. We're still guiding for nan aforesaid CapEx arsenic we did past quarter. I deliberation there's really a small spot of accommodation connected nan attraction stop, which has to do much astir nan nonstop prices and position astir what is really nan costs of nan idle time. But that's a insignificant one.

So, nan summary is location is thing caller successful position of nan guidance going forward. You person seen each these numbers before.

So, pinch that -- I'll conscionable punctual you each precisely why we're here, what nan intent is and nan imagination and nan values.

And pinch that, Olof, I'll time off it complete to you to guideline america done nan questions.

Question-and-Answer Session

Olof Grenmark

Thank you, Mikael. Ladies and gentlemen, that opens up our Q&A session. And we will commencement present successful Stockholm. The first mobility comes from Mattias Vadsten, SEB, please.

Mattias Vadsten

Thank you very much. Two from maine to commencement with. If we look connected nan financial consequence per unit, you person a statement called smelters up there. It's had a delta of immoderate SEK750 cardinal year-on-year, I presume. And if you could conscionable elaborate a small spot connected what this is? And do we person an expected result for 2023 aliases really does it look?

Hakan Gabrielsson

Well, what it is, is metallic premium basically. That's nan short answer. As you know, we've had a business successful Europe wherever nan -- I mean, driven by nan precocious energy prices wherever vanished metallic has been difficult to get clasp of from nan customer side, and that has driven up nan metallic premiums to very precocious levels. Now we group nan soul prices betwixt smelters and nan caput agency annually. So that number for adjacent twelvemonth will extremity up successful -- retired successful nan smelters result, but location is simply a lag erstwhile mounting those soul prices -- metallic premiums.

Mattias Vadsten

Okay, good. And nan adjacent one, benignant of, nan mineral resource, which is successful Tara Deep. Versus past year, tin you picture really this compares to what you expected done nan year, maybe, arsenic nan twelvemonth has gone by? And what do we request to spot going guardant really for -- successful position of these investments to spell ahead?

Mikael Staffas

Well, number one, it is according to expectation, because we haven't explored anything, because we sewage stuck pinch nan h2o successful nan drift and couldn't research thing from underground and very constricted from surface. So that's -- you tin opportunity it's a mislaid twelvemonth successful Tara. We're still very hopeful that we will find overmuch more. We will request much successful bid to motivate nan investment. Exactly wherever that is, we don't know. We'll get backmost to that erstwhile we person much exploration results nether our arms.

Mattias Vadsten

Thank you.

Olof Grenmark

Then we person Viktor Trollsten, Danske Bank, please.

Viktor Trollsten

Thank you very overmuch for taking my questions. Firstly, connected costs per mine. If we look successful Aitik, Garpenberg and besides Kevitsa, conscionable we are looking at, let's say, 15% costs ostentation successful '22 versus '21. I deliberation looking astatine OpEx per tonne milled ore, we had 71 successful Aitik for example. Now we are talking astir ostentation tapering off, while besides there's upside to milled volumes successful '23. So, really should we look astatine these figures '23 complete '22? Should we expect akin levels successful '22 aliases still inflation?

Hakan Gabrielsson

I deliberation that's, successful 1 way, a difficult question, because, arsenic I mentioned, SEK700 cardinal retired of nan SEK900 cardinal costs summation year-on-year is related to power and consumables, which is past varying a lot. Now we person seen prices -- marketplace prices coming down successful nan earlier parts of nan year. But nan crystal shot to spot really nan afloat twelvemonth will create is -- that's much difficult, but truthful acold it's looking good.

Viktor Trollsten

Okay. And then, possibly connected nan imaginable Garpenberg project, if I may, fixed that you person now 35 years' reserve life, if I'm not wholly mistaken, I guess, optimal life of excavation successful nan region of 15 years, 20 years. Firstly, is that a adjacent assumption? And also, successful position of guidance capacity, fixed that you are successful an finance shape now, do you person capacity successful '23 aliases '24 to really drill something?

Mikael Staffas

Well, I will opportunity that, of course, you're right, we're having a assets that is bigger than possibly what is due for nan existent setup. We are doing correct now conceptual studies astir what we tin do astir this, what nan options are, really that could perchance beryllium mined faster, but we are beautiful acold still from immoderate decision. We will request to person some amended studies and, by nan way, we will request different biology licence for that. So...

Viktor Trollsten

And then, conscionable 1 last speedy one. But connected nan readying prices, which you summation connected metals but your [FX] (ph) unchanged. Just what's nan reasoning down some metallic prices and moving currencies?

Mikael Staffas

Maybe I should conscionable -- you've seen nan 1 that has travel retired now pinch nan R&R statement. Those are already -- they are a small spot obsolete, because they were nan ones that were correct successful nan opening of '22, which is besides erstwhile we took nan costs aft we did nan R&R statement. So, location was a lucifer betwixt semipermanent prices and nan cost.

As we now spell into nan adjacent readying season, we're already starting that one, nan semipermanent prices will beryllium higher, but besides nan costs will beryllium higher, because now nan ostentation that happened during this twelvemonth will travel into that calculation. So, it's caller numbers that travel successful present successful nan R&R connection that you will spot successful a twelvemonth from now.

Now, nan logic why metals move successful 1 measurement and rate move successful different way, I don't cognize Hakan if you want to spell into nan specifications astir precisely really we do our crystal ball, but it's a benignant of a champion estimate, and we person possibly been excessively blimpish connected currencies. On nan different hand, we besides cognize that astatine definite times nan Swedish krona gets overmuch stronger arsenic well.

Hakan Gabrielsson

I agree. I mean, we've typically been possibly much blimpish connected nan rate broadside than nan metallic prices. You don't person to spell that acold backmost to spot a dollar to Swedish krona astatine 8 for example. But it's -- I deliberation you're correct successful that assumption. So, we'll person to look astatine it successful nan adjacent twelvemonth update, which we are really getting into rather much aliases little now.

Viktor Trollsten

Thank you.

Olof Grenmark

Adrian Gilani, ABG Sundal Collier.

Adrian Gilani

Yes. Thank you. Two questions from my end. First of all, tin you -- are you capable to quantify nan EBIT effect from nan voluntary powerfulness curtailments during Q4?

Hakan Gabrielsson

Let's see, that's comparatively limited. Olof, tin you thief america here?

Olof Grenmark

SEK56 million.

Hakan Gabrielsson

SEK56 million. Yes.

Mikael Staffas

Yes. But, Olof, that's nan SEK56 cardinal which is nan separator connected nan powerfulness that we person sold, but location is besides costs of opinionated still. So, nan truth that we're trading doesn't springiness that much, but it's amended than not doing it, but it's a very mini number.

Adrian Gilani

Okay. Thank you. That's clear. And also, conscionable a follow-up connected nan ostentation question. In erstwhile quarters, you've really fixed america a benignant of percentage, really to deliberation for nan adjacent quarter. Now you benignant of conscionable opportunity it's tapering off. Has visibility decreased aliases do you person a percentage...

Mikael Staffas

Visibility -- no, I really deliberation I said it. I should person possibly been much clear. I deliberation that for Q1 complete Q1 past twelvemonth we're talking astir 10%. So, it's intelligibly down from nan 20% that we person seen, but it's not adjacent to zero. But arsenic Hakan mentioned before, a ample portion of this is what's going to hap pinch power prices and lipid prices and truthful connected that plays a large part. So, it is moreover much difficult to person crystal balls successful spot than it usually is.

Adrian Gilani

Okay, convey you.

Olof Grenmark

Johannes Grunselius, Den Norske Bank.

Johannes Grunselius

Thank you. Johannes Grunselius here. A mobility connected your smelters, because Harjavalta did peculiarly well, sparkling star. Could you springiness immoderate colour connected that? I cognize they person -- obviously, location is simply a nickel statement there, possibly that's nan secret, aliases could you springiness immoderate spirit why that is shining? And also, if it was benignant of a soft net advancement passim 2022, and we should expect much of it aliases nan aforesaid successful 2023?

Mikael Staffas

I would put it this way. Harjavalta has for a while been our best-performing smelter. So that it has that successful nan base. If you past commencement adding nan nickel statement to it, which of people was a small spot of a vexation successful nan early portion of nan year, but towards nan later portion of nan year, nickel was going connected full.

If you past connected apical of that put that we did person tons of inventory of gold, and inventory golden intends not conscionable that you are tying up moving capital, you besides tying up profits. But erstwhile you get that out, that of people gives a boost successful nan profit. So, each these things play into nan spot of Harjavalta and that's why we person very bully performing units.

Johannes Grunselius

Then besides a mobility connected -- I mean, we person seen a batch connected the, well, copper TC/RCs, what's going connected location successful position of world benchmarking? Could you springiness immoderate colour connected nan TCs for zinc, please?

Mikael Staffas

Not really. These negotiations are ongoing arsenic we're speaking. We are not astatine that table, we're only seeing it from nan sideline. I would for illustration not to speculate. I deliberation that astir group would work together that we are seeing an summation of nan zinc TCs, but to what level, I don't know.

Olof Grenmark

Any different questions present from Stockholm? Christian Kopfer, Handelsbanken, please.

Christian Kopfer

Thanks for that. Just 1 short follow-up from my side. I deliberation besides nan accumulation connected nan precious metals, particularly connected golden was very precocious successful Q4. Is this thing that you expect to remain, aliases was it thing bonzer present successful nan quarter?

Mikael Staffas

It was extraordinary. We were releasing golden that was sitting successful inventory. So, nan Q4 golden levels are astir apt going to beryllium a grounds for a agelong time. However, if you look for nan afloat year, I deliberation we besides person grounds gold. That's much benignant of reasonable, because we are -- because of nan very beardown precious metallic works that we person pinch very bully operating capacity successful Harjavalta, we are sourcing much golden which concentrates, because that's a bully economical thing. So that golden accumulation connected an yearly ground could stay astatine a precocious level, that's true, but not nan 4th times four.

Christian Kopfer

Right, okay. Did you mention the, telephone it, net effect from this merchandise of golden successful Q4, I mean, successful unsmooth numbers?

Hakan Gabrielsson

No, I didn't mention that, but I'd opportunity it's location astir conscionable supra SEK100 million, that's my estimate.

Christian Kopfer

Okay. Thank you very much.

Olof Grenmark

Any last questions present successful Stockholm? Operator, please spell up pinch nan questions that we mightiness person connected nan line, please.

Operator

[Operator Instructions] The adjacent mobility comes from Krishan Agarwal from Citigroup. Please spell ahead.

Krishan Agarwal

Hi, acknowledgment a batch for taking my question. Couple of them person already been asked. Just a speedy follow-up connected Viktor's mobility connected inflation. So, could you thief america pinch nan full power costs successful 2022, conscionable to get a spirit arsenic really overmuch of power costs ostentation had been location successful nan afloat year? And then, is location immoderate benignant of anticipation based connected nan visibility you mightiness person connected your contract, that really that power costs guidelines is apt to style up successful nan afloat twelvemonth 2023? That's my first question.

Hakan Gabrielsson

Okay. The full power costs that we spot successful nan afloat twelvemonth of 2022 is astir SEK4.5 billion. And erstwhile we opportunity energy, we see diesel and a small bits of ember that we person and -- but chiefly diesel and past electricity. The energy of that is astir SEK2.5 billion. Out of that SEK2.5 billion, we person astir 80% hedged. We talked a spot astir nan value levels successful nan latest Capital Markets Day. So, location are immoderate slides connected that successful there. Then location is, of course, besides an indirect effect from nan power connected various consumables. Another moving parts that we person been talking astir is explosives, which is I judge astir SEK1 cardinal successful a year, conscionable to springiness immoderate numbers. The visibility is -- for diesel and electricity, I mean, we person 80% of nan energy hedged. But for nan remaining part, we are afloat exposed to marketplace prices. So constricted visibility going forward.

Krishan Agarwal

Okay, understood. And then, a speedy mobility connected -- location was a news travel that Anglo American is looking to do thing pinch nan Sakatti mine. And Boliden whitethorn beryllium willing successful that. Any thoughts there?

Mikael Staffas

No, location is not really thing to opportunity astir it. Sakatti is wherever Sakatti is, and past Angola is managing that project.

Krishan Agarwal

Okay, acknowledgment a lot.

Operator

Please authorities your sanction and company. Please spell ahead.

Unidentified Analyst

Hey, tin you perceive me? Sorry.

Mikael Staffas

Yes. We perceive you.

Unidentified Analyst

Hey, [Shree] (ph) from RBC. Thanks for nan call. My 2 questions, please. First 1 is connected Aitik. The reserves person travel down. So, erstwhile was this area that's been removed from nan scheme expected to person been mined and really are these changes going to effect nan adjacent fewer years, please?

And nan 2nd mobility is connected smelting. We are seeing powerfulness prices falling. So, do you expect smelters successful Europe to restart successful nan adjacent term? Thank you.

Mikael Staffas

Regarding Aitik, nan tonnage that's been removed was nan tonnage that was connected a little people that was towards nan rear portion of nan plan. So, it doesn't impact thing wrong short term, but taking them out, arsenic I said before, has accrued nan mean people from 0.22 to 0.23. In position of what is going to hap pinch Aitik, I deliberation this doesn't really matter. I deliberation there'll beryllium tons of restatements of R&Rs betwixt now and 10 years aliases 15 years guardant erstwhile this mightiness go very relevant. So that was that.

Regarding nan powerfulness prices successful Europe, I deliberation you'll person to inquire our beloved friends successful Europe precisely what they're going to do pinch their zinc smelters. My hunch would beryllium that, yes, arsenic powerfulness prices travel down, we will spot much zinc smelting capacity coming backmost online successful Europe. But really accelerated and precisely really that will beryllium done, don't know.

Hello operator?

Operator

The adjacent mobility comes from Jason Fairclough from Bank of America. Please spell ahead.

Jason Fairclough

Yes, bully morning, folks, and acknowledgment for taking nan question. Just a small spot of a mobility connected nan inflationary effect connected CapEx. I deliberation we're ever guessing a small spot erstwhile it comes to your CapEx numbers. I deliberation nan guideline is for SEK15 cardinal for '23, that's 2 times your D&A. So, possibly you could conscionable talk to a small spot astir really you're reasoning astir stay-flat CapEx for nan business, right? So, D&A, SEK6 billion, SEK7 cardinal per year. Is stay-flat CapEx that level, aliases is it much for illustration SEK10 cardinal to SEK12 cardinal to support nan output flat?

Hakan Gabrielsson

Looking astatine nan five-year guidance that we talked astir successful Q3, aliases nan SEK15 cardinal guidance that we talked astir successful Q3 and successful nan Capital Markets Day, retired of that, half of that number is related to 3 important projects; nan Ravliden and Kristineberg description , nan Aitik reservoir task and Odda.

The remaining part, astir SEK7.5 cardinal is astir apt a reasonable level going forward, past it will vary. I mean if location is simply a very tight financial situation, we could postpone parts of that. The stripping will alteration complete time, particularly arsenic we get person to nan life of excavation successful Kevitsa, for example.

But I would opportunity that successful nan numbers that we person coming and besides including nan latest ostentation number, SEK15 cardinal total, retired of which half is 3 very circumstantial projects that are not location for nan agelong word then.

Jason Fairclough

If I could conscionable travel up. So, you talked a small spot astir nan costs ostentation successful nan business, a batch of that's evidently energy. Do you deliberation that those CapEx numbers are existent for what's happened pinch costs inflation? So, successful different words, conscionable reasoning astir nan OpEx publication crossed into CapEx figures.

Mikael Staffas

Just arsenic -- if you travel us, you will cognize that we did set immoderate of nan circumstantial CapEx numbers for immoderate of nan circumstantial projects upwards during nan twelvemonth because of CapEx inflation. There was thing really unusual for nan projects themselves. As for opinionated correct now, and we are reiterating nan guidance, we don't spot that location is immoderate much CapEx ostentation that we had already put into those calculations. So, we don't spot immoderate request to set thing astir that. So, we consciousness that we astatine slightest -- unless thing much unusual happens, we person capable margins to grip ostentation successful those numbers that we person fixed you.

Jason Fairclough

Okay. If I could beryllium cheeky and possibly conscionable inquire 1 much speedy one. Harjavalta, tin you conscionable punctual us, is location immoderate complications to nan operations location because of nan warfare and -- Russia-Ukraine?

Mikael Staffas

Not arsenic of now, but you are bringing up a adjacent point. We person our neighbors connected nan business area, Norilsk Nickel Harjavalta that are not sanctioned correct now, could perchance go sanctioned. But moreover if they're not sanctioned, location person been pressures connected them from self-sanctioning from others. They are truthful acold operating fine.

If they were to cease operation, that doesn't chiefly affect, arsenic we person nary worldly travel that goes betwixt us. But yes, we person a neighbor, we person power balances, we person tons of different things wherever we stock nan costs. So, what we said is that if they were to person to unopen down for immoderate logic that we don't control, that would impact america negatively successful nan consciousness of costs, possibly not successful a worldly way, but it would alteration nan effect arsenic antagonistic successful position of cost, but we should beryllium capable to proceed to produce.

Jason Fairclough

Okay, convey you very much.

Operator

The adjacent mobility comes from Alexander Vilval from Pareto Securities. Please spell ahead.

Alexander Vilval

Hello. Thanks for taking my question. Two questions, please. First regarding Garpenberg. Could you opportunity thing benignant of conceptually astir nan possibilities for Garpenberg successful nan longer term? Obviously, it's possibly early days, but really -- which options do you person regarding imaginable description aliases benignant of structural changes regarding nan operation?

And secondly, immoderate expectations regarding unit costs ostentation successful 2023?

Mikael Staffas

Let's conscionable commencement by Garpenberg. It's highly early days. We're looking astatine conceptual studies. But conscionable to beryllium very clear, nan Garpenberg operations is correct now a very well-balanced operation. There is not really immoderate surplus capacity successful immoderate of nan stages successful nan production, which intends that we will astir apt request much shaft capacity, possibly a caller shaft to beryllium capable to nutrient more. We will astir apt request a 2nd mill statement successful nan mill, because nan existing mill cannot really return overmuch more. We will request an extended tailing facility, which has each kinds of implications astir really these things tin beryllium done. But those are giving a fewer of nan things that we are, of course, looking into and spot really we could perchance manage. It's very early days.

And then, labour inflation, regarding Finland, if you publication successful Finnish news, nan corporate bargaining statement is going connected correct now. We're talking astir about 3.5% twelvemonth 1 -- 3.5% to 4% twelvemonth 1 is coming done astir apt past successful '23. Swedish corporate bargaining agreements are not done yet. They will beryllium done precocious March, early April. We'll spot wherever they extremity up. And Norway has already concluded since a while backmost astatine astir 4%, '23 complete '22. Ireland, we are still negotiating, we don't person a corporate bargaining statement yet.

Alexander Vilval

Thank you.

Operator

The adjacent mobility comes from Liam Fitzpatrick from DB. Please spell ahead.

Liam Fitzpatrick

Good morning, everyone. Three aliases 4 questions from my side, if that's okay. First of all, connected nan moving capital, it's a bully capacity successful Q4. Are you benignant of now astatine a unchangeable level? Did you undershoot? Just immoderate benignant of colour connected wherever you spot moving superior versus that benignant of end-of-year starting point?

And then, connected -- successful position of nan Aitik benignant of labour readiness rumor that you had successful Q4, tin you springiness america immoderate benignant of consciousness aliases sensitivity aliases what that would mean erstwhile that normalizes successful position of uplift to EBIT successful Q1 and beyond?

The 3rd question, conscionable connected zinc premiums. So, my knowing is there's going to beryllium a large assistance successful statement premiums. Can you springiness immoderate colour successful position of what that delta is going to beryllium for your business successful 2023 versus 2022?

And past last mobility connected Tara. I deliberation you told america astatine nan CMD that nan powerfulness statement was adjacent to expiring. Where does that asset, erstwhile it rolls onto spot terms, beryllium successful position of margins? And are you comfortable that cognition should beryllium beautiful dependable arsenic we spell done nan twelvemonth from an wide costs perspective? Thank you.

Mikael Staffas

Should -- yeah, you commencement and I'll...

Hakan Gabrielsson

Yes. Good morning, Liam. Working capital, arsenic you know, we typically person debased level. I mean location is simply a seasonality successful this and we person debased levels fundamentally each Q4 related to nan behaviour of business customers and truthful on. That is nan truth besides this year, I would say, it's a normal level. It's somewhat higher than nan aforesaid -- than 1 twelvemonth back, but astatine that clip we had nan rumor pinch h2o inflow successful Tara, which meant that we were short of zinc.

So, basically, moving superior is connected a normal level for year-end. We person travel down connected astir of nan gold, we person travel down connected nan nickel and we're a spot short connected a mates of different areas. Q1, pinch nan aforesaid seasonality is typically a 4th wherever we build immoderate moving capital. I expect that to hap besides this year. So basically, nan short reply would beryllium a normalization.

Mikael Staffas

Then if we return immoderate of your different questions, I tin return Tara power. Yes, Tara is simply a high-cost mine. Tara is very delicate to these benignant of inputs. It looked, if I want to beryllium frank, beautiful bad for a while successful nan fall. It looks amended now. I mean, nan powerfulness prices person travel down successful Ireland rather a batch and we are managing to grip that. Exactly what it would mean for our costs position, location are much things into this, there's besides things connected nan gross broadside and of people premiums and truthful connected play into this picture. I can't really springiness you immoderate much item astir that.

The nett effect of zinc premiums for us, I don't know, Hakan, if you person immoderate benignant of number. It's, of course, positive. You should beryllium alert that immoderate of these zinc premiums person already travel done successful Q4. But I don't cognize if we person immoderate benignant of estimates astir that.

Hakan Gabrielsson

I deliberation location is -- I mean if you conscionable look astatine nan quarter-to-quarter, location is simply a statement successful nan EBIT bridge. And arsenic I said, astir of nan gross successful nan different successful nan business area smelters for nan afloat twelvemonth is zinc premiums. So it's important numbers. But past if you are asking astir an outlook going forward, I deliberation that's astir apt a spot difficult to say. I mean it depends connected nan wide zinc market, nan energy improvement and truthful on.

Mikael Staffas

And past your past 1 astir labour readiness successful Aitik, nan reply is we don't really person a number, but if we spell backmost to normal levels, we would person 3% much readiness of labor, which fundamentally past theoretically will mean 3% much accumulation but that's possibly oversimplifying it because location are different ifs and buts astir this, but that's possibly nan bid of magnitude. And past you tin play astir what that means.

Liam Fitzpatrick

Okay. Yes, that's fine. Just connected nan zinc side, could you conscionable punctual america what your spot to statement vulnerability is? And present we are saying Q4, but I return it nan Q4 numbers would only person included nan spot premiums. Is that right, nan contracts will use from 2023 onwards?

Mikael Staffas

That's a bully question. I'm not judge that we've ever travel into discussions astir really overmuch connected nan metallic broadside that we person connected spot and connected fixed yearly contracts successful premiums. Do you person that number, Hakan? I didn't moreover cognize myself.

Hakan Gabrielsson

No, but I deliberation -- I mean, successful general, nan spot income is astir 10%, 15%. So that should screen it.

Mikael Staffas

Yes. I would opportunity that, let's say, 80% to 85% is really connected yearly zinc premiums that are much aliases little been group for nan year.

Liam Fitzpatrick

Okay, convey you.

Operator

The adjacent mobility comes from Daniel Major from UBS. Please spell ahead.

Daniel Major

Hi, thanks. Couple of questions. Firstly, astatine Kevitsa, you've reduced nan reserve life from 2034 to 2032. It's not a ace long-duration asset. Can you springiness america immoderate update connected nan adjacent improvement of Kevitsa? I deliberation it's pushback five. When you would expect to o.k. that and what nan effect connected nan benignant of plus long and immoderate imaginable CapEx associated pinch nan task would be?

Mikael Staffas

You're perfectly right. We are looking into nan pushback five. The pushback 5 is not successful nan reserves statement, it's much successful nan resources statement. We are -- and it's measurement excessively early to springiness immoderate numbers, but we are looking into that. We dream that we will astir apt successful '24 maybe. So, successful a twelvemonth -- a twelvemonth to 2 years from now to make a determination regarding imaginable pushback number five. But nan CapEx numbers is excessively early to opportunity and besides nan nonstop effect connected life of excavation is besides excessively early to tell. And also, conscionable to beryllium very clear connected that, we will request a caller tailings installation for a pushback five. So, location are besides biology issues linked to that.

Daniel Major

Okay. But conscionable to, I guess, framework it successful nan discourse of erstwhile CapEx projects, would it beryllium adjacent to presume would beryllium a important multibillion SEK task for a caller tailings reservoir and nan pushback five, is that nan correct measurement of reasoning astir it?

Mikael Staffas

I deliberation it's going to beryllium very difficult to get it for little than SEK1 billion, if you are asking it that way.

Daniel Major

Yes, multibillion, I suppose. Okay. Yeah. Thank you. That's each from me.

Operator

The adjacent mobility comes from Daniel Major from UBS. Please spell ahead.

Daniel Major

Thanks. I deliberation I've conscionable had my question. Thanks.

Operator

There are nary much questions astatine this time. So, I manus nan convention backmost to nan speakers for immoderate closing comments.

Mikael Staffas

Okay. Well, convey you each for each your questions and convey you each for participating. I wish you each a very bully day. And I dream that you will each person a very bully Valentine's Day. Thank you all.