Earnings call transcript: Metro Mining Q3 2025 highlights operational gains

Metro Mining (ASX:MMX), with a market capitalization of $1.13 billion, recently held its Q3 2025 earnings call, highlighting significant operational improvements and strategic initiatives. Despite external market pressures, the company maintained robust financial health, evidenced by a stable stock price at 0.073, within its 52-week range of $27.35 to $42.80. According to InvestingPro analysis, the company’s stock has shown resilience with a notable 6% gain over the past week, though it remains 22.8% down year-to-date.

Key Takeaways

• Metro Mining repaid $11.5 million in debt, showcasing strong cash flow management.
• The company increased its production run rate to 8.5 million tons, enhancing productivity.
• Bauxite prices experienced slight softening, while aluminum prices dropped by 15%.
• Metro Mining remains strategically positioned with competitive cost structures amid market challenges.

Company Performance

Metro Mining demonstrated resilience in Q3 2025 by enhancing its operational capabilities and maintaining a healthy margin of $16 per ton. With annual revenue of $725.9 million and a revenue growth rate of 17.89%, the company strategically positioned itself on the industry cost curve, benefiting from long-term freight contracts that provide cost advantages. Despite a challenging market environment with softening bauxite and aluminum prices, Metro Mining’s operational efficiency and cost optimization efforts enabled it to maintain a competitive edge, reflected in its strong Altman Z-Score of 5.67.

Financial Highlights

• Debt Repayment: $11.5 million, indicating strong cash generation.
• Capital Expenditure: Just over $1 million, reflecting disciplined capital management.
• Interest Payment: $2.5 million, showcasing financial prudence.

Outlook & Guidance

Metro Mining is maintaining its original production guidance, targeting a delivered cost of $30 per ton to China. The company anticipates continued growth in the imported bauxite market and potential expansion of production capacity to 9-10 million tons with the Ikamba terminal. Analysts on InvestingPro forecast 6% revenue growth for FY2025, supporting the company’s optimistic outlook despite expecting slight softening of contract prices. The company’s Fair Value assessment and detailed growth projections are available to Pro subscribers.

Executive Commentary

CEO Simon emphasized the company’s strong position, stating, "Nothing in the last quarter has changed my view on the long-term potential for Metro Mining." He further highlighted, "The industry structure is continuing to move in favor of Metro Mining," underscoring the company’s strategic advantages.

Risks and Challenges

• Market Price Volatility: Fluctuations in bauxite and aluminum prices could impact profitability.
• Export Constraints: Guinea’s constrained exports may affect supply chain dynamics.
• Maintenance Costs: Planned dry docking of the Ikamba terminal in Q1 2026 could incur additional costs.
• Trade Tariff Implications: Ongoing U.S.-China trade tensions may affect market conditions.

Metro Mining’s Q3 2025 earnings call reflects a balanced approach to managing operational efficiency and market challenges, positioning the company for sustained growth amid evolving industry dynamics.

Full transcript - Metro Mining (MMI) Q3 2025:

Simon, CEO/Managing Director, Metro Mining: Thanks, Peter. Thanks, everybody, for joining. I really appreciate your time and the support of Metro Mining. Yeah, so the quarterly report came out yesterday, and I just want to highlight a few areas. Look, I think from a production point of view, I think the production numbers were solid, and I think from my point of view, still, you know, there are still continuing opportunities to drive higher output. It’s particularly, we’re seeing the throughputs, the top-end throughputs really coming to bear now in terms of the ability we’re effectively able to produce at around about that sort of 8.5 million ton run rate. I mean, and if I reflect back, I think, you know, the journey over the last sort of three, three or four years, the team on site, after, you know, back then was 10,000 tons in a day was a good day.

Now they’re not satisfied if they’re not doing over 30,000 tons. We certainly saw in September, the first half of September, some really strong, consistent production over a couple of weeks. As always, we’re trying to balance all things. We’re trying to balance, I suppose, that output. We’re very focused on continuing to be a lean producer. We’re a remote site, and anything we do up there is relatively expensive. We’re trying to stay lean. If you bring a piece of equipment up there, it basically stays for its life. The cost of mobilization up and back means that that is effectively the outcome. We’re very judicious about that and about driving productivity. When you have a spurt like we had at September, you start to see other parts of the system where the bottlenecks are. That’s continuing focus for us to try to de-bottleneck the system.

2.25 probably, you know, still had some opportunity there. When I then look at the cash flow and how that occurred, the timing, two or three more days would have seen an additional almost $30 million flow into the cash generation for the quarter. By those sort of thin margins, you see receivables become cash. At the end of the quarter, we had one Newcastle MAX 201,000 tons sailed the following day on the 1st of October. We also had a second vessel, which had about 135,000 tons, which a couple more days to load, and then that was gone. Literally, we get paid a couple of days. It doesn’t matter whether it’s CIF or an FOB. We sell on letter of credit by sight, and that means that we get, once the bill of lading and the quality results come in, then we get paid pretty much straight away.

Five more days would have seen, and that, had we kind of driven our production slightly harder that quarter, that would have ended up in the cash flow. Those receipts are still there. We’re expecting another stronger quarter, I’m hoping, and we are driving for, still to try and meet the original guidance. That is certainly our internal intent, and we’ve made, we’re continuing and made and continuing to make changes to drive. An example of that is that one of the constraints we saw at the back end of September was that our stripping was getting overtaken by the mining. For example, we’ve moved to a 24/7 stripping, as a night shift, day shift, and night shift over the last two weeks to drive that productivity and tons higher. That’s just an example of changes we’re making.

Of course, I’m very conscious about continuing to try and take costs down. Costs did come down as we had flagged that they would. Still, again, more to go there. We are really driving, I think at this time of the year, we can certainly still see another few dollars coming off costs as we sort of try and head back to that sort of roughly around $20 per ton onto the ship. Now, the cash conversion or the cash generation and conversion was significantly affected by sales mix this quarter. I know I’ve had a few questions directly to me over the last sort of day or so about that. I just want to maybe make a bit more of a communication around those legacy contracts.

We announced in the middle of 2022 with our DFS that we had signed 3 million tons, 3 million dry tons, so just over 3.3 million wet tons of fixed-price contracts. If you go back and look at, we’re not, the pricing is commercial and confidence, but if you go back and look at the price for Australian bauxite in the middle of 2022 and you see that’s around about $43 or $44 per ton, and you then subtract the, I guess, the value in use or quality discount that we tend to see with Metro, $7 to $8 a ton, that’s going to give you a sense of the pricing of those contracts. We did negotiate some flexibility into those contracts, and we’ve been trying to utilize that flexibility. It doesn’t really make sense for us to be selling low-price contracts when the market price is high.

Obviously, if you have a quarter where the market price is very high, then we will maximize the number of cargoes we sell at the high price. Now, when prices are reducing, that is a time when we will consider to sell those contracts and/or ship those contracts. In addition, the flexibility that was built into those contracts really relied on us hitting certain expansion targets, and we basically hit those expansion targets this year. The customer had every right to start to demand that we deliver those contracts in place. About 38% of our volume in the last quarter was delivered under those contracts. They were largely FOB. There were four FOB cargoes and one CIF cargo. If you look at the chart on page four of the quarterly, you can see that the CIF and FOB prices, the gap has widened. That is not reflective of freight.

That is not reflective of penalties. That is not reflective of demurrage. It is reflective of the differential between the FOB and the CIF pricing in that sales mix. The previous quarter where we did not sell, as I said, we maximized the number of tons we were selling at the highest price that we’ve seen for the last five years in bauxite. We were maximizing the number of cargoes we were selling at that price. That kind of gap around about 11, you know, I think it was only $10 at the time, but again, around about $11 or $12 differential between CIF and FOB is about what you might see. We’ve got long-term freight contracts. They do not vary with the spot price, which at the moment they are significantly in the money with respect to the spot price of freight at the moment.

That has certainly been a good decision. We had planned to sell in the second half of the year about 1 million tons of legacy contracts and leave some for the beginning of next year. The way the market is and the way the customer is, our customer is demanding, we are going to sell to ship all of those contracts in this current season. There’s roughly another four cargoes, roughly about, sorry, four cargoes, roughly about 700,000 tons further to sell in the next quarter. We are also planning this year, as we had also flagged, to try and extend our seasons a little to move more into the January to March quarter. We are planning to operate this year up until about the third week of January, weather permitting. We will still be shipping some volume in January.

Like I said, despite that significant chunk of legacy fixed-price contracts, our margin was still extremely healthy at around $16 per ton. The cash generation for this quarter allowed us to pay down about $11.5 million of Aussie dollars of debt. On top of the about $2.5 million worth of interest, there was also a cash payment to the Queensland government under our bonding scheme. That is an environmental bond that smaller companies are forced to pay in cash. That depends on our amount of disturbed land versus our rehabbed land and the rates, etc., relate to that. That was, I guess, the big impacts. Not much capital spend, just over $1 million, as again, we flagged that there isn’t a lot of capital during the three months, the three quarters of full operations. I hope that does clarify a little bit these legacy contracts.

We have referenced that through the year. We have had some flexibility of what we do, and we are now saying that we will pretty much sell all of those or deliver onto those contracts through this year. Next year, we should be fully exposed to the market price. Now let’s talk a bit about the market price. Obviously, last quarter, the market, the contracts we sold under market price were down from that very high-priced quarter in the second quarter. We were coming off that peak of pricing that had occurred at the end of 2024. During this quarter, the bauxite prices have traded within a fairly narrow range. They’ve softened slightly. The balancing factors are that effectively the aluminum price, so the price for those customers that sell aluminum into the market, has come down quite significantly.

At the beginning of the quarter, it was around about 3,200 RMB per ton, whereas in the last few weeks, it’s been around 2,800 RMB per ton. That is a relatively significant, about a 15% drop. The good thing about the Chinese market is that it is quite elastic. We are seeing refinery capacity swing in and swing out. That does obviously affect bauxite demand. Most of those refineries that do swing though are internal or in the inner provinces of China. It does affect a little bit the demand for imported bauxite, but a lot of those refineries are also taking domestic bauxite. For the first time, and I flagged this in the report, we’re seeing the total share of aluminum made from domestic bauxite has reached about 75%.

You can see that, again, that trend of Chinese bauxite exiting the market is generally continuing and imported bauxite is continuing to take the share. Where are we with that? I mean, we’ve negotiated with a couple of customers already. We’ve got a little bit more negotiation to go. We’re going to see probably a very slight softening of the contract prices for the coming quarter. Those cargoes that we’re selling under the quarterly negotiated price may be a dollar or two on average lower than where they were in the last quarter. The exports out of Guinea are definitely lower. There are restrictions both from their normal, they’ve got quite an extended wet weather, monsoon season of about four months, and we’ve certainly seen an impact from that.

Additionally, about 50 million tons worth of capacity is currently under suspended in Guinea by the government in terms of their interpretation of the mining leases not being, the conditions of mining leases not being met. Of that suspensions, most of those leases have been withdrawn. There certainly is a, the last six or eight weeks of exports from Guinea have been actually barely any higher than the last couple of years. We’re certainly not seeing the continuation of the growth out of Guinea based on those issues. There is a bit of stock on the ground. The exports from Guinea in the first half were strong and there is enough stock on the ground. Customers are really more focused less on the ability to get the bauxite and more on the fact that they are not making much money out of aluminum. That aluminum price has continued to recover.

It’s still pretty strong. A lot of our customers are actually integrated aluminum producers and so they’re sort of seeing profits, stronger profits out of their metal production. That does help in quite a degree from a negotiating point of view. In the longer run, and I talk about this quite often, less in the quarterly but more in our investor and AGM presentations, and you should reference those if you can, the industry structure is continuing to move in favor of Metro Mining. We are continuing to drive next year our costs down and our production levels up. Our strategic target that we set in the DFS, the expansion DFS, was around about $30 per ton delivered into China, $30 per dry ton delivered into China. We’re on track for that. We still have more optimization to go.

At the same time, the right-hand side of the cost curve, which is dominated by Guinea, all of the activities that are happening in Guinea, whether it’s royalties, taxes, shipping constraints, licenses being canceled or suspended, transshipping constraints that they have on the river there, additional haul distances to access new parts of their ore bodies, and lower quality material generally is driving the cost of delivery higher. For example, at the moment, the spot price for freight from Guinea to China has gone up to about $30 per dry ton equivalent, so the same in the same terms as price. With Simandou Iron Ore project coming on in the back half of the year, some of you may have heard about shipping restrictions. China has imposed significant tariffs on U.S.-owned vessels coming into China. That’s going to create a two-speed market in the freight space.

That will obviously reduce the ability for freight companies to triangulate and reduce costs on their freight. All of these elements are pushing freight up and we have long-term fixed-price, fixed-fuel contracts with our providers who are not U.S.-based companies. All of these elements are, I think, placing our cost structure in a good space whilst the rest of the, certainly the right-hand side of the cost curve is rising. We believe that $65 to $70 is roughly where some of those Guinea producers start losing money. I think that’s going to be a relatively hard floor for pricing if we look forward to the next couple of years. I think that’s a very positive industry structure. I think there have been maybe some disappointing elements of the last quarter, some very positive elements from the last quarter.

I think nothing here changes my view about the long-term potential for Metro Mining in terms of our ability to produce, our ability to drive margins, and our ability to create, to drive cash flow out of this business. Indeed, management is constantly also looking at that longer term. There were a couple of things mentioned in the quarterly, particularly regarding our gaining of a project of regional significance. That may not sound like much, but that does allow us to now apply for water rights. As we’ve mentioned in the past, looking at the next stage of Metro Mining after the reserve life, about what beneficiation and what we might do, we might do there. In terms of dry screening, wet screening, that does give us more optionality.

Indeed, this ability for us to work in a risk-managed way during the wet season, we’ve had some clarifications and amendments to our environmental authorities, working very closely with the Department of Environment, very positive engagement with the Queensland Department there over that. We’ve now got all the clearances we need to manage in a risk, as I say, in a risk-assessed way, all of the production that we might be able to push out. I think, again, our expansion was designed to be more robust to weather, to both rain and to the way to the sea state. Ikamba has demonstrated its ability to operate in much higher swell conditions over the last 12 months, which has been, obviously was our target, and now that’s been proven. Our screening and mining processes have also had upgrades in that respect.

All of those things, I think, are boding well for the future and in terms of the next year or two. Again, I think nothing in the last quarter has changed my view on that. I guess that’s, I think, oh, there was one, maybe just one, I think there was a bit of some questions over. We did sell, we had one cargo during the quarter, which we are small. It was small, 40, just over 40,000 tons we sold to a domestic customer. That is a cement-grade customer. The demand, there is a use for bauxite in cement manufacture. Its aluminum and silica is valued in that space to create a pozzolanic sort of property within the concrete space. I think that is a growing market as steel slags and blast furnace slags sort of exit the market. That could well be a growing market.

We sold a small vessel, but it came out of our resource base, actually. The grade of it meant that we were able to pull that out of our resource rather than our reserve. The price of it was on par. The net back price of it was on par with our other sales. We get charged a lower royalty because it’s a domestic cargo. That was just, it’s not a material, not necessarily massively material, but I think it was a point of interest that I’ve had a couple of questions on. I think that’s probably what I wanted to cover in my upfront comments, Peter. Very happy to take questions.

Peter, Moderator/Investor Relations, MWR Communications: Thanks, Simon. You’re pretty comprehensive too, covering that. It’s good for us shareholders to listen to your interpretation and get some color around that. First question we have here is, would you be able to provide some clarity on CIF pricing shown in the quarterly results? Does this pricing reflect purely the non-legacy contract prices achieved, i.e., current market price received is in the low $60?

Simon, CEO/Managing Director, Metro Mining: Not quite. We have a number, we have CIF contracts and FOB. CIF is cost including freight. We had one legacy cargo shipped on a CIF basis during the quarter. There is some impact in that CIF price for that cargo, but the remainder of the cargoes in that CIF price were at the market price.

Peter, Moderator/Investor Relations, MWR Communications: Okay, following on with the revised production figure for the year reduced, will this mean that the KPI of the bonus performance scheme continued to be in play if the revised production figure is reached?

Simon, CEO/Managing Director, Metro Mining: As far as I’m aware, the original guidance remains the KPI that sits for basically management and the group, the senior teams within the organization. We still are driving very hard to try and meet that bottom end of guidance. So $6.5 million still sits within the range of the revised guidance. It’s prudent for us to review where that is. Obviously, we still have potential weather impacts that are coming down, that could come down the track on us. As I said, we delivered almost 2.3 million tons in the last quarter. We still think that 2.4 million is a target that we have a credible opportunity to meet. In fact, 2.5 million is our, you know, we have still a, if things go really well and the weather is kind to us, we still have an opportunity to deliver 2.5 million.

That’s the top end of guidance, the revised guidance at $6.6 million. It was prudent of us to also reflect on, I guess, the year-to-date output, which was roughly about 8% below what we had initially planned. Also, we had a four-day outage at the beginning of October. Subsequent to the end of the quarter, which we had to reflect on as well. Given that reflection, we had a long discussion with the board over the different scenarios, and therefore we felt it prudent to adjust the guidance. From a management perspective, our KPIs subject to the discretion of the board still remain on the original guidance.

Peter, Moderator/Investor Relations, MWR Communications: Thank you, Simon. Next question. What are the risks that the docking of the floating terminal in the down period in Q1 2026 will extend beyond April 1, 2026, and hamper meeting guidance for 2026?

Simon, CEO/Managing Director, Metro Mining: Yeah, that’s a good question. Maybe just I’ll take a step back. Look, obviously, Ikamba is critical to us. It’s been performing really well this year. We’ve still continued to tweak it to make sure that it’s, you know, absolutely suited to the different seasons that we go through. We go from obviously very wet material through to very dry material through the year. It’s got to cope with some very differing ore grades and ore qualities and ore physicals, I suppose. We do condition monitoring as most do, and we’ve picked up the start of some metal, you know, very fine metal fragments in the lubricant on the slew bearing of one of the cranes. We had expected that that was going to last at least through one more season.

We had planned to take Ikamba offshore to do a dry docking in the January to March period of 2027. Out of an abundance of caution, we’ve brought that forward. These vessels have to do that every five years in any case. We’re going to bring that forward. We’ll run Ikamba until our target for this year, weather permitting, is to keep running till around the third week of January. Once that production season has finished, we will tow. We’re under negotiation at the moment with different shipyards, but we will tow Ikamba to a shipyard, and we will undergo the maintenance of that slew bearing. We need large external cranes to be able to lift off the top of the crane. At the same time, we will do other maintenance in parallel.

We will look at the schedule of that to make sure that we minimize any of the other maintenance that we do to try and keep the schedule there. We’re roughly planning about a 10-week end-to-end maintenance period. That should have us back at the beginning of April. We still have the other transshipping, the floating crane, and our plan would be to recommence in March with the floating crane and with the crews that we have on board. We’ve got experience with that in the past. That is under discussion with our contractor. Whilst Ikamba might, look, there’s always a risk, whether it’s towage risk or schedule risk in a shipyard, we believe we’ve got the right kind of schedule, and we’ve been through that with the shipyards. We think that’s a relatively central estimate.

In the meantime, we still have another floating, we have another transshipper there to be able to do the service to service the vessels. We need to make that decision roughly a couple of weeks in advance. By the end of February, you know, we’ll know broadly where that’s currently sort of sitting, and we’ll be able to make the decision on the restart and so on. We do have that contingency in place.

Peter, Moderator/Investor Relations, MWR Communications: Simon, there was a lot pinned on the Ikamba. Is the operation of the Ikamba meeting expectations, exceeding expectations? Comment on how that’s the impact of the Ikamba on the operation.

Simon, CEO/Managing Director, Metro Mining: Yes, look, Ikamba is performing to our expectation. I mean, it’s not a new vessel. We made a deliberate decision to, and we could have just gone with a second floating crane. That would have, you know, really topped us out at about 7 million tons capacity. Ikamba provides a huge amount of upside to our production capability. It is a, you know, it was an 11 or 12-year-old vessel or whatever it was when we, when it arrived at Metro Mining. There are certain protocols that we have to keep to, and the slew, you know, we’ve been, we were purposely monitoring the slew bearing, and we’re slowly also going through upgrades, you know, on the vessel. Those of you who own sort of, you know, yachts or boats or ships or whatever know that marine vessels require a lot of attention, and we’re giving it that attention.

In terms of its performance, you know, we, it’s almost, I don’t want to say unlimited, but you know, the sorts of throughputs that obviously there were two vessels, I’ve mentioned this before, two sister vessels built at the same time. What we have seen with her sister vessel, what we’ve seen with Ikamba, you know, the vessel is actually, if we can feed it with the bauxite, you know, the upside to Ikamba’s capacity is really up to that 9 or 10 million tons by itself, right? That’s the effective capacity for Ikamba. Actually, the most important part is actually delivering the ore to it. We have had a lot of focus this year on our tug and barge cycle, and indeed, that is why we are continuing to evaluate larger barges.

That’s taking us a little bit longer than we had hoped with going through all of the kind of assessment processes with the regional harbour master, maritime safety, Queensland, the pilots, etc., to make sure that we’ve got a safe operation. Those bigger barges will also allow us to extract more capacity out of Ikamba because it was effectively designed for 10,000 to 15,000 ton barges, and our barges are a maximum of around 7,000 tons. The bigger barges we can get, the more capacity we get out of it. I think the weather resilience I’ve touched on, you can look at, you can look at that in other locations, but we had to prove it in our own location. Every location has a different, a different swell profile in terms of the strength of the swell, the period of the swell, the heights of the waves.

We have proven this year on several occasions the ability for Ikamba to continue to safely operate in much more difficult conditions. I would say the performance of Ikamba has been proven. I’m extremely pleased with it, and I think the team, the marine team, has done an excellent job. From nowhere a couple of years ago, we now have a very competent and capable marine department.

Peter, Moderator/Investor Relations, MWR Communications: Thanks, Simon. Next question. Is there a recourse from Metro Mining to the supplier who refurbished the barge loader that subsequently failed?

Simon, CEO/Managing Director, Metro Mining: Look, we’re continuing to do an investigation as to the root cause of this. We’re going to go right the way back to obviously scoping, quality assurance, the handover, all of those sort of things. We are going through that investigation now. All contracts have some recourse in them. This contract is no different, but as yet, we have not completed that investigation. As soon as we know what that looks like, we will take the appropriate action.

Peter, Moderator/Investor Relations, MWR Communications: Okay. The Metro environment, Simon, bauxite and aluminum in the current and new environment of tariffs from the U.S., with Metro’s product being shipped into China, how do you see the tariff environment affecting the outlook going forward for the bauxite and aluminum pricing?

Simon, CEO/Managing Director, Metro Mining: Yeah, that’s a very good question. I think that the tariff environment between China and the U.S. is an extremely high-profile issue with both of the governments there. They know how important each other is to each other in terms of global trade. There’s increasing evidence in the U.S. that the tariffs are causing harm to the U.S. economy in terms of the costs and inflation that’s coming through in the U.S. By the same token, the Chinese industry is very much exposed generally to that global trade, and the U.S. is part of that. What we’ve seen so far is both sides walking to the cliff edge and then stepping back in terms of their behaviors. We do understand there are continuing and intense discussions going on between the two groups. My recent trip to China, the Chinese economy itself is now enormous.

Its ability to domestically drive consumption across the board is also enormous. I don’t know, I’ve forgotten the stat actually, Peter, but people can look it up. In the last 12 months, there has been some phenomenal, I think it’s about, if you add up all of the solar panels that have been put in by the Western world over the last five years, China has installed those over the last 12 months, right? Similarly for wind turbines, I was on a five-hour journey on a train journey on my last trip. Once you got out of the city, almost every kilometer, you had row upon row of wind turbines and solar panels that you could see from the window of the train. There’s clearly been an enormous push internally. Both of those things are aluminum-intensive.

Of course, the grids, the poles and wires required to take those electrons from those renewable power generations to a transformer are also highly aluminum-intensive. What we’ve seen, and I saw an analysis from UBS saying that the aluminum demand out of China’s industry this year has continued to grow. Over the last six to nine months, the tariffs, I think, came in in February or something like that. Even with those, the demand for aluminum in China has continued to increase. I think that that, and this is why the aluminum price is continuing to be relatively strong. You’re still seeing, I think, a robust demand for the metal. As long as there’s a robust demand for the metal, then I think that gives space for the aluminum refining. There is obviously a bit of a shakeout going on in aluminum refining, which I referred to earlier.

The shakeout is trending in the right direction for Metro Mining and for imported bauxite, with inland refineries tending to close. That production is being picked up by coastal refineries that are being dedicated to imported bauxite. Many of those new refineries being built have the capability of using high-temperature refining technology, which is absolutely ideal. We have some of our product that does go into low-temperature refining, but the absolutely ideal way to treat Australian and Metro Mining bauxite is through a high-temperature refining capability. That is what’s being rolled out across the board, both in Guangxi, in the middle of China, the middle of the coast of China, up around Shandong and Hebei. We are also seeing it in Mongolia and around the top end of China as well. There is new aluminum refining capacity being built along the coast there to take imported bauxite.

Clearly, there is a bit of a shakeout here, with oversupply and undersupply occurring. That is impacting aluminum price, but there will be a sustainable outcome emerging, I think, through next year.

Peter, Moderator/Investor Relations, MWR Communications: Fair to say Asian demand remains very strong, consistently strong. Growth is still there, notwithstanding the U.S.

Simon, CEO/Managing Director, Metro Mining: Yeah, no, that’s right. I think we’re going to see about 100 million tons of aluminum production. That will result in, as we see, that share of imported continuing to grow. At the moment, it’s about 75% imported. That’s going to continue to grow to 80%, 85%, etc. over the next few years. What we’ll see then is a continued demand for imported bauxite. I think, as I said, the big growth out of Guinea has really sort of stopped. If you’re an incumbent supplier there, you will probably sort of survive. I don’t think people are going to be investing a lot more money in Guinea bauxite after what the government’s done. The Guinea government now has Simondou coming on. That’s a big cash cow for them in terms of taxes, royalties, their small share of that project.

That allows them to be a bit tougher on some of the poorer behavior that’s been occurring in the Guinea bauxite space. That’s exactly what we’re seeing at the moment.

Peter, Moderator/Investor Relations, MWR Communications: All right, Simon, we’ve exhausted our questions from the audience today. Thanks for your comprehensive coverage. I’ll reiterate to our audience, if anybody has some questions for Simon, please send them through to me at Peter at mwrcommunications.com.au, and I’ll make sure that Simon gets them and he’ll be keen to respond. Thank everybody for their attendance today. Simon, any message to leave at the end of this webinar?

Simon, CEO/Managing Director, Metro Mining: I think I’ll just go back to something I said earlier. I mean, look, I know markets are pretty short-term these days. The industry structure is continuing to drive in the right direction for us. Our expansion now, we’re seeing the rates come through. Our costs are still, there’s a little bit of work to do, but I’m still, we’re on track to meet our strategic target for costs next year, as I mentioned. Nothing over the last three months, or indeed what I’m seeing over the next three months, really gives me any concern over the ability for this project to be generating significant cash moving forward. From my point of view, we’re continuing to try to optimize, continuing to try and drive productivity, work hard with our customers in terms of getting the right kind of contracts and deal outcomes.

All of those things are trending in the right direction. Nothing I’ve seen in the last three months or indeed the current quarter gives me really any concern about the ability for this company to perform and then, for the valuation, once we show that consistency for the valuation to reflect the NPV of the project.

Peter, Moderator/Investor Relations, MWR Communications: Thank you, Simon. Thanks to our audience. This is being recorded. We’ll have a recorded version ready to send to everybody that attended and registered today, and we’ll make it available on the website too, I believe. Thank you for your time this morning.

Simon, CEO/Managing Director, Metro Mining: Will do. Great. Okay, thanks, Peter, and thanks everyone for your time.

Peter, Moderator/Investor Relations, MWR Communications: Thank you.

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