Morning, everyone. Thanks for joining the half year results for Jubilee Metals Group. We have Leon Coetzer, the CEO, Pedja Kovacevic, CFO, and Ollie Oliveira, the Chairman. For the purpose of this call, we are recording it for transcript purposes. Leon will go through an overview of the results out this morning. The presentation's also available on the website. Then, we welcome questions throughout the presentation. Clearly just press the raise hand function, and we will unmute you. Over to you, Leon.
Well, excellent. Thank you and welcome, everybody. Thank you for taking the time for us to go through these results. The results, as we discussed, I think in February when we all met, really is broken up into two segments, one South Africa, one Zambia. The results reflect South Africa as a company performing well, performing to expectation and target and in certain instances, exceeding target. Also suggests that there's still tremendous growth opportunity in South Africa. We often speak only of Zambia. If you look at the results breakdown in South Africa, despite the various inflationary pressures as the new world we live in, South Africa's costs are tightly under control. Came in roughly around about $600 per PGM ounce produced.
All the ounces produced stem from our own operations, which as we discussed last in February and last year, on the back of the Inyoni facility being expanded, it allows us now to produce only or most of our ounces from this expanded footprint. We are looking to potentially dip into our contract with Northam Platinum, where we have access to that concentrator to accelerate further production because we have significant stock as Jubilee PGM side, and we look to access that in the coming months before year close. In general, ounces out of 18,000 and above compared to 15,000 ounces previously from Inyoni area, which is good. Chrome operations are performing well. Yes, we've suffered some power outages at our chrome operations, more so than at our PGM operations.
Our chrome operations, of course, are distributed, and they feed to our central PGM facility. Our PGM facility is protected behind, which currently is owned by Samancor's power offtake, and as a critical power user, we are protected from what they call load shedding in South Africa at our PGM operations. Our chrome operations are exposed, and it's for that reason that we start with the implementation of power backup systems at our chrome facilities. We in any event, took the time over the past period to increase the buffer between our chrome operations and our PGM operations to ensure that even if we had to suffer a prolonged power outage at our chrome operations, that won't impact the output from our PGM facility.
The chrome operations maintain on track to beat their 1.2 million tons of chrome concentrate for the full- year period. Also at the moment, post this reporting period, benefiting from a chrome price that's appreciated significantly. A chrome price, where for the previous period, was on average $260 per ton of chrome concentrate produced. Today it's more than $300 per ton of chrome concentrate. Roughly 30% of what we produce as chrome concentrate is our own material we sell, and the rest is under our protected margin toll agreements from various suppliers. One can expect that the chrome contribution to subsidize further the cost to produce a PGM ounce will increase in the coming period, as we benefit from this higher chrome price in the market.
It comes at a very important time when, of course, PGMs have pulled back on prices in the market, at our current cost per ounce. We are still, of course, quite a strong cash flow generating assets in South Africa. It assists with the chrome increasing its offset to a softening PGM price, in the market. When we look at our South African business, we have a number of growth opportunities we are pursuing. The first one, that we have prioritized is expanding into what we call the Eastern Limb, which is an area we haven't as yet hold an operational footprint.
What we've done over the period is to increase further our access to materials within this region, and we've been successful to secure an area where we can in fact construct our footprint, which will first be our chrome beneficiation facilities, 'cause that has to come first. It already is profitable and that then produces the PGM material for our PGM plant. Our chrome plant, we are estimating will commence construction within this year. It's dependent on final approval from the authorities to commence, and we've allowed a very conservative timeline to secure this approval, from our team. That's why we indicated to commence construction in the fourth quarter of this year. We, of course, will be pressing to pull that forward as much as we can.
We are fortunate also that most of the long lead items have been secured for this plant so that we're not exposed to the current supply chain challenges most construction projects are facing. If all bodes well, we'll be well progressed with that Eastern Limb footprint within this year as we commence that construction. We have access to a large material within the Eastern Limb. It's mostly also the LG6 material, which is important because it has a higher value PGM basket content than what we predominantly process here in the Western Limb, which is mostly the MG reefs in it. If we move into Zambia, of course, we have faced our challenges, we explained that to the market early in February. Most of which we've now overcome, fortunately.
We were forced to increase our scope in Zambia to adopt and inherit infrastructure under our wing, rather than being reliant on the authorities to provide us with infrastructure. The first of these was water, where we took the decision to, instead of being reliant on the authorities to provide us water, to instead construct and own our own water infrastructure in Zambia, which was implemented in December and allowed us to now feed ourselves with uninterrupted water supply. It was not driven by a lack of water, but instead driven by a infrastructure that was failing in Zambia. The power issues in Zambia, which was well documented and spoken of, that also has been resolved.
It's been resolved by we and the government coming to an agreement on the upgrading of the power infrastructure that serves the region we operate in, as well as elevating our status in Zambia as a strategic power user to ensure we are protected from power cuts or general power load shedding in the country. That was agreed and implemented towards the end of February, which resulted in us having not only an upgraded power infrastructure now, although it's belated, when we had targeted to commence the project, but it also ensures that we have more power, additional power that's been allocated to our operating footprint. It's been allocated to us because of the number of people we employ in Zambia, and it's given to us as an incentive to not lose the momentum on our expansion plans in Zambia.
That has meant that where we initially had to stop the commissioning or the ramping up of our operations in Zambia, that we could recommence the ramping up of our operations in Zambia with power and water fully secured. We're currently running roughly at about 80%-85% of throughput, as we speak, and we will ramp up to the 100%, or we target to ramp up to the 100% within early April, to then have a stable production profile. We have included in our forecast a potential shutdown of our Roan concentrator or stage shutdown of our Roan concentrator to allow for the expansion of that concentrator, as we discussed in our February announcement and, alluded to it again in this announcement.
With Zambia, we had to update and refine our expansion in Zambia, on the back of the lessons learned in the southern refining strategy, which always the southern refining strategy was going to be an example or a demonstration of how we implement a copper and a cobalt recovery circuit by processing waste or perceived waste, as we call it, because most people class it as waste, although there's still value in it. One of the key lessons that has come out of the past six or eight months has been to ensure that we have a far closer alignment with what the supported infrastructure in Zambia is, rather than what is presented as the scheduled or planned infrastructure in Zambia.
That has meant that for our expansion into the north, we refined our footprint to ensure our footprint overlaps with where this infrastructure will be supported going forward or in the near term. In Zambia, they've got about a two year period during which they'll look to expand their power infrastructure, which is likely to extend to a three year period. Within that period, one has to ensure that your expansion footprint overlaps with what government will be supporting. With that in mind, it offered us the opportunity to simplify our expansion. Where initially we had up to 3-4 concentrators, greenfields facilities, we had to construct to support the refining footprint that could be collapsed into larger, centralized concentrating footprints. The first being our current Roan project, which is in Ndola, which we now can expand because of the additional water and power allocation we've received.
The second one is within the Kitwe area, where we hold all of that waste and tailings in the area, and it's within the heartbeat of the copper belt in Zambia. These two footprints become our centralized footprints, which then produces the concentrated material for a refinery. These centralized footprints are served by distributed upgrade facilities. They're quite small and light on power and easily made to fit within the current infrastructure. If you can imagine, our current plan is to hold two larger concentrators centralized because of the additional power allocated within this infrastructure under our new status of power, and that then feeds a new refinery. As alluded to in the announcement and in previous discussions in our announcements, we are very well far progressed in securing our refinery footprint.
There has been certain challenges in completing that transaction that we are targeting, driven by the current change in regime within Zambia, which brings in with it certain new requirements, specifically around taxation and historical taxation of companies to ensure that they, in fact, are compliant to the law within Zambia. We're quite confident that these will be resolved. Between myself and Pedja on the call, we are leading those discussions to have it addressed. We have received tremendous support from government to assist where they can to resolve this matter. In fact, the President of Zambia was quite outspoken a couple of weeks back on his Copperbelt tour, presenting without, of course, discussing with us the fact that our transaction should be and would be completed before this financial period that Jubilee is in. That's a statement he's made.
We certainly are pushing as hard as we can to have the security of our northern refining footprint secured, because with that, then we immediately inherit a brownfields refinery footprint, much like in the south where we acquired the refinery from Glencore and repurposed it for its current duty, and that would be our similar target in the north, where we are fortunate that such refineries are in fact available in Zambia. From the actual numbers perspective, what you won't see in our numbers is that we basically have suffered a period that has delayed the implementation of our project. We had to roll back the clock, on our implementation of the southern copper refinery to overcome this power and water period where we pumped capital into addressing this shortfall in infrastructure availability and capacity, for our projects.
We're now on track where we would have, should have been by October, November last year. We are there currently now, where our plants are running at 80%-85% of their capacity with stable water and stable power, as we now ramp that up to completion. In the meantime, in the copper or in the southern copper strategy, we've implemented the cobalt circuit. We specifically brought that into Sable for a number of reasons. Critically also was to ensure that from a technical and a practical perspective, that we are able to demonstrate our ability to take waste that contains cobalt into cobalt sellable product and to make the European export specification. It is a critical task to go through because there's no reference of such a facility happening or achieving that, within Zambia.
That's partly one of the reasons why we had to incorporate it into our southern copper to ensure that we have ironed out any technical issues that might or could lie ahead for us. The second part is, of course, it adds massive capability to our southern copper refining footprint, where we are able to swing capacity. It's a very flexible design we've implemented to allow us to allocate that capacity either to copper or dedicate it to cobalt. That additional capacity we've installed at Sable. At the moment, of course, cobalt prices have pulled back sharply, and we are allocating more of that capacity back to copper, but maintaining a production profile of cobalt to first and foremost also ensure that our off-takers of our product can see that we have an ability to produce our cobalt consistently at the right grade.
Copper prices are doing well. During this period, it's holding up quite nicely within the various challenges the world is facing. We've seen cobalt, it's a very differently traded metal than copper, but over the past week and past two weeks, we've seen a significant increase in interest in cobalt coming back into the market from China, which was completely absent during February and January of this year. That bodes well for a recovering demand in cobalt, which is being noticed already. Now, just the little interest shown last week in cobalt already had an immediate impact on the cobalt price. Looking forward in Zambia, for us, there's a couple of key targets we now have to achieve to demonstrate to the market that the value of copper and cobalt in our portfolio is real.
The first and foremost target we've set to ourselves is to ensure that the target for Roan to deliver its tonnage of copper to our Sable refinery is met month in and month out. Roan has, as we said in the announcement, a target of roughly 550 tons of copper. It's got an ability to go up to 700 tons of copper per month. Roan, we've set a target of 550 to reach that as its immediate target. Run there steadily before we press up higher into Sable. Of course, we'll do that as soon as we are able to. As soon as we have the confidence of delivering the 550 on a monthly basis, we'll step that up to its full capacity at Roan.
On the cobalt side, for now, we have a capacity of 75 tons of equivalent metal. That's roughly 230-odd tons, or 225-odd tons of cobalt hydroxide, which is the product we make. By end of May, that capacity is pushed up quite significantly because we are fully then separating the cobalt circuit out of the copper circuit by May, so that the cobalt circuit can scale up and scale down independent of the copper throughput at Sable. That would mean that we roughly have the ability to push the cobalt metal content per month up to north of 120 tons or 125 tons of cobalt metal from that facility alone, which is a tremendous earnings potential.
Being able to scale that up as the market recovers is a huge tool to have at Sable for the company. When we look towards the North, two immediate key challenges or rather milestones that we are chasing down. The first is to complete the transaction to secure our refining footprint. It's a critical transaction because it defines your capacities for your concentrators and the specification we design these concentrators to. It's the anchor of the North, your refinery. The second key milestone is to commence with the expansion of Roan to utilize this extra power and water being allocated to us to earlier adopt the North into the production profile of Roan. That's the summary, high-level summary of the results.
I thought I'd rather open more time for questions and answers, as you might have them. I think I'll hand over back to Cathy to see if there's any questions, we can address them and discuss it in greater detail. Thank you.
Thanks, Leon. Our first question from James Birch. We'll just open up his line. James, go ahead.
Can you hear me, guys?
We can.
Hi, James.
Yes, go ahead.
Hi, Leon. How are you? Just a quick question on the production of the copper and cobalt. You're talking about 550 from sort of June onwards, hopefully. Can you still produce the 75 tons of cobalt on top of the 550? Is that a concurrent process or you're talking about being able to switch from one to the other. I'm just trying to work out what's the total.
Yeah. They are co-current. At the moment, we can't go beyond the 75 without taking from copper.
Yeah.
At the moment, the 550 and 75 is co-current. Post-May, we are able to separate it out, so that we can step up the cobalt independent of the copper. They are co-current as we speak.
Okay. What's your operating cost on copper? I expect it's gonna drop down as your volume increases. Would that be correct?
Yes, very much correct. You'll see in our current numbers our cost to produce a copper ton is reflective of the fact that you're running a refinery overhead, but not utilizing the full capacity of that refinery. You'll see in our numbers that we run roughly about 5,800 tons-5,500 tons to make a copper unit.
Where do you think that comes down to at a higher capacity early on when you start from May onwards?
Yeah, James. I mean, it's a number that one can only relate to what's in the market. If you look at typically in refinery costs, one would expect your total all-in cost for a unit of copper at a 10,000-ton per annum refinery, which is generally the market, that would come down to between $4,800-$5,200 a ton, depending on acid. Acid prices is your key driver. And acid prices have been extremely volatile over the past eight months. It seemed to have stabilized now at a price that is more reflective of history, roughly about $130 a ton of acid. That then speaks to what is in the public domain.
If you look at a 10,000 ton producer, they run roughly between $485-$5,200 a ton of.
Perfect. Have you got any handle on your cobalt costs yet?
Why we've not brought out a lot of detail on the cobalt is because it's so novel to-
Yeah
to make cobalt out of cobalt waste, that we've spoken. If you look at what's in the market at the moment, a lot of companies, including even DRC, Democratic Republic of Congo companies, are coming out at a cost to produce a ton of metal equivalent in cobalt, comes out roughly about $15,000-$16,000 a ton. That's what's in the market at the moment, generally the cost to produce a ton of cobalt.
You think you'll be similar to that? You, you'll be hopeful of being similar to that?
Oh, absolutely, yeah.
Okay. Brilliant. Thank you very much for your time, Leon.
Absolutely, James.
We did have another couple of questions from the London number. Let's just open that line.
Actually, while we do that,
Hello, can you hear me?
We can now, Richard. Go ahead.
Yeah, great. Okay. Yeah, morning, Richard Hatch from Berenberg. Morning, Leon Coetzer. Few questions. Just on the refinery in the north, what's your kind of expectation or thought process around the potential timeframe for when you can get that locked down, please?
Yeah, Richard, it's a tough question because it's not in our hands, it's within government. As we've spoken previously, there is a current issue between the ZRA, which is the tax authority in Zambia and previous owners to resolve what in fact that number is. The government has indicated to us that they gave us their full commitment, that it'll be addressed head-on. I can only quote what the president himself has spoken, that they have committed to have it re-resolved within April, that this challenge will be resolved or a resolution would be reached. If that is acceptable to the current owners, it means we can then complete the transaction. We're on transactional documentation negotiation levels.
We've concluded a value of this facility, and this is the only item that has prevented us from completing the transaction. If the president stays true to his word, he speaks of the month of April that it can be concluded.
Okay, very helpful. Thanks. Then just on 2023 CapEx, can you just give us a bit of steer as to how much you're expecting to spend on CapEx for fiscal 2023, please?
What falls into the capital for fiscal 2023 would be, if the refinery transaction is successful, it will commence with that capital on that refinery, as well as commence with the expansion of our Roan concentrator. Those two items will be within the capital numbers going forward. We haven't yet brought out the capital to expand Roan because it's so hot off the press, the engineers are working overtime to complete it. If you look at the fact that we came out to the market and then told them that it cost us $24 million-$28 million to build Roan, one would expect the capital to expand Roan should be less than half of that because you're only expanding, you're not building a new facility.
The capital on the refinery, we've not come out into the market on what that capital number will be, but it is likely to be in a similar order, as what we spent at Sable. At Sable, we spent in the order of $15 million-$17 million totally, because that is a refurbishment example of a refinery. That gives you sort of order of magnitudes of numbers to commence the capital expenditure of the north within this period.
Okay, thank.
Richard, just to add to that, the East Limb, as published in the RNS this morning, the early chrome concentrator development and then towards the end of the year.
Okay, thanks. Sustaining CapEx, can you give us a guidance to sustaining CapEx for Zambia and South Africa?
Sustaining CapEx on South Africa is, as the numbers show, quite limited. We have no real expansions planned or upgrades planned in South Africa's capital budget for this year. It's really only the eastern limb that we look at to target that. Sustaining capital on PGM facilities is quite traditional. It's roughly about 7% of revenue of sustaining CapEx of PGM, so that we are not a mining company, so we could probably halve that for a facility of our magnitude in South Africa. We have no particular item that we are pursuing in South Africa. It's com-
Okay.
The whole expansion is completed.
A question on the eastern limb. GBP 5.5 million to get you to upgrade the chrome. Is there additional CapEx that you need for the PGM element to it? Is there any upfront capital you've got to pay to secure the facility? Or how should we think about the funding?
Yeah.
of that?
Sure, Rich. Yes, there's no upfront capital to be paid. We are building it from scratch, the facility, the chrome facility. That capital number we've given guidance on is to complete the implementation of the chrome facility. On the PGM facility, for now, if one assumes we build a brand-new facility and that we are not successful to secure a brownfields footprint, the greenfields footprint would be comparable to a Roan facility because Roan concentrator is of similar size. You're speaking of roughly $20-$25 million to complete a PGM facility, if we are to build a greenfields.
Okay. Timeframe on when you will know whether you can get the brownfield, the existing facility?
What we've got guided in the numbers was that post, when we commence on the chrome facility, which is the fourth quarter of this year, we at that time will also bring out whether we're building new or whether we are brownfields, on the PGM side. That is basically allowing for our engineers to complete their study between green and brownfields, as well as comparing environmental and acquisition cost of brownfields versus building new.
Okay.
I think one thing to take into account, Richard, is as soon as you finish your chrome concentrating capacity, then obviously you can start producing and then also enriching your material on the eastern side, even prior to PGM facility kicking in. So there's some intermediate positive cash flow effects into that as well.
Okay. Thank you. All right, fine. Okay. If you elect to buy the existing facility or build, right? That's the decision gate. You'll work that out by the end of the year.
Yeah, very much so, Richard, because between now and then we are testing the market on delivery of equipment. We are testing the market on the whole supply chain, whether it's easy. At the moment, the brownfields facility that we have targeted are. It's quite a large facility, and it's not perfectly matched to what we are aiming for the east. But we can adopt it if we have to. And we are just waiting for various feedback from the engineers and the authorities on the supply chain. Our preference would be to build new, but if the supply chain educates us differently, then of course brownfields is your only option to overcome the supply chain challenges.
Okay. How long would it take you to build, if you were to build new? Would it be 6 months-12 months, something like that?
Yes, exactly. In the announcement, we state that it would run if we commence construction at the same time as on the chrome side. The chrome plant is 6 months. The PGM plant to commissioning included is 14 months.
Okay, very helpful. Last one is just on the PGM guidance. The 8,000 ounces of additional material that you could potentially do if you work with your partnerships. How was any of that included in the H1 number? What should we be including it in our numbers or is it prudent just to not include that in our numbers?
None of those numbers have been included, Richard, at all. If we are to progress with that, today we're in March, so really you're only likely, logically, if we were to take that decision and prepare that facility, we'd only be able to take possibly up to two months of this period on that. That facility, as we stated last, has a capacity of 2,500 ounces per month. That gives you a sense of its capacity and its potential impact on numbers. Was that clear?
Yeah. Helpful. Yeah, it is. Yeah. Okay. All right. Thanks very much for your time. Much appreciated.
Thanks. Our next question is from Tim Freeborn. Tim, if you unmute yourself.
Hi. Where would the feedstock for the expanded Roan come from? Is that local southern or is that stuff you'll be having to truck in from the north?
No. The local feedstock for Roan, the logical feedstock is actually part of one of the northern facilities. It literally is just on the south and north of Ndola. It's not very far. It comes from our Luanshya project, which is 15 km away from Roan. Roan, Luanshya was classed as a northern project purely because of the road traveling through the town of Ndola, and how difficult it is to truck through Ndola, and that's why we class that as part of the north. The Government has approved a bypass road that we may make use of, which is a road that then connects that facility to Roan.
Right. It's just after all the infrastructure issues you've already encountered. I mean, they need to build a new road before this would be feasible, would they?
No, it's an existing road, that is at the moment available. It was previously only classed for public use.
Right. Oh, I mean, okay. Sorry. Could a truck actually go make that journey?
Yes. Yes. Pretty much so.
Right. The 250 increment extra ton, cost per ton, I think you indicated you thought the trucking cost would be. That's because it's only 15 km. Is that $250 a ton? Does that stand or has that moved around? Obviously, of course, with fuel prices.
No, that's quite correct in your cost assumption. When you're speaking of cost per ton of copper cathode produced, I assume.
Just in terms of the logistics in the north, if you're gonna have 2 concentrators up there, how far are they from the refinery that you actually hope to get hold of?
It'll be very, very close. If you look at the north, everything is actually quite closely located. It's very condensed because if you unpack Zambia's history, all these companies used to be actually a single entity before it got chopped up during privatization and nationalization. They are all located within a 25 km of one another. If you only want to take into account the road infrastructure, it's roughly 35 km at its furthest point down to about 4 km at its closest point. It's a very condensed area around Kitwe, Mufulira and the whole Chambishi area. It's a very, very condensed area.
Okay. Thanks a lot.
Thanks, Tim. Our next question is from Kieron Hodgson of Panmure Gordon. Kieron, your line-
Kieron, unmute yourself.
Yeah. Morning, guys. Just a couple of really simple questions from me, so excuse them. Just the first one, can you just remind me what your budgeted commodity prices are for 2023? Just in relation to that, just looking at some of your key commodity prices and the relationships there, obviously, there are some significant declines year- to- date. If we were to extrapolate those prices for the rest of the year, can you give me a sense of how that impacts your capital allocation decisions, the flexibility that you have within your working capital, and financial structure, and obviously, any changes to the expected sources of capital for these expansion projects, please.
Yeah. No, excellent. I wish I had an answer to everything, in the future there, Kieron. When one looks at the metal prices, you are 100%, you know, we looked this morning in our South African review. If you look at the PGM basket prices, you look at a metal like palladium, exactly a year ago, it was trading at $2,300 an ounce. It today is trading at $1,320 an ounce. Palladium is a significant component of your basket price evaluation. If you look at rhodium, it traded at $18,000 an ounce exactly a year ago. Today, it traded $8,100 an ounce.
It meant that our basket price for our package of metals, the realized basket price, that's after, you know, costs and various other aspects from your refinery. Our realized basket value is coming in at roughly $1,250 an ounce. It gives you a sense of the margin that we make all-in costs for those PGMs. It still is a very profitable venture. The positive of that is that chrome prices have gone from $265 to nearly $310 a ton for this period. The impact of chrome on our operations are bigger or are larger on the PGM side as a by-product, and that has a nice buffering effect.
Our effective cost of the PGM ounce drops down probably with a couple of dollars an ounce. It's a nice buffering effect coming through there. From South Africa, very profitable, still justifiably to be spending capital on the South African business. If you look forward into the PGM market, the PGM market has been hit heavily by the current view on economies because PGM is still strongly related to car sales, and car sales is the economic strength of the world. Because of that strong relationship, PGMs suffer immediately if there is a view that the world might not recover as fast as expected. Our direct exposure into China shows us that there are green shoots that are yet to be reflected in many markets' numbers, that's come through just in the last three weeks.
What we've seen in chrome, what we've seen in the feedback we're getting from our offtakers in the ferrochrome and stainless steel industry. What we've seen on the PGM side in China is about green shoots and recovery, which we are strongly hoping will reflect. Because if you want to look at your PGM price going forward, it will probably be one of the first metals along with cobalt to react to a more positive outlook in China. If one looks forward into our PGM basket price, we have budgeted for now flat at $1,250 an ounce basket price. Although many of our major companies, the larger companies, are projecting an appreciating PGM price through the last two quarters of this calendar year, we have not brought that into the budget.
If you step back into Zambia, copper is still facing its reality. It is under a severe supply chain problem with the availability to actually mine and bring the copper into market. Of course, we play our small part in that, as well as we've delayed our commissioning of our projects. Copper demand has been strong. We've been offered fixed copper pricing, as well, because of the bullishness in the copper price at the moment. We are maintaining our budget price of roughly $8,500 per ton. Cobalt is a tough one to call. We in fact have discounted cobalt completely out of our numbers. And it's really only the last 10 days where we've seen interest coming back into cobalt from China.
They had stopped buying cobalt since last year in November, basically only a trickle feeding cobalt. It's reflected in the prices. Suddenly, prices came down sharply. It's only the last week where we saw a turnaround of that starting to happen as people expect in April for the construction cycle in China to again commence. With that comes the cobalt demand for China. For cobalt, for now, I'm not, and we as a group are not, have not budgeted in cobalt into our numbers for now because cobalt is such a difficult traded market. It's not really easy to track the LME price to actually cobalt prices offered. It's very much driven on the demand per order coming through in the cobalt market.
We've kept cobalt for now out of our numbers until we are more clear. Yes, we are fortunate in that we are able to produce cobalt from waste. It's not from a mining project, so that protects us better within this cobalt market. But we are also able to turn up our cobalt production rapidly with no refinery. We are able to be reactive to cobalt because we can react so quickly. We're just not like a mining project where we have to plan months ahead to upscale or downscale our cobalt operations. On capital expenditure focus, we have a long-term bullish view on copper. We certainly aren't delaying copper expansion plans.
In fact, we are putting far more energy behind it, especially now that we are more confident on our power and our water infrastructure being allocated to us. Equally in South Africa, we are bullish on our chrome PGM mixed basket because the two are disjointed in their market fundamentals. The one does not follow the other. In fact, quite often, as we've shown yet again, the two follow opposite to one another, which is very helpful in a combined package market. We certainly will be pushing extremely hard to accelerate our Eastern expansion to bring it forward.
We've been very conservative on timelines, not to disappoint, on our Eastern limb project, but certainly if the government was to come back within this week and approve the accelerated construction of our eastern limb, we are ready to commence on that construction if that was to be allowed. Designs are done. We are literally all ready to press that button. I hope that answers you, Kieron.
Yes. Yeah.
Should I touch on your working capital and external sources of funding? On the working capital, our receivables typically zero to 60 days, really short cycles. In terms of funding availability, driven by production plans, fully covered on chrome. We published on the Absa facility, that's what it's used for. On both copper and cobalt, also funded depending on the production plans as we increase those ones in place already. In terms of external funding, depending on the Roan's ability to produce during the expansion, more or less senior debt and the rest covered from our cash and project level funding.
Okay. Yeah. That pretty much covers most of it. Okay, guys. Thank you very much.
I think we've got one last question from Paul Smith. Paul, go ahead.
Oh, Paul.
Morning, Leon. Morning, Pedja. Just a couple of things really on Sable. The first thing is that you mentioned in the operational review and in today's update about the production of cobalt and how you were going to produce cobalt, and now you're not. It's obviously a very flexible and quick moving situation. I just wondered what cobalt price you will switch copper to cobalt. And secondly, about copper production at Sable, you state that Roan can provide around about 6,000 tons per year at the moment. I just wondered when you'll get to capacity and how much third-party copper material there is available to put into the Sable plant.
Yeah. Excellent question, Paul. Just clarity on cobalt and copper. We are producing cobalt as we speak. We haven't stopped cobalt, we just have not pushed to increase the cobalt production. At the moment, cobalt, for us, our internal target we've set is for us when cobalt starts breaching $37-$38 in that range per ton in the market, it shows that the upward momentum of cobalt is real, that the increased demand in cobalt is real, not just a once-off purchase order that came through last week in cobalt. That upward momentum, I think one will see quite a few cobalt companies looking to upscale their cobalt. A lot of companies over the past quarter have pulled back completely on cobalt, just it's too tough for them to mine and refine at the current cobalt prices, for us.
On copper output, our third parties, third party ore in Zambia will step up during April, May, going forward. The reason for that actually is driven by the weather in Zambia, the fact that they're going out of their severe raining season. I mean, southern Zambia has a rainy season. It's monsoon rain. It's not just a wet day in Zambia. That's coming to an end now in March as they move into their dry season. That then sees the third party ore increase because towards Tom's question earlier, it allows the infrastructure is more reliable on the roads to get movement of this material.
The third-party component, as we said in our numbers, adds roughly about 150-some tons per month, even up to 200 tons per month of copper from third-party sources into Sable. Sable has tremendous capacity to refine copper. On your question on Roan, our first target now is to get to that 550, to between 550 and even up to 600 tons per month before we step up to its ultimate capacity, as we said earlier, 700 tons-800 tons of copper per month, and that we have left out of this financial period to ensure that we have fully stress-tested the refinery, the concentrator and the infrastructure that's now been upgraded by government for us.
Paul, I'll just add that obviously the decision on cobalt is also driven by copper price. If the copper price goes up, it still is putting questions on which one is better for us to produce. It's tested at all times.
Yeah. Understood. Thank you both. Thanks.
Thanks so much, everyone. That concludes the call. As I said, the presentation is available on the website, as well.