Chief Financial Officer Darren Charles. Before I hand it over to Phil and Darren to go through the presentation up on your screen, I'll just remind you that you can submit questions through the Q&A button at the bottom of your Zoom screen, and we'll get to those posted into the presentation. Phil, I'll hand it over to you. Thanks.
Excellent. Thanks very much, Simon, and thanks all for joining this morning. If we just jump through to the intro slide on the technology, Simon, I'm speaking to you all from Houston. As usual, I carry around my little flat pack of the technology with me, which is the old toilet roll. Getting a bit ragged now, but I just want to explain something a little more fully. One of the things that we talked about in the November annual general meeting was the advances we've made in the electrification part of our technology. What we used to do is talk about having electric elements around the outside of our tube or furnace, and also the ability to heat with traditional fossil fuels or burning waste or biomass.
In the AGM in November, we talked about the move for our electric to move from electric elements to directly electrify the tube. We are applying a low voltage, high current, and that truly allows us to do hybrid energy in terms of the furnace. We can switch from electrons through to fuel very quickly. This is particularly important, and I will talk about why that is important as we talk into some of the other advantages of the kiln other than just decarbonisation a bit further down the pack. Other than that, I might just quickly skid through to the financials, which are the important things that I would like Darren to cover off in terms of the first half year's performance, and then I will give an update along each project.
Thanks, Phil, and good morning, everyone. I'm in Sydney, so not quite in Houston, and it's my pleasure to chat through some of the key highlights of the first half, which kind of the key messages from my perspective are continued revenue growth, significant activity to reduce our costs, which I'll talk through, some CapEx spend primarily on the midstream project, which now is almost complete in terms of our capital contribution, and I'll touch about that, and then the cap raise that we did late last year and the SPP that was completed a few weeks ago that's really given us a strong cash runway to deliver on our strategies over the next 18 months. I might just flick to the next slide and talk in more detail about those key thematics.
Firstly, again, strong revenue growth, both in terms of in our water business, predominantly in the United States, which has delivered good growth, double-digit revenue growth at good margin, really strong growth in our Leilac services, engineering paid services revenue, which was up strongly in the first half. Importantly, we've got good line of sight for that revenue growth to continue into the second half as well, with contracts that we've secured and we're beginning to execute now. Really good signs in terms of revenue growth. On our cost side, as announced at the AGM, we mentioned that we were narrowing our focus on a few near-term commercial activities and opportunities. At the time, we mentioned that we'd completed a restructuring of the business.
That restructuring has taken our headcount from a top level. It got up to about 160 people around the middle of the year. We're now at about 117. There was some significant activity to refocus and restructure the business. As a result of that pivot, we've got some one-off costs in the first half. It's approximately $3 million of costs in the first half that won't be repeated going forward, and that's primarily in admin and research and development. That'll translate into about $6 million of annualized savings, and that's going to flow through into the accounts from January onwards. That's not reflected in the first half. In fact, obviously, the additional costs we've incurred for that restructure are reflected in the first half, but the savings that we've made will be reflected from here on out.
In terms of growing revenue streams and lowering our cost base, we've made some really good progress towards a sustainable financial basis for growth moving forward. I will just touch on that again: contribution from magnesia, contribution from Leilac, and even in terms of the sustainable processing business, really good contribution associated with our gain that we've reported on our activity with Pilbara Minerals and the midstream project. It's an $8.8 million gain in the P&L during the first half associated with that work. I might just slip to the next slide now, if I may. Again, in terms of the balance sheet, we had just about $36 million in the bank at 31st of December. We completed the share purchase plan a few weeks ago in February, so we've got another $2 million in addition to that.
We have really got the flexibility within our balance sheet to pursue this focused commercialisation strategy around our large addressable markets: cement and lime, obviously magnesia business, and iron and steel. We will touch upon—Phil will update the progress that we have made, the commercial progress that we have made across each of those projects in the slides down below. We have got this great cash runway to really help us execute on that strategy. Just finally, again, in the next slide from me then, thanks, Simon. Again, our focus here in terms of—again, obviously, we have spent money in the first half to restructure the business. In terms of the capital spend as well, there is $8.1 million that we are reporting there in terms of CapEx in the first half. The majority of that was our cash contribution to the midstream project.
That work is obviously, in terms of the heavy lifting, in terms of our capital contribution, it's almost complete. We've got just about AUD 2.5 million left between now and when that plant is completed, which is expected in the December quarter. We obviously announced the restart just a few weeks ago, last week, a week before last, and we benefited from the grant support from the WA government, which complemented the original support that we got from the federal government. There's a little bit of CapEx around some work within Leilac and also some expansion of production capacity in our magnesia business. Again, that's to support secured new contracts that we've won that we're going to start to be delivering on in the next—in fact, from next week.
In terms of capital and CapEx spend for the rest of this calendar year, at least, other than the two and a half and a little bit here and there, we're substantially complete. We've got a strong cash runway to execute on the strategy, and we're growing our revenues. Again, we've done the heavy lifting and the hard work to right-size, I guess, our business for the specific opportunities that we're pursuing that Phil will talk to over the course of the next few slides. Phil, I'll hand back to you.
Excellent. Thanks very much, Darren. Just a quick run through the focus series, the focus projects that we're working on, this format we started to introduce from the full year results and then again at the AGM. It takes each of the key projects that we're focusing on and puts it on a—we call it the blue slide. First of all, midstream demonstration plant, big news there, obviously, the Western Australian government coming in with AUD 15 million of support for this project. Just recently, obviously, both boards agreed to restart this project on the basis of that additional support from the Western Australian government. Both the federal and state government are supporting this project. There is no additional capital expenditure as a result of this grant required this year.
The capital expenditure, as Darren mentioned, about two and a half will be next financial year as this project moves through into commissioning and startup, which is conservatively placed in the December quarter. Very pleased to see this project back up and being constructed again. Just on the next slide, there's a few nice pics of what's happening. You can see the big tube there wrapped in our Calix logo that headed up to site last year. You can see some of the modules that have been laid out on site and ready for this construction phase. The project really can be moving quite quickly into the construction phase. As I mentioned before, conservatively targeting the December quarter for commissioning. Very pleased to see this project up and running again.
If we move to the next slide, with respect to ZESTY, ZESTY has continued to be worked on. We want to get to effectively a project start, and we've had the support of ARENA so far with respect to getting the FEED study done and all of the test work done. We've continued to do some test work, and we've continued to work on developing the project locale and these sorts of details. We continue to move forward with ZESTY. Obviously, the heavy lifting in terms of this particular project to get a 50,000 tonne per annum green line facility up and running, that heavy lifting will require some additional capital. As we've already mentioned, that capital is being sought into a subsidiary level in either financing or equity type arrangement. We continue to work on that, obviously, as well.
The capital raise that we completed in November certainly gives us plenty of runway to move ahead on that strategy. Let's get moving through the different projects. Direct air capture with Heirloom continues well. This particular project here is starting commencement of construction of the next plant with Heirloom this financial year. It was interesting that I think just in the last 24 hours, there was a $500,000 tonne CO2 deal done between Heirloom and United Airlines. Ultimately, the CO2 might be used to make synthetic aviation fuels from Heirloom's direct air capture facility. Just emphasising, the Heirloom projects, or projects I should say, are just revenue accretive for us. We get paid for engineering, and we'll get paid royalties when they build the plants. There's no capital required from us to continue to move through with this particular opportunity.
As we've mentioned before, Heirloom targeting over a billion tons of CO2 captured by the mid-2030s, which is at minimum $2 or $3 per tonne, actually, royalties, is a pretty nice business. I think I've said many times, if they get a hundredth of the way, there's still a fantastic opportunity with this business. This additional contract with United that's only just come through continues to reinforce that direct air capture is seen as very important even in the U.S. In fact, we'll talk a little bit about the U.S. and policy and those sorts of things. I'm here to sort of garner more information as well. I'll be a bit more full-bottled in a few weeks, but certainly we've got some thoughts now about where the U.S. is heading.
If we move to the next slide quickly, Project ZETA, this is our South Australian project for a lime facility with the CO2 to be used in conjunction with energy from Vast Solar and production of hydrogen from that facility by a company called Mabanaft to be making an e-methanol. E-methanol is a great precursor for synthetic aviation fuel as well. Moving ahead on a CO2 use case, especially here in Australia, is quite an exciting project. We are moving through a pre-feed phase, and the aim is to complete that by the end of this calendar year. The project's going very nicely, working well with both Vast and Mabanaft to continue to progress that project. Can I have the next one, please? Leilac-2 continues apace in Germany. I was just in Germany last week, visited Heidelberg. Site works have started. There has been some clearing.
have been some utilities that have started to be moved. It is very encouraging to see the Leilac-2 project start to move into that phase. Next slide down, Leilac- 3s. Obviously, this sort of links in a little bit with some of the stuff I was mentioning before about the U.S. and what is happening here. We are very pleased to announce two studies for a full-scale cement facility and a large lime facility here in the U.S. with support from the Department of Energy. Teton Cement and Mississippi Lime Company, two projects there. Those particular grants are still subject to review by the new administration here under the new president. Hopefully, we are going to see a successful outcome of that review over the course of the next month or two.
Suffice to say, obviously, there's a lot that's been thrown up in the air with the new administration. One of the things that we'll talk about with respect to the U.S. is there's a lot of support for CO2 capture, apart from which the bipartisan support from the Republican side, a lot of these projects in Republican states creating jobs in Republican states and CO2 being an important material, not just for fuels, but also for enhanced oil recovery. It is one of those areas that we think is probably least at risk from the recent sort of administrative change and a bit of the color and movement, I guess, that's been happening over here from a policy perspective. If we can just move down to the next slide, please. Lastly, magnesia, as Darren mentioned, growing quite nicely. The business continues to grow quite nicely.
Big contract here in Australia with Unitywater , one of the largest users of MHL. That contract is moving into its operational phase. It'd be great to see the revenue start to be generated here in Australia. Of course, the U.S. continues to grow nicely for us as well. There are seasonal factors, of course, that sort of come to play in the US. Certainly, we're looking forward to a nice growth this coming half year in revenues from the U.S. business as well. All going very well in magnesium. If we can keep moving through, this summarises all of the slides I've just spoken about in one. I won't go through this any more detail, but this is the sort of overview of what we're focusing on. Anything not on here, we're not focusing on.
We are very focused on delivering these projects. There's only a couple of them requiring capital. At a point in time, the ZESTY project will need some capital. At a point in time, we're into heavy lifting. The Leilac-2 project will need a bit of capital. Other than that, and down into 2026-2027, there's ZETA project as well to progress. The others, none. PLS, as Darren said, we're nearly there. Another couple of million, maybe $2.5 million to go into there. The Heirloom projects, all just revenue accredited for us. Lots happening and lots we're trying to achieve across Leilac, sustainable processing, and magnesia. Let's move to the next slide. In terms of why I'm here is on the right-hand side. Decarb Connect is in Houston tomorrow and the next day.
We are a finalist for the NextGen Awards here, and we're a finalist for that particular aspect of the technology that I mentioned right at the top of this presentation. I'll talk a bit more about that shortly. Obviously, at the last AGM, I had just come back from Baku with one COP29 award, Net Zero Industry Award for the ZESTY technology. You can see me there with the ministers from Australia and from Finland. That was very nice to win that award there as well. Recognition for the technology is really starting to get us on the international stage, which is great to see. Let's keep moving. We'll keep moving past sustainability. All these slides are available, by the way, up on the ASX platform. Certainly, move in and have a good read through when you can.
Just in terms of policy support, we've just tried to outline what support there is still in place for decarbonisation and a lot of the things that we're trying to achieve with our projects here. You can still see Europe moving ahead with its EU ETS. USA, the 45Q tax credit system that supports CCUS. That system was enhanced under the original Trump administration. We count it as fairly low risk that that's going to be impacted by the new administration here in the U.S. Australia continues to move forward with the safeguard mechanism. A lot of initiatives just recently announced, including the current movement, I guess, around the South Australian Whyalla Steelworks and the opportunities that might come from there with the announcement of the fund with respect to green iron here in Australia.
China moving ahead with their emissions trading scheme for industries such as cement and steel. Interestingly, India, Japan, Brazil also moving ahead on emissions trading scheme type approaches to dealing with carbon. The world has not completely flipped. Policy and a lot of stakeholder sentiment are still there for decarbonisation and to continue to move through with these efforts. We feel that these policy, I guess, tailwinds continue despite the fact that there's sort of a bit of a been a bit of a pause in investment and the pace, I guess, of decarbonisation given inflationary pressures and policy and administrative changes. The backbone is still there. The regulatory backbone is still there to drive these changes. Okay. If we can move to the next slide.
Just when I, at the top of the hour, I covered off a new aspect of the technology that we've developed and announced at the AGM, which was the hybrid technology. What we are aiming to do there is enable an industrial process that can draw a lot of megawatts of power to be able to be switched on and off quickly. This is the blue colored box on the right here. Grid stabilisation is a really interesting development for our technology and is unique for our technology. Big cement plants, big aluminum plants, big iron and steel, the ability to switch between electrons and standard fuels or waste fuels could really be a very interesting and valuable feature of the technology. We are developing that as quick as we can. The other columns outline some of those other areas where we feel, forget decarbonisation.
It's a bloody good piece of kit. It's a damn good kiln. It can process fines. It enables more efficient use of energy given the nature of the electrification that we're developing. Lower maintenance, lower OpEx. We think it's just a damn good kiln. Regardless of decarbonisation, we're going to be really trumpeting the benefits of the technology and pursuing those. The CO2 and the decarbonisation is the cherry on top as and when those things are required by our customers. We firmly believe there's a significant business case beyond just decarbonisation here.
Okay. Let's keep moving. I think just in terms of quick summary and outlook, certainly, as Darren covered off, very pleased to see revenues increasing over the half. The cost-based reduction is no insignificant, I guess, achievement.
It allows us to continue to pursue all of those projects that I outlined with about a AUD 6 million reduced cost base per annum moving forward. With respect to the runway that gives us to continue to pursue those projects, as we mentioned, it is at least 18 months. The balance sheet to support that runway is there. Commercialisation, we continue to push hard to get the lithium plant up and running with PLS, as we mentioned. That project restart has been really pleasing news for us and for Pilbara Minerals. Iron and steel and cement and lime, projects that I outlined there continue to move ahead. The commercial milestones we are ticking off. We have at last been able to talk about a couple of other plays in the cement and lime space in Mississippi Lime and Teton Cement, and there will be more to come.
Similarly with iron and steel. If we have an outlook, I guess, for this half year, definitely further revenue growth is what we're looking at. We see these cost savings take effect, which will give us the runway to pursue all of those projects. Also the subsidiary capital strategies that we've talked about many times before. We come from a position of strength in those negotiations. We're going to continue to focus on those commercial milestones, converting the opportunities in all of these pipelines to more license arrangements. A lot on as always, but I'll pause there to allow some questions. I hand it back to you, Simon.
Perfect. Thanks, Phil. Just a reminder, if you did want to ask a question, the Q&A button at the bottom of your screen. First question, is the new German government as committed to decarbonisation as the old one? Do you see any regulatory risk in Europe?
Yeah, look, the new German government, we're only just getting our heads around. Certainly, Germany and Europe have continued to push ahead and ratify the policy objectives that I'd outlined a couple of slides up. We haven't seen anyone step away or talk about stepping away from those commitments. The key issues that the German administration got elected on were things like inflation, things like immigration and refugees. I still think there's a very strong impetus to do decarbonisation in Germany. It's likely there's going to have to be sort of coalitions, sort of coalitions formed with parties that are very strong on this area.
There is certainly no blank sort of tablet there to rewrite the rules with respect to what the EU are trying to do or what Germany is trying to do around decarbonisation. Early days, that is my initial impression, though.
Perfect. Thanks, Phil. Next question. You stated that current cash runway is 18 months . Is that a conservative estimate?
Yes. Perfect. Punching through them.
What is the level of interest on investment at the subsidiary level? Can we get some comfort that they will materialise at some point?
Yeah, a lot of interest. What I think I have described before, counterparties who typically invest in this space, and certainly Carbon Direct came into the Leilac Group in 2021. Those sort of impact funds or strategics as well, people, sort of firms that are in the industry who invest in potentially new technologies to assist them.
A lot of those funds are very cashed up, but are sitting and waiting. They're sitting and waiting to see which way, I guess, the new administration heads in the U.S. They're sitting and waiting to see interest rates come under control. I think in both of those cases, I think the administration in the U.S. perhaps won't be quite as disruptive as people think. I think on interest rates, I think we're starting to see a little bit of relief certainly come through in Australia, but also globally as well. While it's been tough over the last 12-18 months, in fact, if you have a look at investments into decarbonisation or clean technologies, I think 2024 was the lowest year since, I think, about 2020. Certainly, 2025, we're starting to see a little bit more optimism come into the market.
If 2025 isn't the year, 2026 could be the year. We've got the runway to make sure that we're there to get those projects funded. We've got a good 18-month runway to do that. Yeah, confidence remains high and certainly higher than 2024, where it was particularly tough.
Right. You used to show the number of opportunities moving through the Leilac pipeline. This hasn't appeared for over 12 months now. Previously gave shareholders transparency of the interest in the new technology. Where does the pipeline stand now? Any reason for dropping?
Yeah. Certainly, no reason for dropping other than there were people sort of saying there's too many slides up there. There's too many things that you're putting out there. I think the pipeline stands at about 82 projects.
Certainly, the Teton and the Mississippi Lime are the ones that we can talk about there and having moved through into that sort of pre-feed stage. Yeah, there's no other reason that we've dropped that other than the fact that we're trying to compress everything into something as simple as possible. We've talked about Leilac-2s and Leilac-3s in the blue sort of slides instead. I might just make a couple more comments there. I think in terms of the question, one of the things that we were talking about when we last illustrated that slide was this desire to move the opportunities in the pipeline down towards pre-feed, feed, etc. That's really what's happening.
Leilac's revenue growth, both in the first half and what we've got line of sight to, is as a result of that work moving the opportunities down the pipeline. Leilac is not only generating revenues from its transactions with Heirloom, but it has we've got a couple of other customers in the U.S. there that we've talked about. There's customers in the Middle East and in Asia. Leilac is generating revenues now, and it's making great strides towards that sort of financially sustainable basis to grow, which again makes it appealing from an investment perspective. I think a lot of work is happening to move those opportunities through the pipeline, and that's translating into financial performance that we're reporting as well. We can certainly resurrect the slide if it's a crowd favourite. I've got no issue with that. I love showing that slide, but anyway.
We'll revert back to the score board at some other point. Just another question around ZESTY. Completed the ARENA-supported FEED study well over 18 months ago with a number of players seeming to be moving forward, engaged in the industry with assessing the technology. Any update there?
Yeah. Really what we're targeting this financial year is to get to that sort of key financing decision to move forward. A lot of work is happening behind the scenes on that. Certainly, I look forward to updating shareholders as to how that's progressing as and when I can. There are numerous sites that are being looked at, discussions taking place. Yeah, it's one of those areas that I'm very excited about, Simon, and I do look forward to updating shareholders when I can. I guess that's about all I can say.
Perfect. That says it all.
Another question just with regards to Heidelberg. They're running with different technologies. What's the end game plan of Heidelberg on carbon capture, trialing the different technologies? evoZero looks well advanced.
evoZero . I might have to check what that I haven't even heard of evoZero . I think, oh, actually, no, I have. evoZero is just the brand name for their cement. Yeah. What's happened there is they're getting their Norcem plant up and running in Norway. That's 400,000 tons of CO2 separation, about four Leilac-2s. It's based upon amines. That's been about 80% funded by the Norwegian government. A very, very about EUR 400 million just for the facility itself. Very expensive.
What they're going to say is that 40% of the clinker that comes out of that plant has effectively had the CO2 captured from it. It is effectively sort of a net zero. 40% of the production of that facility, they're going to call evoZero . It is a brand name for low-emission cement. We've always said Heidelberg are making bets on different technologies, so I wouldn't fight with them. A means one bet. I think they know it's going to be bloody expensive. It is one of those that A means have been around for 60 years, and their plant's just starting up. The first cement plant at scale to use it is just starting up in Norway, as I mentioned. It is going to be very interesting to see how that performs. The other technology they're looking at is Cryocap. Sorry, is Oxyfuel.
Oxyfuel is separating air into oxygen and nitrogen, just using the oxygen. They have done a little bit of early work on plasma as well. There are a few different technologies that Heidelberg are looking at. I would not fight with them. Secondly, Leilac, why is Leilac in amongst it all? Because it has the potential to be the cheapest. We are not separating a gas from a gas. We are not using a big chemical plant. We are an important part of Heidelberg's strategy. Of course, there are plenty of other cement and lime companies we are talking to as well. As I mentioned, 82 projects in the pipeline. We can talk about Mississippi Lime. We can talk about Teton now. Most cement companies have several different strategies. As I say, most of them would be in terms of, I guess, cement companies outside of China.
Yeah, we've certainly engaged just about every single one of them. So Leilac is well known and is a very viable option for these companies.
Thanks, Phil. What opportunities are there for collaboration with Australian cement manufacturers?
Yeah. We published an article in World Cement, I think it was six months ago, on the work we're doing with Boral. That particular piece of work was on calcine clays, but we've been working with Boral for a number of years now. The other, obviously, cement company here is Adbri, who also we've worked with. Both of those companies are opportunities for us here in Australia, obviously, that we continue to work on. I mean, in the scale of things, I think there are three cement plants in Australia and 5,000 globally. Certainly, Australia is a nice place to get projects up.
We have got Project ZETA up, as I mentioned, in South Australia, starting to move. Really, the biggest opportunities are overseas. Most of the focus that we have is around Europe and potential opportunities in the States. As I say, we have got Project ZETA up and running here in Australia, so that is moving ahead nicely.
Right. Thanks, Phil. Just with regards to Heidelberg in Germany, when do you actually break dirt there?
Dirt has been broken. Site works have commenced. Utilities are starting to be rerouted. That is happening now.
Perfect. What is the outlook for the magnesium business in terms of new customers, and what proportion will it contribute to the revenue in the next 12 to 18 months?
Magnesium will continue to be our major source of revenue over the course of the next 12 to 18 months.
Leilac is obviously nicely growing its engineering revenues, but magnesium will continue to be, I guess, the majority in the time period we're talking about here. Yeah, the prospects for the growth continue to be quite robust in the States. With respect to the plants that were built in Texas and Wisconsin, there are some very big opportunities there that we're going after. Even in the areas where we have the other four manufacturing facilities, there are enormous opportunities still there. These are opportunities that are not necessarily, I guess, trying to take off other magnesium hydroxide producers. These are greenfield opportunities, as I call them, in caustic replacement.
Yeah, I think we normally look at the U.S. market as about $100 million sort of market size in magnesium hydroxide, and then probably multiples of that in terms of caustic replacement.
When you look at the size of our US business, it's sort of tender to sort of 13% or so of the current opportunity and a much smaller percent of the potential opportunity once you look at caustic as well. Yeah, plenty of upside in the US business.
Perfect. Question that's commonly come up just around Cemex was announced to the market a couple of years ago. With regards to a license, any news or where do things stand with Cemex?
Yep. Things stand very well with Cemex. They're a part of the Leilac-2 project. There's lots of ongoing discussion with Cemex. I look forward to updating as to when we might be able to get something with Cemex across the line.
Yeah, it's a little bit frustrating for all, I guess, that Cemex wanted to sort of announce projects they were working on with us. Rest assured, we're working hard to negotiate and get a good deal in place so that as and when Cemex sign a license agreement, it's on good terms for Leilac. Given the rest of the pipeline there, given these other companies are starting to move forward now, Cemex isn't the be-all and end-all. Perhaps some of these other companies starting to move will give Cemex a bit of a hurry up as well if they want to get the best deal. Anyway, we'll play that one. We'll play that one as we should with commercial robustness.
Thanks, Phil. A few more final questions just on the midstream project moving into production next calendar year.
Can you remind us of the revenue share for the JV and how is marketing the new product progressing through Pilbara?
Yeah. Yeah. Good question. The revenue share is 45% Calix and 55% Pilbara Minerals. The product is being marketed through Pilbara Minerals and through their contacts there. Just as the core technology, I guess, is being marketed by us to other potential spodumene players. That is how we have sort of split the marketing activities. We are selling the tech. They are moving the phosphate sold. Pilbara is in charge of that. Obviously, the lithium markets continue to be somewhat depressed at the moment. What is important here is the chemical margin. What is achievable in terms of the lithium phosphate price versus the spodumene, I guess, sort of typical spodumene price.
Chemical margins are a bit compressed at the moment, but if they return to historical levels, then yeah, effectively, the plant does pretty well. We have a bit of time, a bit of water to go under the bridge, and we'll see how the lithium market unfolds over the course of the next sort of nine months or so. It's going to be interesting to see how well this lithium phosphate salt does in the market.
Right. Thanks, Phil. Three final questions. Just a question around the impact that the Trump administration is having on Calix and its U.S. operations.
Yeah. I think I mentioned that the DOE grants that were achieved and are obviously under review currently. We think it's in a fairly low-risk area with respect to the focus of the administration.
As I mentioned, it's in the projects and as well as direct air capture in Heirloom as well. Bipartisan support for these types of projects always has been. The 45Q was enhanced under the first Trump administration. I think it's in the low-risk sort of categories to impact, I guess, what we're doing with Heirloom and also with respect to the DOE grants. Low to medium that those are going to be impacted other than the time and the review process they're going through. With respect to our business in the States around decarbonisation, it's very much at the lower risk end of the curve. If we were looking to get big subsidies for hydrogen or these sorts of things in the States, I think that'd be something that'd be much higher up the risk curve.
I think a lot of the policy that's come through is pulling sort of favorable loans from big renewables and big renewable infrastructure projects, which, again, aren't directly affecting us at all. The only other thing that the Trump administration obviously is things like tariffs. We do get some raw material from Canada for our efforts, for our operations in the U.S. A Canadian tariff is one thing that we're watching carefully and obviously working very closely with our Canadian suppliers and their lobbyists. Also, we've got our own lobbyists as well to make sure that these sorts of things aren't impacted by some sort of blanket approach. Magnesium is a critical material, not only in ag and water treatment, but also in ultimately defense and aerospace.
Again, we believe that despite the bluster and the color of movement of the figurehead, I think there are those in the bureaucracy that are very sensible and work through these things sensibly. Yeah, it's a watch point, there's no doubt, but I do not believe it's a high risk to our business and what we're trying to achieve there.
Thanks, Phil. Two final questions. Just a question around recently bought more shares during the SPP and disappointed to see the stock now trading below that price. What's happening and what are you doing about it?
Yeah, I guess we're all disappointed about that. There's no doubt. All of the board and directors bought into the SPP, and we've all bought into shares as well over many years. The current share price is extremely disappointing for us.
While it's not something that we can directly influence, we believe the best thing we can do is to concentrate on the things that we're doing, which is increasing our revenues, decreasing our costs, increasing our focus, and achieving the commercialisation steps that we're able to achieve and pursuing the equity strategies that we've talked about before to bring equity into the subsidiaries to pursue those particular projects there. In doing that and executing on that, I think that's the best way for the company to ultimately be recognised, hopefully, by the share market. Again, obviously, there are macro factors that are at play. A lot of money exited exchange-traded funds around ESG. High interest rates have smashed renewable funds. We have been placed in that basket. Achieving all of that, achieving all the things that I noted is going to be really important for us.
You would have seen a slide in there on the other bits of the value proposition for the tech. We've hoisted a big spinnaker and caught the tailwinds of decarbonisation beautifully. When those tailwinds are perceived to have lightened, there are certain other aspects of the tech that we're now going to be making sure people understand and value, not the least of which is the opportunity in things like load balancing, where grid instability and these sorts of things can be helped by big industrial sinks for electrons, such as cement plants and iron and steel plants that use our technology. Really tapping into those other aspects of the value of the tech is going to be important for us, Simon, and make us more resilient, I guess, to sentiment around decarbonisation.
Right. That concludes the Q&A segment. Phil, I might just hand it back to you, closing remarks.
Fantastic. Thanks very much, Simon. Again, thanks all for your interest in Calix and support. As I mentioned at the top, the things that we're going to be focusing on, growing our revenues, keeping our costs down, and realising the benefits of the cost-cutting elements that we've done, pursue our equity strategy.
Now that we've got the runway, really make sure we get the best deals to get money into pursuing ZESTY, into pursuing the Leilac business, and really ticking off those commercial milestones, making sure that across each of those different lines of business, we're showing commercial progress despite the fact that decarbonisation may be not flavor of the month right now, but showing commercial project despite that because of the other value proposition, I guess the broader value proposition that the technology brings is going to be important for us. They're the four things we're really going to focus on this year.
Right. Thanks, Phil. Thanks, Darren. Thanks all for attending.