My name is Kathleen Conlon, and I'm the Chair of Pilbara Minerals. Before we commence the presentations and the formal business of the meeting, for those of you in the room, please refer to the visual on the screen for evacuation procedures should there be an evacuation event. I would now like to invite Nick Abraham to provide a welcome to country.
Thank you, Kathleen. [Foreign language] Kaiawunji, Nanjutmurugini, Nanjunatwarungi. Hello and welcome. I'm happy to see you all this afternoon. Also happy to be speaking with you this afternoon. As mentioned, my name is Nick Abraham, and my family connections are Abraham, Bennell, Humphrey Hulme, Mipi, Warrel, Nettle, Harris. And we're connected to many parts of Ngunnawal Country: Whadjuk, which is the Whadjuk we're sitting and standing on here today, but also to Ewit, which is to the north of Whadjuk, also connected to Balardong, which is to the east of Whadjuk , to Wilman, which is to the southeast of Whadjuk, to Pinjarup, which is to the south of Whadjuk , and Wadandi, which is to the south of Pinjarup .
I must also take this opportunity to acknowledge my Kodramat Ngunyis, my wife and in-laws, Bolton's and Woods , and they're also connected into Wilman, which is southeast of Whadjuk , Kaenang, which is south of Wiilman, Goring, which is southeast of Kaenang, and Mennang, which is south of Goring, which goes all the way down to Albany. I must also take this opportunity just to acknowledge the other parts of the Ngunnawal Nation: Amigu, which is just north of Ewit, Ngagingaki, which is east of Balarong, Wadjori, which is east of Wilman, Ngunga, which is south southeast of Goring, which goes all the way down towards Esperance, and Bibbulmun , which is further down south. However, Bibbulmun has a flow throughout Gunna Country, and you may hear Gunna people talking interchangeably between Bibbulmun and Gunna. That's because of the ancient and still current connection.
Nijin Ngungabwoji, Nijin Ngungawarungi, Koronalokumakngaru, Ngungamuru, Ngungaburia, Koronadomuri, Koronjini, Ngunikjuni.[Foreign language] Just to acknowledge the ancient land and the ancient language, but also my elders past, present, and emerging. Also acknowledge each and every one of you here today and online just to give a bit of an opportunity for me to tell you a bit of history of this country that you may or may not be aware of. Now, the story I'm going to tell you about goes back at least 65,000+ years. Kathleen's only giving me about five minutes to tell you that story. Hopefully you would walk with me on this journey. The story I'm telling you about is not about blame. It is not about shame. It is about understanding of this country we're sitting on today. To do that, I've got to bring you into this space.
I've got to bring you into this space by asking you three personal questions. Now, because they're personal questions, nobody else needs to know the answer other than budja, country, and world, the sky. So when you answer these questions, you answer them as loud as you can in your head. Budja will hear you, and the world will hear you, but nobody else. Do we understand?
Yes.
Lovely. First question is as loud as you can in your head. Just let the budja and the world know your name. We all good with that one?
Yes.
Lovely. Next question. Just let the budja and the world know who's your family and where you're from. You may have connections here. You may have connections with other parts of WA, other parts of Australia, or even other parts of the world. Just let the budja and the world know who's your mob and where you're from. Depending how much you know your extended family, that may take a while, so I'm going to leave you with that. Now, the third question, the answer to the third question can only come from your core, your heart, and only you can answer that question. That question is, what's important to you? I'm going to leave you with that. I want to take you on this journey. [Foreign language]Ngunna Nguratma, Dimam Mama, Ngungaburia, Korokora.
We Gunna people were given our knowledge through the oral tradition as passed down from our grandmothers, grandfathers, our mums, our dads, and the Gunna bosses from long, long ago. When they're telling us these ancient stories, they're telling us in a very simplistic form. That very simplistic form takes us all the way through our life. Basically what they're telling us is, [Foreign language]Minuljuni, use your eyes to see. [Foreign language] Dwankni, use your ears to listen. [Foreign language] Kaatkort, courage. Use your head and your eye to understand. Understand these stories we're telling you about your country, your culture, people, values, responsibilities, and purpose. They've broken it up in a couple of key little elements that hopefully will help you understand. The very first thing they teach us about is our moral. Moral is family. Mum, dad, nan, pop, uncle, aunties, brothers, sisters.
All the extended families and the different levels of relationships and responsibilities to each and every one of those, including the [Foreign language] and Kodramat and Ngunugis, the wife and in-laws, because they're a very important part of our social fabric. That was also one of our laws. One of our laws of who we could and could not marry. We could not marry close bloodlines. We had to keep our genetics strong. We still have a system today still functioning where we still maintain our strong genetics.
Next, your fathers taught us about our culture. What is culture? I'm going to give you a couple of definitions of what I think culture is. You may agree, and you may even add your own. For me, culture is about values. Culture is also about language. Through that language, it gives you your identity, your belonging, your beliefs, and your spirituality.
Next, your fathers taught us about our carthage. Now, carthage is our knowledge system where the role people understood and knew the relationship between the sun, the stars, the moon, the plants, and the animals, the waterways and the seasons, and how we live sustainably in those environments. Next, your fathers taught us about our court win. Court is the heart. Win is the spirit.
Bring them together, it's our well-being. The role people taught us about our foods, our medicines, our sites, our ceremonies, our social interactions, responsibilities, and purpose. They knew we were out of balance physically and emotionally, out of connecting with all those different elements to bring us back into balance. That was a health system. The old people taught us that these key elements are connected to our budja, our land.
Because they knew if we look after country, country would look after us. This one represents our buddhas, our elders, because it was their responsibility to build up on this system and make sure that our laws and our customs are never broken. That system was functioning for many thousands of generations where the sun would always rise in the east and set in the west. The moon would eventually rise in the east and set in the west. When our people pass and they leave this place, they go to the next part of the dreaming, a place called Karnup, which is over the west where the sun sets. The only time they ever return is in our dreams and our subconscious to give us guidance and support in maintaining our laws and customs.
In this part of country, which is the Muru country, which is to the north of the river, and all the Muru people lived around here. At that time, [Yellowkonga] was the leader. Some strangers came down to Durban, Yurigan, and they came to the Muru people around about here. When they came, the Muru people and[Foreign language] Yellowkonga could not make sense of who they were because they were pale, they looked different, they spoke different, and they behaved differently. They came from that way. [Foreign language] [Yellowkonga], the Muru people's only conclusion was if they came from that way and they are pale, they must be our juggar ancestor spirits people returning. What do we do? They had no template in how to deal with them. They could understand when they came in our dreams and our subconscious, but here they were in physical form.
Yellowkonga, the Muru people done the only thing that they thought was humanly possible for them. If these are our juggar ancestor spirits people returning, they look tired, they look worn, and they look weathered from the long journey. We must look after them. What the Muru people done is given up their camps all the way along here, and they moved to another camp that we know now as Lake Munga, which was originally Gullah. They left the juggar ancestor spirits people here to rest, recover, and return. They rested, they recovered. Did they return? No, they stayed. They stayed and they saw their system and they ignored their system in the imposing of laws and values onto this land. Immediately everything that was important to us, well, all of a sudden was illegal and devalued.
Immediately we had disruptions to our budja and our elders and our government system. We had disruptions to our moral and our families. We had disruptions to our culture and our language. We had disruptions to our knowledge system for why we looked after this land. All of a sudden, we had no say in how our land was being divvied up. We had disruptions to our court woman and our health system. Of course, we could not get access to our sites for our foods, our medicines, our ceremonies. Because all of a sudden, we were trespassing on Crown land and private property. These key things disconnected us from our budja. That is where my community is today, picking up the pieces of this disconnection and this disruption.
Now, I just want to acknowledge that this disconnection and disruption happened in many parts of the world long before it arrived here and long after it arrived here. In fact, it's happening in the world today. You only have to look at the morning and evening news to see where this disruption and disconnection is happening in many parts of the world today. I can only talk about the impacts of this disconnection and disruption out of my country, culture, people, values, responsibilities, and purpose. I'm not wearing a [Foreign language] Nguninala or a Ngungakidni Ngunin. I'm not [Foreign language] Nguninala or Ngunakidni. Despite all this recent disruption, my people's spirits are still here. Despite all this recent disruption, our spirit stories are still here. Despite all this disruption, we are still here. Throughout this disruption, many others have come.
My ancestors would be angry with me if I did not tell the real history of this country that many Western Australians may not be aware of. I just want to say, [Foreign language] Mamun, Nguninalaga, Abora, Ranjini, just let the good spirits look after us and keep us safe while we're here and having this meeting and send you safely back home. Also to help us to open our eyes, our ears, our head, and our heart to understand and appreciate what was, what is, but my people are still living and have of what could be. What could be is dependent by the responsibility that each and every one of us have. Because we've been challenged, no matter where we come from. We've been challenged politically, economically, socially, today as technically and environmentally. We all have one commonality that we all share.
We all share the commonality of humanity and its survival. Hopefully we can walk on that journey together. We look forward to walking with you on that journey into the future for future generations. Again, [Foreign language] Mamun, Nguninalaga, Abora, Ranjini, just let the good spirits look after you and keep you safe and have a beautiful meeting here today. Get business that you need to be done, done. [Foreign language] Abora, Ranjini, I look forward to seeing you in the future. Thank you.
Thank you, Nick, for the Welcome to Country. I acknowledge the traditional owners of the land on which we meet, Whadjuk Noongar people, and pay respect to the elders past and present. I appreciate your history lesson and the thoughtfulness with which you gave it to us. We also acknowledge the owners of the land on which the Pilgangoora operation is located, the Nyamal and the Kariyarra people. Welcome to the Pilbara Minerals 2025 annual general meeting. It is so wonderful to see so many of you here in Perth. For those joining us online, thank you for being part of today's meeting. I acknowledge my fellow non-executive directors here with me, Sally-Anne Lamont, Nick Cernotta, Steve Scudamore, Miriam Stanborough, and our Managing Director and CEO, Dale Henderson, and our Company Secretary, Danielle Webber.
I'd also like to acknowledge the PLS executive leadership team led by Dale and here with us today, Chief Operating Officer Brett McFadgen, Chief People and Sustainability Officer Sandra McInnes, Chief Development Officer John Stanning, Project Developer Director Paul Laybourne, and Interim Chief Financial Officer Flavio Garofalo.
They will all be available to take any questions because I know a lot of our shareholders have very detailed questions at the end of the meeting. To our shareholders, thank you. Your continued support is greatly appreciated and is recognized as a strength of our business. Many of our shareholders have been on the journey with us since the early days, and we thank you for your support in the good and in the challenging times, all of which can happen in the course of a few months.
I will now deliver a brief address, which will be followed by a presentation by Dale. Finally, we'll move to the formal business of the meeting and provide an opportunity for questions. It's a privilege to deliver my second address to shareholders as the Chairman of PLS. When I joined the company in early 2024, I was drawn to its long-term potential, disciplined approach to growth, and its reputation for delivering on its commitments. What I've seen since has only deepened my confidence in the business, the leadership team, and the strategic direction we're pursuing. Just last month, the board visited Pilbara Ngurra once again, witnessing the exceptional scale and quality of the operation. I remain impressed with the professionalism, talent, and adaptability of our people. Our site visits are more than symbolic.
They give us a direct insight into how our strategy, culture, and most importantly, safety is being lived day- to- day. These opportunities are invaluable, and we see this as a key part of our governing role. As part of the FY 2025 highlights, our safety-first value continued to guide everything that we did in FY 2025. It helped us navigate major expansion projects safely and meet our safety targets. Safety means more than just physical safety. It is about mental and emotional well-being, which is why we launched our safe and respectful behaviors portal and rolled out our mentally healthy workplace strategy, reinforcing our commitment to psychosocial safety. Our strategy remains very much focused on long-term value creation, underpinned by disciplined capital allocation and proactive risk management.
The board maintains a strong ethos of creating value through optionality, allowing us to respond rapidly when necessary, especially important in a market where lithium prices can shift and the landscape is rapidly evolving. The past year continued to bring periods of volatility as expected in a developing industry. Our response was both strategic and pragmatic.
The decision to consolidate Pilbara Ngurra to the P850 operating model by placing the Ngungaju plant into care and maintenance reflected thoughtful operational judgment and disciplined capital stewardship. Importantly, our investment program remained on track. We delivered two major expansion projects at Pilbara Ngurra, the P680 and the P1000, on time and within budget, significantly increasing our nameplate capacity and operational efficiency.
Despite the need to reduce our cost base and conserve capital, we continue to make sensible investments in growth projects to ensure that we can move quickly as the market shifts to capture additional value for our shareholders. FY 2025 also marked a step change in our international footprint. The acquisition of Latin Resources and the Colina project in Brazil was a strategic move that aligned with our long-term goals to diversify our revenue base, broaden market access, and secure high-quality lithium assets.
We also made meaningful progress with our chemical strategy. Our joint venture with POSCO in South Korea has now commenced commercial production, and we continue a joint feasibility study with Ganfeng for another potential downstream lithium conversion facility. We also progressed our midstream demonstration plant with all construction works remaining on track for completion this quarter.
I'm pleased to share that we made significant progress in our sustainability journey in FY 2025. We achieved a major milestone of the completion of stage one of our Pilbara Ngurra power strategy, and this is now delivering lower emissions, lower cost energy to our operations. A real tangible step towards our goal of net zero scope one and two emissions in the decade commencing 2040.
As PLS continues to grow and mature, we stay focused on creating value, shared value with the communities we operate. In FY 2025, we increased our community investment to AUD 2.2 million in Australia, reflecting our commitment to leaving a positive legacy. In Brazil, we supported our first community development program, and even before regulation required it, our team began with a free and prior informed consent process with the local Kilamba community and achieved 100% approval.
We understand that we need to make sure that the community has a voice, not just at the start of the project, but through the entire life cycle. Looking ahead, the long-term outlook for electrical vehicles and battery storage remains incredibly strong with other uses of lithium developing as well. Lithium will continue to play a vital role in enabling the world's energy transition, and PLS is well positioned to be part of that future.
We are confident in our ability to continue to navigate current market conditions and respond to customer needs as the market evolves. Our strong financial position and disciplined capital management ensure we remain resilient and ready to invest in growth when the time is right. I'd like to take this opportunity to acknowledge our fellow director, Steve Scudamore, who has indicated that he plans to retire from the board before the 2026 AGM.
As the inaugural Chairman of our Audit and Risk Committee, Steve has brought exceptional expertise in finance, accounting, compliance, and risk management, guiding us through our first decade with clarity and assurance. His strong and steady leadership has helped the Board shape our strategy, capital management, and confidence. PLS is stronger for his contribution, and I sincerely thank him for his tireless commitment and service. We are well advanced on our succession plan, and as a Board, we will continue to consider Board skill and renewal requirements.
On behalf of the Board, I want to thank our people for their commitment, resilience, and to our shareholders for their continued support. Together, we're building a business that's not only delivering for today, but helping shape a sustainable energy future. Thank you for your belief in our long-term vision. I will shortly invite Dale Henderson to deliver his presentation.
While we will not address questions on the presentation or general business matters until the formal part of the business, for those attending virtually, you may submit your questions at any time. To submit a written question online, select the Q&A icon at the top of the Computershare virtual platform. Type your question into the box, select the topic to which your question relates, and select Send.
To submit a verbal question or comment, please follow the instructions written below the broadcast. For further instructions, please look at the online meeting guide available on the website or as an attachment on the meeting platform. Please note that while you can submit online questions from now on, I will not address them until the relevant time in the meeting. Please also note that your questions may be moderated or, if we get more than one question on the topic, amalgamated.
If your question relates to one of the resolutions during the formal portion of the business, please reference the formal meeting item it relates to, and it will be addressed at the relevant time. For those in the room, I ask that you hold your question until then. Before Dale addresses the meeting, please refer to the screen for a short video.
PLS is a globally diversified lithium leader. We're powering a sustainable energy future by delivering the essential materials for batteries and other clean energy technologies critical to a low-carbon future. From humble beginnings to a global leader, our people, partnerships, and strategy lay the foundation for a legacy that will power future generations. At the heart of everything we do is safety first always. We empower our people to look out for each other and make a positive impact every day.
That's enabled us to set a new standard in operational excellence for lithium at our Pilbara Ngurra operation in Western Australia's Pilbara region. With care and a deep sense of responsibility, our great people deliver excellence across all aspects of our operations. From minimizing our environmental footprint to investing in local communities, we continue to help shape tomorrow.
Our focus is on unlocking our full potential through disciplined strategic growth. We've increased production capacity and reduced our operating costs to create a more valuable and resilient operation through our recent expansion. We've also expanded our global footprint through the acquisition of the Colina project in the state of Minas Gerais, Brazil.
The Colina project gives us future exposure to the growing North American and European battery markets and diversifies our portfolio. We grow as one team, united by one goal, turning ambition into action. Now we've grown beyond the supply of raw materials. With a lithium hydroxide facility in South Korea through our JV with POSCO and the trial of midstream processing technology in Western Australia, we're extracting greater value along the battery materials supply chain. After eight years of proven delivery, our diversified portfolio, and strong balance sheet, PLS is future-ready.
From the Pilbara to Brazil and Korea, our footprint is global, and our strategy is clear. We've stayed the course with no shortcuts, just conviction, great people, trusted partnerships, a mission that guides us. With strong demand for our products and innovation at our core, we're ready for what's next. Together, we're creating a positive legacy that will benefit future generations. We're not just a lithium business; we're powering a sustainable energy future.
What a great video. I do not need to do my speech now, I think. Look, thank you, Kathleen, for your introductions, and good afternoon, everyone. A big thank you to Nick for his very warm welcome to country. In our industry, the cycle does not define success; it is the decisions you make inside it and the discipline with which you deliver them. The recent cycle revealed very different decisions and very different deliveries across the sector, and the impact of that divergence was clear in FY 2025.
FY 2025 was a transformational year for PLS. It was one that tested the sector, but also demonstrated our resilience, discipline, and capability. Despite softer pricing, we delivered major growth projects, materially lowered our cost base, strengthened our balance sheet, and expanded internationally with the Colina acquisition. All the while, much of the sector was contracting.
We turned the down cycle into an advantage, not a limitation. Because of that discipline, we now hold one of the strongest balance sheets, lowest cost hard rock operating positions in the global lithium industry. Combined with our scale, flexibility, and 100% independence, this gives PLS a structural advantage. As pricing normalizes, our margins are set to expand faster than our peers.
Now, as we move through FY2026, our priorities are clear: operational excellence, disciplined cost control, and capital efficiency. We are leveraging the platform we've built to drive stronger margins and sustainable long-term returns for our shareholders. In short, we've laid the foundations, strengthened our resilience, and we are well positioned for the opportunities ahead. Now, today, I want to speak to three key things. The first is how we delivered through one of the toughest pricing cycles in recent years.
The second is how we advanced our strategy across operations, growth, chemicals, and diversification. Lastly, why PLS is positioned for the long-term opportunity ahead. As many of you will be aware here, PLS is the world's largest independent hard rock lithium producer, and that independence is one of our greatest strengths.
It gives us the agility to navigate a fast-moving market on our terms and preserve value with discipline. Our foundation asset is, of course, the long-life Tier I Pilbara Ngurra operation. Through the P680 and P1000 expansions, we have built a leading low-cost processing platform that delivers greater scale, higher efficiency, and operational flexibility, positioning PLS competitively on the global cost curve. Our ambition extends beyond Pilbara Ngurra. We are building a diversified growth platform.
Through downstream exposure with our POSCO joint venture in Korea and international optionality via the Colina project in Brazil, these assets broaden our footprint, deepen our participation in the value chain, and strengthen our long-term growth profile. We are doing this from a position of financial strength. With AUD 852 million in cash and AUD 625 million undrawn credit facilities as at the end of the September quarter, this gives us the flexibility to invest and grow and lead through the cycle.
All of this reflects disciplined, consistent execution on our long-term strategy, and it is a strategy anchored in four enduring pillars, which I will outline next. FY 2025 marked a major step change in executing this strategy. With the investment cycle now largely complete and our operating base strengthened, it is the right time to reaffirm the four pillars that guide PLS.
First is our operating excellence, delivering reliability, efficiency, and safety across the business. The second is around unlocking the full potential of our asset base, led by, of course, our Pilbara Ngurra operation, but also supported by the international opportunity that we have in Brazil with the Colina project. Third, creating additional value through the battery material supply chain, including the POSCO joint venture I mentioned a moment ago, our midstream demonstration plant, and our study pathway with Ganfeng. A shout out to the Ganfeng team who are here today. Our fourth pillar is diversifying our revenue base beyond Pilbara Ngurra, building a broader, more resilient business with multiple future growth pathways ahead of us. These pillars have shaped every major decision we have made, and they underpin the discipline, optionality, and resiliency you see across the business we have built today.
Now, our strategy is delivering exactly what it was designed to deliver: scale, efficiency, and a structurally stronger operating base. In FY 2026, that showed up in the midpoint of our published guidance, and you can see the trends here as it relates to CapEx down to around AUD 315 million as we move from construction to optimization. Unit costs down to approximately AUD 580 per ton, reflecting the structural efficiencies we've embedded through our P850 operating model, our cost mark program, and our expansions being the P680 and P1000. There is production itself, up to about 845,000 tons, supported by a more efficient processing platform and improved recoveries. In short, lower CapEx, lower costs, higher output. I have to say this is my favorite slide in the deck. This is the operating leverage we've set out to build.
We're strengthening our margins, improving our cash generation, and giving us the resilience today with meaningful upside as market conditions improve. It reflects the discipline that has guided us through the cycle and positioned us for long-term advantage. That discipline has been central to how we've navigated the cycle, ensuring that we predict, of course, that strong balance sheet, strengthened cash flow, and maintaining the flexibility to invest when conditions support them. Over the past three years, these actions have delivered meaningful results, including around AUD 230 million in cash flow improvements in FY 2025 alone. This reflects a whole of business effort.
This includes the structural gains from our P850 operating model, the establishment of our AUD 1 billion revolving credit facility, our targeted workforce and corporate cost reductions, and our continued delivery of the Cost Smart initiative, which is our cost-out program, embedding lasting cost discipline, and our earlier decision to withhold dividends to preserve cash during the downturn. Together, these measures ensured PLS remains one of the best capitalized companies in the sector, with the resilience and flexibility to advance growth and respond decisively as the cycle recovers. Now, that same discipline also guided how we used the cash generated during the last pricing peak, where we converted short-term returns into long-term structural advantage. Across FY 2022 and FY 2023, PLS generated AUD 3.1 billion in cash. It was a beautiful period. We put it to good use, and we allocated it deliberately.
We put approximately two-thirds or AUD 1.9 billion back into the base operation, funding our P680 and P1000 expansions and other projects that have transformed the Pilbara Ngurra operating base into a large-scale, efficient Tier 1 asset and arguably second to none in terms of its processing capability that we have established. We also invested about another quarter of that AUD 3 billion+ or AUD 800 million, giving it back to shareholders, which some of you here in the audience I know remember. Of course, wonderful to be giving back to many of you who are here today for having faith in the company and riding that part of the cycle. Lastly, the balance that we retained to protect the business and ensure resilience through the low part of the cycle. In short, we used the cycle strategically, building structural advantages that will deliver value for years to come.
Now, moving now to FY 2025 highlights. FY 2025 tested the resilience of the entire sector, but it also showed PLS at our best. Operationally, FY 2025 was a standout year. We delivered record production of 755,000 tons. We implemented the P850 operating model to prioritize value over volume, and we commissioned the world's largest lithium ore sorter as part of the P680 project, enabling whole-of-ore processing and improving resource utilization. We also completed the P1000 expansion, providing capacity to scale efficiently as the market recovers. I would be remiss to not mention we were on time and under budget, and you can talk to Paul Laybourne, our Project Director, later on how he managed that. We have Brett in the front row that Kathleen introduced to us that led our operations. A fantastic set of outcomes.
I have to say, highly uncommon in any major project ramp-up ever, but delivered by the full team, an incredible set of outcomes. That is what's been behind some of the fantastic success we're starting to realize this financial year. Lastly, for FY 2025 highlights, we went international. We completed our first international acquisition that Kathleen touched on, being the Colina project in Brazil. Together, these achievements reflect discipline, execution, and strategic foresight, positioning PLS strongly for the next phase of growth as and when the market supports. Now, underpinning all of this has been the capability of our people. It's our core advantage throughout not only FY 2025, but historically and what's carrying us forward. Their resilience, professionalism, and commitment have enabled PLS to deliver at a time when the industry faced significant headwinds.
Moving to the financial highlights, well, FY 2025 was undeniably challenging from a pricing standpoint, yet our financial performance highlights the underlying resilience of the business and the discipline with which we have navigated the cycle. With revenue of AUD 769 million, that reflected a 43% decline in the average realized price of $672 per ton U.S. Even so, we delivered positive underlying EBITDA of AUD 97 million, demonstrating the strength of our operating platform. We also achieved a reduction in unit operating costs during the period, down to AUD 627 per ton FOB, even as we completed the major ramp-up activities that I mentioned a moment ago. Lower costs, a stronger operating base, and a robust balance sheet provide the resilience through the current cycle and position PLS to capture significantly stronger margins as the market conditions improve.
Now, it's that combination of discipline, execution, strategic investment, well, that also now extends to how we think about sustainability and our broader role in the energy transition, which I'll turn to now. Sustainability remains central to how we create long-term value. Within FY 2025, we delivered meaningful progress across all dimensions, including safety, carbon emissions reductions, and community partnerships. Just touching on safety briefly, we achieved TRIFR of 2.79, beating our target and performing below the peer average, a clear reflection of the strength of our safety culture and operational leadership. Second, reduction in emissions, well, we reduced our scope 1 and 2 emissions by 7.1%, and we lowered power-related emissions intensity by 20%, enabled by the completion of our stage one of our power strategy. These gains improve both our environmental footprint and our long-term cost position.
Thirdly, as it relates to our community and supply chain partnerships, we spend in total AUD 1.2 billion with Australian businesses, including AUD 30.5 million with First Nations enterprises, working with 16 Indigenous-owned suppliers across the Pilbara, which we are very proud of. Together, these outcomes show how we have advanced safety, efficiency, and decarbonization in line with our mission of powering a sustainable energy future. We continue to create shared value for our people, our partners, communities, and, of course, our shareholders. It is this same disciplined long-term focus that is reflected clearly at Pilbara Ngurra, where our multi-year investment cycle is now delivering a step change in capability. Pilbara Ngurra's latest investment cycle is now complete, and the site has been fundamentally reshaped into a tier one, large-scale, long-life operation with lower cost and a far more flexible operating platform.
The P680 and P1000 projects have delivered a step-changing capability, including new crushing and ore sorting facility that enables whole-of-ore processing and greater scale and efficiency. In parallel, we transitioned to the P850 operating model. This is supported by turning off the Ngungaju facility, and that has created a simpler and more efficient structure, reflecting a discipline value over volume approach designed to maximize cash flow in the current market environment. With construction now complete, our focus has shifted firmly to optimization, lifting throughput, improving recoveries, and embedding further cost efficiencies across the asset. A key driver of that progress is our Cost Smart program. Cost Smart is delivering sustained structural reductions in operating costs across both mining and processing, and more broadly across the business.
These initiatives have embedded a culture of continuous cost discipline, maximizing value through the cycle, and reinforcing Pilbara Ngurra's position at the lower end of the global cost curve. I have to say, Flavio, our Interim CFO, has done an excellent job leading the charge on this front. It is this disciplined foundation around cost out that supports our ability to advance growth options in a measured and strategic way. I will now turn to the outlook for the business. As it relates to FY 2026, our focus is clear. It is about operations, excellence, disciplined cost control, and capital efficiency, strengthening margins and ensuring resilient returns. Our priorities align with the four pillars of our strategy: operate, grow, chemicals, and diversification. Together, these priorities reflect a focused and disciplined approach to FY 2026, positioning PLS to capture value as the cycle turns.
As it relates to our approach to growth, this remains measured and disciplined, growing in lockstep with the market and advancing options that strengthen diversification, flexibility, and future scale, which I have to say are all fully within our control. As it relates to Ngungaju, we retain the optionality to bring Ngungaju back online. This is latent capacity, enabling rapid additional tons when pricing supports higher output. Of course, this is without long lead times or major capital. As it relates to P2000, our next expansion at Pilbara Ngurra, the feasibility study assessing potential expansion of this, which would increase production to more than 2 million tons per annum, that feasibility study is due in FY 2027. Of course, any development decision relating to that study depends upon funding pathways and, of course, taking a view of the pricing environment at that time.
To avoid any doubt, this is a growth option that we have to bring to market when it makes sense for the market. It is not a commitment. In the same vein, we also have the Co lina project in Brazil. Now, drilling and study optimization continue with outcomes due in the June quarter of next year. TheColina project is a high-quality, 100% owned project that broadens our footprint into the Atlantic markets. Collectively, these initiatives form a disciplined suite of growth options, strengthening scale, geographic diversification, and long-term strategic positioning, all set to be deployed as the cycle recovers. As it relates to our downstream strategy, this also provides important growth optionality, and our joint venture with POSCO in South Korea is a key part of that.
Our 18% interest in the PPLS facility gives us exposure to one of the world's most advanced battery and EV hubs and provides a meaningful foothold further down the battery material supply chain. This facility has a 43,000-ton hydroxide facility. Both trains one and two have successfully produced battery-grade material, demonstrating the capability of the operation, and customer certification has well progressed across both trains. Overall, PPLS provides valuable downstream optionality, positioning PLS within an established battery ecosystem and supporting our strategy to create value across the battery material supply chain. Now, alongside PPLS, we are advancing additional downstream pathways selectively and with discipline. As it relates to the midstream demonstration plant, construction is progressing well and remains on schedule for completion next month. The facility will demonstrate our ability to produce high-purity intermediate products through low-emissions processing pathway.
As it relates to our study with our partners, Ganfeng, well, we've assessed more than 1,000 potential sites globally together, and through that process, we've identified several preferred locations. Both parties have extended the sunset date for our potential joint venture to December 27, ensuring that we can time that investment decision with the market in the right location and, of course, making sure it is a compelling investment case. Together, these initiatives broaden our downstream optionality, providing multiple well-sequenced pathways to participate more deeply in the battery material supply chain as the market evolves. Now, with those pathways in place, it's worth briefly reflecting on the broader market backdrop. Before I step through the market in more detail, I wanted to frame the context briefly.
We continue to see short-term volatility, but the long-term fundamentals remain incredibly strong, driven by EVs, energy storage, and the rapid build-out of AI and data center infrastructure. What matters in this environment is cost position, product quality, balance sheet strength, and the ability to stay disciplined through the cycle. Now, turning to pricing. The lithium market remains fast-moving, reflecting shifting supply responses, emerging demand segments, and evolving policy settings across China, the U.S., and Europe. Now, despite this near-term noise, the fundamental outlook remains intact. Inventory levels are normalizing, and in fact, of late, they've been decreasing. Downstream activity is stabilizing, and policy momentum continues to emphasize the importance of secure, high-quality supply.
We are also seeing increasing government focus on critical minerals resilience, and PLS is actively engaged in these discussions, including we recently went on an Austrade delegation to the U.S. that Sandra here in the front row attended. We are also engaged in the strategic reserve discussions for Australia, and we have direct engagement with the policymakers in Canberra. Separate to that, we have also been involved offshore, including the recent APEC summit in South Korea, and just the other week, we attended COP30 in Brazil. Again, all government-related, and the common thread through all of it was critical minerals security. Now, in recent months, pricing has improved from earlier lows, and as the market matures, differentiation between producers is becoming clearer and clearer. Cost position, operational reliability, and balance sheet strength matter today more than ever.
In that environment, PLS is exceptionally well positioned with a long-life, Tier 1 asset, a structurally low-cost operating base, and the financial strength to remain agile as conditions evolve. The rapid growth we have seen across the electric vehicles and battery energy storage continues to reinforce the strength of long-term lithium demand. Together, these remain the two largest and fastest-growing drivers of the market. Global EV sales are expanding strongly, up about 24% year- to- date, with global penetration reaching approximately 30%, and more than half of all new vehicles in China are now electric. This growth is being supported by falling battery costs, broader model availability, and tightening emission standards across major markets. As it relates to battery energy storage, it is growing even faster. It is up around 40% year- on- year.
China's rapid build-out of renewable energy, particularly solar, is driving the need for large-scale storage solutions to stabilize grids and firm up supply. Now, while there's been some short-term noise around U.S. tax credits and tariffs, these developments do not change the long-term trajectory. Electrification continues to deepen, and storage is becoming a fundamental component of every modern energy system. These are structural, not cyclical drivers, and they continue to strengthen. With a 100% ownership model, scale growth pipeline, and a strong balance sheet, we, PLS, are well positioned to capture the full value of this demand as market conditions recover. Electrification is now moving well beyond passenger vehicles into a much broader range of mobility segments, and these emerging markets bring significantly higher battery intensity.
As it relates to electric truck sales, they grew more than 140% in the first half of this calendar year alone, driven largely by China's tighter efficiency standards and the rapid build-out of charging infrastructure. As it relates to rail, it is beginning to adopt battery electric locomotives, including Australia's first units now operating here in the Pilbara. In marine transport, Tasmania's NCAT has delivered the world's largest fully electric vehicle, and aerospace is taking early steps with successful test flights of next-generation electric aircraft. Even motorsport is transitioning, with Formula 1 adopting larger hybrid electric systems from 2026. Apologies to the petrolheads out there. Formula 1's going electric, and good on them. You might have seen in the video the flying drone. That was either myself or James Fuller. We got to ride in that in Guangzhou a couple of months back.
These things are real. That wasn't AI, I can assure you. And how we got that through our life insurance, I'm not sure. We won't go to that. It's incredible to see how the world is changing, and it was absolute thrill for all the right reasons to ride in that EV toll a few months back. Across these e-mobility segments, they actually require larger battery systems than passenger vehicles, amplifying their impact on future lithium demand. The awakening giant. Beyond mobility, one of the most significant accelerations in lithium demand is coming from battery energy storage and the rapid build-out of AI and data center infrastructure. These are becoming major structural demand engines in their own right. Battery energy storage is the fastest-growing segment of the market. China alone is targeting 180 GW s of new storage capacity by the end of 2027.
That's more than a 140% increase from today's level, representing a $30 billion of new investment. Globally, as renewable energy penetration grows, particularly solar, storage is increasingly required to stabilize grids and support reliability. At the same time, AI and data centers are emerging as the second major driver. These facilities require large-scale, instantaneous power support, making grid-connected bests essential for digital reliability. In 2025, this year, more than $580 billion is expected to be invested in data centers alone. Together, China's storage build-out and the explosive growth in digital infrastructure are accelerating lithium demand, reinforcing the long-term opportunity for scale producers like PLS. Stepping back, the fundamentals underpinning long-term lithium demand continue to strengthen. EV adoption is rising globally, energy storage is scaling rapidly, and the expansion of AI and data center infrastructure is creating significant new sources of demand.
China's policy momentum, combined with growing renewable penetration worldwide, is accelerating the build-out of large-scale storage, while emerging mobility segments and digital infrastructure add depth and diversification to future demand. These are structural forces: broad-based, global, and long-term. With a Tier 1 asset, a structurally low-cost position, a strong balance sheet, and further growth options, PLS is exceptionally well placed to capture this growth as the cycle evolves. Against that backdrop of strengthening long-term demand, I want to bring together the themes that have defined PLS over the past year and the qualities that position us for the opportunities ahead. Let me return to the theme that framed today's discussion. In our industry, the cycle does not define success. It is the decisions you make inside it and the discipline with which you deliver them.
The recent cycle revealed very different decisions and very different deliveries across the sector, and the results were clear in FY 2025. PLS turned the down cycle into an advantage. We delivered major growth projects, lowered costs, maintained a strong balance sheet, and expanded our portfolio while much of the sector was contracting. Because of those decisions and the discipline with which we've delivered them, we now stand with a Tier 1 asset operating at scale, a structurally lower cost base, and one of the strongest balance sheets in the lithium industry. Combined with our scale, flexibility, and 100% independence gives PLS a structural advantage. As pricing normalizes, our margins are set to expand faster than our peers. Our growth options across chemicals, international expansion, and downstream technologies are sequenced, flexible, and fully in our control. Our confidence is anchored in what we control.
Disciplined decisions, disciplined delivery, operational excellence, and strategic agility—these are the hallmarks that define PLS and our role as a partner of choice in the global supply chains. Now, before I close, I want to acknowledge our long-term shareholders. Many of you, and many of you in the room today, have held firm through the tough parts of the cycle, staying committed when sentiment weakened. It's your conviction that helped position PLS where it stands today. We are stronger than ever and ready for the opportunities ahead. Let me finish with where we began. The cycle may shift, but disciplined decisions and disciplined deliveries are what sets us apart. PLS is well positioned for the next chapter. Thank you to our great people of PLS, our partners, our community partners, my fellow directors, and all our shareholders for your continued support.
I'll now hand back to Kathleen for formal proceedings. Thank you very much.
Thank you for that. I will briefly explain the meeting procedures before we move to the formal business of today's meeting. All voting will be conducted by way of poll on all resolutions, which I will declare open shortly. If you are eligible to vote, there are two ways you may cast your vote: in person or via the online platform. Voting shareholders who have joined us in person should have received a white attendance card at registration. If you did not receive a white attendance card and believe you should have, please raise your hand now, and ComputerShare representative will assist you. Once voting is open, shareholders in the room can scan the QR code on the white attendance card using the camera function on your smartphone. This will open the voting app. You will need to accept the terms and conditions.
You can then vote by selecting either for, against, or abstain. If you need assistance voting, please raise your hand, and at any time a ComputerShare representative will assist you. For the virtual attendees eligible to vote in the meeting, a vote icon will appear on the virtual platform. Selecting the icon will bring up the list of resolutions and present you with voting options. To cast your vote, simply select one of the options. There is no need to hit submit or enter button as the vote is automatically recorded. You can change your vote up until the time I declare voting closed. If you require assistance during the meeting, please refer to the online meeting guide. With regard to proxies, these numbers will be displayed on the screen for each resolution.
Please note that a number of open proxies has been received for the chairman's discretion, and I advise that I, as Chairman, will be directing these in favor of each relevant resolution. Ladies and gentlemen, I now turn to the formal matters to be considered today and declare the voting open on all items of business. Excuse me. I will give you a warning before I close voting. Rod Simms from ComputerShare has agreed to be the returning officer today, and following confirmation by ComputerShare, final results will be announced to the ASX later today. The questions process for those attending virtually has been explained. For those in the room, if you wish to ask a question, please raise your hand and wait for a microphone before stating your name for the record.
In the interest of time and to allow all attendees the opportunity to ask a question, you may be limited to one question and one followed-up question. I will now move to the business of the meeting. The company has released its notice of meeting for today's meeting, which can be viewed in the ASX and the PLS websites, as well as on the company's ComputerShare meeting platform. I propose that the notice of meeting is taken as read. If there are no objections, I will record that the motion is carried. The first item of business is to receive and table for consideration the annual report, which includes the financial report, the sustainability report, the directors' report, and the auditor's report for the financial year ending 30 June 2025. Members should note that the reports are not tabled for approval, but simply for discussion. Mr.
Derek Meeks from the company's auditor, KPMG, is available to answer questions from members in relationship to the conduct of the audit. I will now pause to allow shareholders to comment or ask questions on the financial report, reports to the directors or auditors, or any other general questions of the company following Dale's presentation. We can address those now. Are there any questions in the room?
Hello. My name is Aaron Wood. I would like to ask a question regarding capital allocation and especially, I guess, employee share plans. I guess try to understand if there is any consideration for these being placed on market instead of being a dilutionary impact to existing shareholders moving forward.
Thank you for your question. It is something that we, in terms of buying shares online or on market versus allocating them. The issue for us has been, whilst we continue to be potentially capital constrained, then it tends to make sense to issue the shares. As we become a more mature company, we will definitely look at buying those shares on market. Given the volatility in the market, our balance sheet and the cash that we have had on hand has held us in very good stead. It is something we absolutely consider and will continue to do so. Other questions in the room? Please. S uggested relation to these resolutions, or can I ask a question about Dale's presentation? Please ask a question about Dale's presentation, yes.
Thanks. I'm Karen Bignon. I note that you're talking a lot about sustainable energy, and I think that's a great thing. In Dale's presentation, he talked about now at Pilgangoora having the largest lithium ore sorter and in Korea the joint venture plant. Could you give us some more details on exactly how much of both of those items and Brazil, if you have the information, is how much of the energy that you use in those locations is sustainably generated and what your short, mid-term goals are to improve the sustainability of the energy that you use, for example, at Pilgangoora. I haven't seen any wind turbines or solar panels in any of the photos, but that could be just because they were out of the photo.
I'll let you answer that, Dale.
Thank you very much for your question. I'll speak to the strategies as much as we have it defined for each of those three regions. Starting with Australia, we have a three-phase approach for our energy transition in Australia. We have completed phase I . We have moved from what was actually remote diesel generators, which are very carbon intensive, to a combination of solar plus batteries plus LNG. By the way, this was actually one of the things delivered this past year. I did not add it on the list. We did so many things, but we have done the first phase of that three-phase strategy. The second phase is essentially an extension of that, more solar, more batteries, and scaling that up. The third phase, hopefully, we will look to do a network power solution in the region.
There are a couple of different models being floated, and the idea there would be to network into a larger infrastructure network where we are all part of the same network. The aim is to continue to pursue carbon out whilst also getting cost out. That is Australia. As it relates to Brazil.
In Australia, what percentage today is renewed sustainable energy? What percentage are you using, is it?
Sandy, do we have that number off the hand? 6MW s of solar power. 6 MW s of solar power. 20% reduction in emissions. How much? 20% reduction in power emissions.
We've had a 20% reduction in power emissions. We can follow up after. We have disclosed this to market on Australia. To round out on Brazil, the good news there is they actually lead the G8 as it relates to lowest carbon power as a country, largely hydropowered power. We will be looking to network into that. This is a very low carbon power source. Of course, one of the attractions of the region and further, a very low cost supply of power. As it relates to Korea, they have a combined source of power that includes some nuclear and some carbon. I don't have the stats offhand unless, Sandy, do you have any of that? Sorry. We'll have to come back to you on Korea. Certainly, Korea, like the other countries, all other countries, is pursuing a carbon out strategy. Does that answer your question?
Not really.
Okay.
I'd like to know, is it 20%, 30%, 1%, 99% in each of the three areas?
Brazil is 100% carbon out already, clear of the hydropower. South Korea, I do not have that number offhand. We will have to come back to you. As it relates to Australia, we have disclosed this already. I do not have that number on hand, but we can give that to you after the meeting. Okay.
Okay. Any additional questions in the room? Nope. Do we have any online questions?
Yes, I have received a couple of questions online. The first one is from Mr. Stephen Mayne in regard to financial statements and reports. PLS has 12% of total shares currently sold short, down from 20% a few weeks ago. We have also had Australian Super lift its stake from 11.5%- 17.5% in the last few months. The stock has also doubled in that time. What is going on? Is any of this connected? Do you know if Australian Super has a policy of making any of its AUD 2.2 billion stake in our company available to short sellers?
Thank you, Stephen Mayne. Australian Super is a very supportive shareholder. They strongly believe in the energy transition, are putting a lot of money into the sector, not just in our company. We have been told they do not have a policy of providing those shares to short. As you know, our stock gets shorted as a proxy for lithium price. When an announcement comes out or there is some speculation about what is happening in the capacity and whether capacity is coming online or offline, that often results in speculation and shorting in the marketplace as a proxy for the lithium price. Do we have any other questions?
Yes, another general business question from Mr. Stephen Mayne. I have moderated this one slightly as I did the previous one. PLS is one of the 20 most popular stocks on the ASX with retail shareholders; however, less than 2% bother to vote at AGMs. This makes the relative influence of institutional shareholders such as Australian Super greater at AGMs than it should be when it comes to contested resolutions put to vote. Who do we deal with at Australian Super, and what would we say to them if they requested a board seat?
I'll answer the first question, which is retail shareholders voting. We make an effort to provide the opportunity for retail shareholders by having a hybrid meeting. We always make sure that our investor relations contact details are on the material that goes out. In my experience, when retail investors are unhappy with what the company is doing, they show up and they vote. That does not concern me because I think we give them ample opportunity and we take their feedback very seriously. In terms of Australian Super, as I said before, they are very supportive. We work with their investment team. We also have multiple interactions with their ESG and stewardship teams. They spend time with us talking about governance. Frankly, I'm not going to engage in speculation as to whether or not they are going to ask for a board seat. Any other questions online?
No more questions on those resolutions.
Any other questions in the room? Excellent. If there are any questions we have not had time to address, please take the time to either talk to James or anybody else. Further on sustainability, we have Sandra in the room as well. If there are no further questions, I will proceed to the specific resolutions in the notice of meeting for shareholder consideration. We have a number of remuneration resolutions to consider today. I thought I would have Nick come and explain our philosophy and strategy with executive remuneration. I would like to invite Nick Tornada, the Chairman of our People and Culture Committee, to say a few words.
Thank you, Kathleen, and good afternoon, shareholders. I'd like to address resolutions 6 through to 10 relating to equity grants for our Managing Director and CEO, Dale, and the executive remuneration framework more broadly. The resolutions before you today reflect the board's simple but powerful philosophy. Executives should think, act, and be rewarded like owners. When our executives hold meaningful equity in PLS, their interests become aligned and inseparable from yours. They share in the upside when we create value, and they feel the pain when share price declines. This alignment drives the right behaviors, long-term thinking, disciplined capital allocation, and a relentless focus on sustainable shareholder returns.
Our strategy is to embed this owner's mindset as early as possible by way of three key mechanisms: the existing long-term incentive framework being performance rights, worth, in Dale's case, 150% of his fixed remuneration, vesting over three years, subject to meeting defined performance conditions. The recently introduced mandatory 20% deferred equity component of each executive's short-term incentive, with an optional election to up that to 50% in deferred equity rather than taking the cash. Pleasingly, that election has been taken up by Dale and all the other executives. Thirdly, extending the salary sacrifice scheme to the executives, similar to what has been in place for the non-executive directors for the past two years. Both the LTI and STI equity components carry performance conditions for safety, production, costs, relative shareholder returns, and delivery of strategic objectives. If PLS doesn't perform, the vesting of the awards, cash, and equity is impacted.
We've also proposed an executive loan share plan, which has been designed to accelerate shareholder alignment through what is a once-only escrowed equity allocation to incentivize for both share price appreciation and four-year executive retention during what continues to be a period of sustained volatility in the lithium market. The board is acutely aware of the heightened risk of executive turnover. Maintaining a stable and committed executive team over the next four years- five years is considered critical to ensuring the company can successfully navigate current market conditions and be positioned to capitalize on the future growth opportunities. The board considers the loan share plan to be a necessary supplement to the existing LTI and STI plans at this specific point in the cycle.
Importantly, the performance linkage is built into the offer, as any upside to participants only materializes if there is share price appreciation over the four-year vesting period. This provides strong alignment with shareholder outcomes, while the additional equity exposure accelerates the alignment of executives' interests with those of you as shareholders. We want executives who do not just want to work for PLS, but we want executives who have an owner's mindset. This approach drives better long-term performance, stronger governance, and greater strategic discipline. The board unanimously recommends you vote in favor of all the remuneration resolutions. Thank you.
With that, we'll move to resolution one, which relates to the remuneration report, which is included as part of the director's report that can be found on 102 of the company's 2025 annual report. Voting on the adoption of the remuneration report is for advisory purposes only. The resolution and proxy votes received on this resolution are displayed on the screen. I now invite the shareholders to comment or ask questions that they may have on resolution one, and Danny will let me know of any online questions. Are there any questions in this room related to this resolution? Nope. Danny, are there any questions online?
Yes, we've received one question from Mr. Stephen Mayne. Did any of the proxy advisors recommend against this remuneration report item or any other item of business today? Did this translate into any material against votes? Can the Chair please share what engagement occurred with proxy advisors and major institutional investors before today's AGM?
Thank you, Stephen. Having conversations with investors and proxy holders ahead of the AGM is an important part of the work we do. Sandy Ennis, chair of the sustainability, and myself, we meet with a number of the stewardship and investment teams at major shareholders, and we meet with all the major proxy holders and attempt to answer all the questions. The proxy advisor reports are confidential, and they are the ownership of the proxy advisors, so I am not going to provide information on that. I will point out that there was some negativity in the REM report and in the share loan grant with some concern about whether there was an appropriate mechanism, but in fact, most shareholders supported it. Are there any other questions on the REM report? Okay. If there are no other questions, I will put the resolution to the meeting.
If you haven't done so, please now cast your vote on this item. I will now move to the next item of the business. I refer you to resolution two of the notice of meeting, which relates to the reelection of Mr. Nicholas Tornada as director. Nick retires by rotation and offers himself to you for re-lection. His details are set out in the explanatory memorandum and annual report. The resolutions and proxy votes are displayed on the screen. I now invite Nick to say a few more words.
Thanks again, Kathleen. Firstly, let me say that it really does remain a privilege and an honor to stand here before you to seek your support in my reelection to the Pilbara Minerals Board. When I first joined in 2017, I committed to bringing my operational experience, strategic insight, and responsible stewardship to protect and enhance shareholder value. I like to believe my contribution to the board so far has helped deliver against those objectives. With over 40 years in the mining industry and the colors in the explanatory memorandum, if you want to, after cutting my teeth in the goldfields and then broadening my responsibilities across many bulk, precious, and base metal commodities, I do not think there is much that would surprise me today in terms of operating challenges, social, cultural, and environmental considerations, and geopolitical and economic turmoil, and there has been no shortage of that lately, as we know.
I've enjoyed senior executive positions with several very accomplished resource and mining service companies where knowledge and insights to safe and efficient mining and processing applications were matured, along with gaining empathy, which is required to support the executive in the execution of business strategies. I currently also serve as an independent non-executive director across a portfolio of ASX-listed companies where I chair and participate in various board subcommittees, giving me a deep and current appreciation for best practices in corporate governance, strategic oversight, business and corporate risk management, social and environmental stewardship, and all keeping a pulse check on culture and operational execution. This broader ASX company exposure brings informed and new perspectives to our strategic boardroom considerations, ultimately supporting more responsible shareholder wealth creation.
I take seriously the trust that you place in me and my independence, which allows me to challenge constructively so that decisions are made in the best long-term interest of all our shareholders and our stakeholders. On that note, I respectfully ask for your continued confidence and trust and for your support in my re-election to the board. I look forward to continuing to serve you and to work in the best interest of this uniquely positioned and amazing company.
Nick has the full support of the board, and he's an incredibly good contributor. I'll now invite shareholders to comment or ask any questions they may have on the resolution to reelect Mr. Tornada. If there are no questions in the room, Danny, do we have any online?
Yes, we do. We have one question online from Mr. Stephen Mayne. There was a 9.7% protest vote on the proxies against Nicholas Tornada's re-election. Was there an issue? Could Nicholas confirm that this will be his last three-year term, and he won't be seeking a fourth term in November 2028 when he will have served almost 12 years?
Thank you, Stephen. As many people know, there's an increasing alignment with shareholders' votes when they have an issue either with the auditor or with the REM report to also have a protest vote against the individual who's being elected. We weren't actually given any reason or any feedback from our investors about any issues they might have with Nick. In terms of Nick's standing for re-election, as I said earlier, we have a succession plan that we're putting in place at the moment to make sure that we have an orderly transition of directors over time. If there are no more questions, I'll put the resolution to the meeting. If you haven't already done so, please now cast your vote on this item. I'll now move to the next item of the business.
I refer you to resolution three of the notice of meeting, which is a special resolution and relates to the proposal to change the company's name to PLS Group Limited. The resolution and proxy votes received are displayed on the screen. I'll now ask shareholders to comment or ask any questions they may have on this resolution. Nope. Danny, are there any questions online?
Yes, I have a question from Mrs. Stephen Mayne. Well done for holding onto the company's ASX code of PLS with this name change to PLS Group. Were you influenced by others doing this recently?
The logic for the name change was that when we acquired Latin Resources and also the fact that we have operations now in Korea, we thought it was appropriate to take a name that was not tied to one region, and that's why we went from Pilbara. Luckily, PLS was our ticker, so that worked out quite well for us. Okay. If there are no more questions, I'll put the resolution to the meeting. If you haven't already done so, please cast your vote on this item. The next item of the business is resolution four, which relates to the approval of the employee share purchase plan to enable PLS to issue equity to eligible employees under the plan without accounting towards the company's placement capacity under ASX listing rule 7.1.
As Nick outlined, this allows us to have eligible employees contribute amount of their pre-tax remuneration for a specific period to receive equity interest. The resolution and proxy votes received are on the screen. I now invite any shareholders to ask questions. No questions in the room. Danny, do we have any online questions?
No online questions.
Okay. Thank you. If there are no more questions, we'll put the resolution to the meeting. If you haven't done so, please count your vote. The next item of the meeting is resolution five, which relates to the approval of the loan share plan. As explained by Nick, the loan share plan is designed to provide long-term equity position as quickly as possible to the executives to get the owner mentality and align the interests with those shareholders. Are there any questions on this resolution? Please.
I take it that the loan share plan.
Excuse me. Sorry. Just wait for the microphones to run online. I can hear you. Thank you.
Sorry. Aaron Wood again. I would just like to clarify that the loan share plan is effectively free-carried at a 0% interest rate and that that is covered by the company.
Yes. However, it does not, I mean, we considered options which were providing shares or share rights, which is something that is done. The problem with providing share rights is that it's an automatic benefit no matter what happens with the share price. We looked at options, and the issue with options is you end up with a discount to options, and we wanted something that was face value. We felt that this mechanism gave us the best alignment without significant cost to the shareholders where on a four-year term, which means they only benefit in the upside, but they don't get the free position at the downside. There is no benefit if the share price does not improve.
Sorry. Just to clarify, I believe there is up to AUD 6 million worth of loan proceeds available, and these are provided essentially free-carried by the company with that cost covered by the company. There is an underlying cost.
Yes, but for the shares, for the executive to get benefit, the share price has to be above the issue price or there is no benefit at the end of the scheme for executives.
For the executives. However, just to clarify, there is still a cost to the company. Yes.
There is.
Yes.
Yes, absolutely.
Do we have any ballpark figure around the cost of capital for said loans?
I might turn over to Nick.
I'm going to actually ask Flavio, working at cost of capital, is it effectively percentage-wise?
It's minimal.
Minimal. It is not significant.
Okay. Thank you. Thanks. Are there any other questions in the room? Danny, do we have any questions online?
No questions on this resolution.
Okay. If there are no more questions, I'll put the resolution to the meeting. Please cast your vote if you haven't done so. The next item of the meeting, I'll pull together for questions, and that's resolutions six, seven, eight, and nine in the notice of meeting, which relate to proposed issue equity to Mr. Dale Henderson. These resolutions, given that they're all in equity, I'll pull them together. Resolution six in the notice of meeting relates to the issue of FY 2026 LTI performance rights to Mr. Dale Henderson. Resolution thanks. The performance rights for the LTI are subject to the performance conditions, which include the shareholder return as well as some specific strategic initiatives. There's also a service condition where Mr. Henderson remains employed with the company for three years. The resolution and proxies are displayed on the screen.
I'll now move to resolution seven, which is the approval of the issue of FY2026 STI performance rights to Mr. Dale Henderson under the employee award plan. The board made a change to the STI framework for executives for FY 2026 with the incorporation of mandatory deferred equity component, with an option to take a further portion of their STI opportunity in deferred equity. For FY 2026, Dale is elected to receive an STI entitlement as 50% cash and 50% deferred equity. Accordingly, shareholder approval is required for the issue of the deferred equity. As the actual number of performance rights to be issued cannot be determined until the conclusion of the FY 2026 STI performance approval, shareholder approval is sought for the maximum number of STI performance rights which may be received. Full details of this are set out in the explanatory memorandum, and that includes a 12-month deferral.
At the end of this year, when the STI is issued, it'll be another 12 months of deferral beyond that. The resolution and proxy votes are displayed on the screen. The next resolution is the issue of loan shares to Dale. Resolution eight relates to the approval of the grant, the loan, and issue of the loan shares to Mr. Dale Henderson. I've explained earlier the loan share plan and full details of the proposed loan grant and issue of shares in the explanatory memorandum. The resolution and proxy votes are displayed on the screen. The final resolution, I've got a lot of these, resolution nine in the notice of meeting is the approval of the issue of share rights to Mr. Dale Henderson elected to be received in lieu of 40% of his annual fixed remuneration for the period ending 30 November 2026.
In addition to the board's decision to make certain changes to the remuneration structure for executive management in regard to the STI deferred equity, which we addressed earlier, the board resolves subject to shareholder approval to allow executives to sacrifice a portion of their annual fixed remuneration and be issued with share rights under the employee company employee awards plan. The scheme is designed to replicate the one that the NED salary sacrifice scheme, which has been on foot for a number of years. Full details of the issue of rights are set out in the memorandum. The resolution and proxy votes are displayed on the screen. I will now ask shareholders if they have any questions about that group of resolutions to please ask them now. Okay. Do we have any questions online, Danny?
No questions online on those resolutions.
Okay. If there are no more questions, I'll put the resolution to the meeting. If you haven't already done so, please now cast your vote on the item. We'll now move on to resolution 10. As this resolution relates to me, I will hand over the chair to Mr. Steve Scudamore.
Good afternoon. Resolution 10 of the notice of meeting relates to the approval to issue share rights to Ms. Kathleen Conlon elected to be received in lieu of up to 40% of her annual director fee for the period ending 30 November 2026 in accordance with the company's non-executive director salary sacrifice scheme. Full details of the proposed issue of share rights are set out in the explanatory memorandum. The resolution and proxy votes are displayed on the screen. I now invite shareholders to comment or ask any questions they may have on resolution 10. Danny will let me know of any online questions. Are there any questions in the room? Danny, are there any questions?
No online questions on that resolution.
Okay. If there are no questions, I put the resolution to the meeting. If you have not already done so, please now cast your vote on these items. Thank you. I will pass you back to the chair. Thanks, Kathleen.
We're on the home stretch. I refer you to the final item of business, resolution 11 of the notice of meeting, which relates to the renewal of the proportional takeover provisions in clause 19 of the PLS constitution for a period of three years. The resolution and proxy votes received are displayed on the screen. I now invite shareholders to comment or ask questions. If there are no questions in the room, Danny, do we have any questions online?
No questions on that resolution.
Okay. If there are no questions, I'll put the resolution to the meeting. If you haven't already done so, please cast your vote on this item. Are there any remaining questions? Ladies and gentlemen, if there are no more questions, that concludes all the resolutions put to the meeting. I ask that all shareholders complete their voting before I close the poll. For those online, please ensure that you have completed your voting on all resolutions. I will add a pause for that to occur. I now take it that all shareholders have voted and declare the poll closed. ComputerShare will now proceed with the counting of the poll and collating results. Details of the results of the meeting will be posted on both the company's website and on the ASX company announcement platform as soon as practicable.
I formally like to thank all of you for attending and your participation in the meeting. As that concludes the business of the meeting, I declare the meeting closed. For those of you in the room, please join us for some refreshments in the foyer. As mentioned earlier, we have the management team here who would be delighted to answer any further questions that you have. Thank you very much.