Good morning. I am moderator of the session, Qing Zhu . Welcome to MMG Limited 2024 annual results investor presentation. Attending this meeting are MMG leaders, Mr. Xu Jiqing , Chairman; Mr. Cao Liang, Executive Director and CEO; Mr. Tian Song, CFO; Mr. Nan Wang, Executive General Manager, Operations; and Ms. Sandra Guan, Interim EGM, Commercial and Development. Besides, Mr. Troy Hey, Executive General Manager, Corporate Relations, and Mr. Ivo Zhao, Executive General Manager, Americas, are joining this meeting online. Please note the disclaimer on the screen. This presentation will provide you with an update on the company's annual review, financial results, strategy, and outlook. MMG team will be available to answer your questions at the end of the presentation. Please welcome Mr. Cao.
Good morning, everyone. Or maybe good evening, good day. Thank you, moderator, for the introduction. Welcome to today's results presentation.
We are delighted to have the opportunity to present our 2024 results to you. We are honored to have so many investors, analysts, and media friends coming to the meeting and communicate with us. There are some who have come to Hong Kong from the mainland. Thank you for your interest and support. Let's start today's presentation. As always, in keeping with the company's safety culture, we'll start this presentation with an introduction to our safety performance. In 2024, the company continued to strengthen safety risk management in the face of new areas of management, such as Khoemacau Copper Mine and the construction and production of Chalcobamba by taking a number of proactive measures, such as strengthening management of contractors and mobile vehicles and enhancing employee training and event reporting for the company's LTIF. It was 0.78, a significant improvement over the previous year.
Our total recordable injury frequency per million hours worked was rather stable. It's 2.06, with no safety incident with high potential for serious injury in the last seven months of the year. You may have noticed that we have placed LTIF at the top of our list, but with the improvement of our safety management philosophy, we believe that this indicator is a better indicator of the effectiveness of our safe production management and that more management efforts are necessary. Going forward, we will continue to focus on strengthening our safety culture and implementing initiatives to continuously improve our safety performance. For our operations in 2024, our production and operations were generally proactive and positive, with significant improvement in financial performance and strong production momentum at our mines, and a number of project milestones achieved.
Because of the improved profitability of the mines and consolidation of Khoemacau, EBITDA for the full year was $2.05 billion, up 40% year-on-year. Net profit after tax increased to $366 million, 200% increase compared to the previous year. In yesterday's results announcement, we gave the information. As of the end of 2024, our gearing ratio is at its lowest level ever. Basically, it is at around 40%. Our balance sheet is more robust. This improvement is not easy. Behind it was a series of proven strategic initiatives, including the completion of rights issue and the establishment of Khoemacau JV, and the steady reduction of debt to capitalize on the company's continued profit growth and strong free cash flow, and to lay the foundation for the company's continued growth in the future.
In this way, our balance sheet becomes more robust, and this is very good for our future developments. In our past three years for our copper and zinc production, they are growing steadily, so copper production will grow in 2025, so it will be growing, and for zinc equivalent production, it is 310-340,000 tons, so basically, there is increase amidst stability. In 2024, there is another positive development in the area of mineral reserves. All five mines grew in terms of reserves, and for Khoemacau acquisition, and also the additional resources at the Ferrobamba deep oxide body, there's a new ore, and also the Kinsevere mine and the Rosebery mine, so we have added some copper resources. With all these, our copper resources almost doubled, and for zinc reserves, there is also some increase.
In the future, we will continue to do developments and exploration in order to further extend the life of mine and drive growth in the value of our assets. So, this page is about the Las Bambas copper mine. People are concerned about maintenance of community relationship. And in recent years, we have built deep partnerships with the community in the area. And we have advanced a number of successful and innovative community programs. Particularly noteworthy is the successful implementation of the mine's local value chain integration strategy, which provides a solid foundation for mining operations at Chalcobamba. In addition, our ongoing community efforts ensure the consistency and stability of our mines and transportation corridors. In the process, we continue to work closely with the Peruvian government, local authorities, and community members to ensure long-term stability of the mine and to promote a win-win situation for all.
We will continue to report more to you about the performance of the Las Bambas mine. Apart from our normal operation, well, as of now, we have achieved some good progress in terms of our projects. For example, the Chalcobamba mine achieved steady production in 2024, which drove the Las Bambas overall mill grade to a record high. If you look at Q4 last year, production of Las Bambas on an annualized basis already achieved 400,000 tons every year. For the Kinsevere copper mine, well, mechanical construction of the expansion project is on schedule with commissioning of the concentrator and roasting system progressing steadily. We are in the process of ramping up the capacity. We believe that in the first half of the year, ramp-up will be completed.
For the Khoemacau copper mine, after it is acquired, we are doing feasibility study for expansion, so from 58,000-60,000 tons production capacity will be increased to 130,000 tons per annum. Following approval of the final feasibility study, construction of the expansion project is expected to commence next year with first concentrate production in 2028. Our headquarters and various teams will do a good job in terms of our production and operation, and we will continue the development and delivery of our projects. We will accelerate the increase in copper production. We have confidence to achieve our goals this year and create greater value for all stakeholders. Next, I would refer to Mr. Tian to talk about the company's financial performance. Thank you. Thank you,
Mr. Cao. Online, on-site investors and analysts, good morning.
For 2024, because mine production is steady and orderly, and microenvironments and metal prices gave support, our financial performance improved with year-on-year growth in key metrics. Revenue reached $4.5 billion, up 3%. Operating expenses fell to $2.3 billion, down 18%. EBITDA reached $2 billion, up 40% year-on-year. EBITDA margin 46%. Net profit after tax $366 million, up 200% year-on-year. Net profit attributable to parent company $162 million. The graph on the right shows that MMG is also improving our competitiveness against EBITDA margin of its peers. Next, let's look at the performance of each of the mine assets in 2024. Las Bambas was a strong performer. Production is increasing and costs are coming down. Communities are interacting in a virtuous way, and we are more financially robust.
Stabilized operations at Chalcobamba provided a strong impetus to stabilize and increase production, with the fourth quarter of last year reaching highest production in the last five years. C1 costs were 6% lower than the previous year. EBITDA increased 14% year-on-year to $1.6 billion. Mine transportation has improved significantly. Kinsevere mine increased supply of self-produced our from Phase II and reduced third-party ore depletion, resulting in a turnaround year-on-year with EBITDA of $67.8 million, up from -$32 million last year. Currently, the ramp-up of expansion is progressing on schedule. When production increases, we expect that C1 costs will also improve. Considering the local bought price in order to strengthen the foundation for development, the company has made a related impairment charge of $53 million. In March 2024, we completed the acquisition of the Khoemacau mine in nine months.
The mine has achieved EBITDA of $125.9 million as it ramps up capacity. According to the company's plan, Khoemacau's copper production is expected to reach 60,000 tons by 2026 and further increase capacity to 130,000 tons by 2028. The mine's profitability will continue to increase accordingly. Benefiting from market price, processing fees, and the operational improvements, the two Australian zinc mines performed well. The Dugald River mine overcame a number of difficulties to deliver a significant improvement in mine production and financial performance. EBITDA recovered to $169 million, a significant year-on-year increase due to higher production and lower costs. Production increased month-on-month in Q4, and both production volume and recovery rates were at record levels. Even after 90 years of operation, Rosebery Polymetallic Mine has continued to grow strongly, mainly due to a change in production strategy.
After switching our strategic focus from zinc production to zinc equivalent, we surpassed the one million ton mark in both ore mined and ore milled, an all-time high. Zinc equivalent production reached 130,000 tons. EBITDA $123 million, up 58% year-on-year. We believe that with the advancement of TSF and resource succession, we can further extend the service life of this polymetallic mine. Strong operating cash flow has enabled the company to steadily reduce debt and continue to optimize our balance sheets. Our gearing ratio at the end of 2024 was at its lowest level ever in the past decade, and our balance sheet structure continues to improve. In 2024, we adopted a number of measures. For example, Rights Issue, strong cash flow from projects such as Las Bambas mine. These are all central to the success of our debt reduction efforts.
We're able to reduce interest expenses as a result in the coming few years. Our debt repayments will be orderly and controllable. Financial costs will continue to come down. For CapEx, in order to make sure that we achieve long-term value increase and have reasonable investment, this is an important component of our development. In 2025, we expect that CapEx will be between $1.2-$1.3 billion, which covers investment in maintenance, investment in development projects, and capitalized mining. So here, we have listed some of the key expenditure items here. So that's all in my presentation. Now, may I invite Mr. Xu Jiqing , Chairman of MMG Limited, to address us? Mr. Xu, please.
Ladies and gentlemen, investors, analysts, it is my pleasure to meet with you today. I can see some familiar faces, and today I'm happy to have this opportunity to meet some new friends.
So together with MMG and China Minmetals, we will embrace change together and look for cooperation opportunities in the future. As a member of the Board of Directors, I'm also Chairman of MMG Limited. The Board of Directors strongly supports implementation of MMG's strategic plan, which is centered on solid long-term growth with clear production targets and a focus on key metals that will be critical to a low-carbon future. Here, I would like to emphasize that the company's vision can only be achieved through prudent management of safety, cost, and risk, and also prudent management and high standards and operational excellence planning. To ensure this, the board sets clear targets for the management team and future long-term development goals and ensures that all plans are executed to a high standard. In implementation of MMG strategies, continued investment and use of technology is very important.
We promote east-west synergy in research and development, utilizing both Chinese and international expertise and experience. To this end, we are committed to building a corporate culture that encourages innovation and highly efficient execution. For example, at Las Bambas, we built in that area the largest and modernized remote operation center. For this remote operation center, it is the smart mining that we have been talking about. It is an example or role model. So it shows that in terms of technology innovation, we have our strengths. Besides, we are actively exploring at the other mines about underground smart mining and automated production. So we keep on expanding the boundaries of our technology application. We know that the innovative spirit of our frontline staff or tier-one staff is a key driver of continuous improvement.
So we are committed to fostering this spirit among our employees and providing a work environment that encourages innovation and pursues excellence. I would like to emphasize that MMG adheres to high standards of governance. That is our principle, and this is also our core or fundamental strength. It is also a key driver of our future success. In our future operations, we will continue to fully engage our board, employees, working partners, and stakeholders to work together and build a truly global mining operation system that will meet the challenges in the future and build a bright future. As said earlier, the core of MMG business is focused on key metal sectors that will drive a low-carbon future. As you know, there is accelerating urbanization globally. Decarbonization or low-carbon trend is more and more significant, and there is rising demand for electrification.
At the same time, solar energy, wind power, energy storage systems, and electric vehicles and other clean energy technologies are flourishing. These are developing very rapidly. Based on these analyses and developments and trends, we strongly believe that the market demand for the range of metals that MMG specializes and operates, mainly copper, zinc, cobalt, and also nickel, so for such demand, we strongly believe that the market demand for all these metals will remain strong. Besides, we noticed that on the supply side, many commodities, exploration, and new project developments experience very low progress. It is difficult to meet expected market demand. If we look at nickel mining as an example, although there are technological advancements, especially in the technology in relation to hard nickel, well, traditionally speaking, that may be difficult to mine at lower-grade ores.
However, in terms of mining investment decisions and downstream users' procurement, with the impact of ESG metrics, they are more significant, especially sustainability and community relations. These have become key considerations for assessing whether a project can start or can reach production. Looking ahead, well, in relation to our copper, zinc, and cobalt core metals, medium to long-term prospect, we have confidence. Besides, for nickel, the newest addition to our portfolio, we also strongly believe that in the future, in the market, there will be very good development potential. So here, I would like to say a few more words. Recently, we just announced an agreement with Anglo American. So we are acquiring Anglo American's Nickel Business business. This move aims to enrich MMG's business footprint and increase our market share in South America.
Nickel Business is a global leader in Ferro-nickel production with abundant nickel resources, an excellent operating record, an experienced and stable management team, and a recognized track record of sustainability. For ESG, its performance is also well recognized. Under Nickel Business, basically, they have very good portfolios too in production to our greenfield. For those that are in production, Barro Alto produces about 32,000 tons of nickel per year, with a portion of the ore shipped to the Codemin Mill Plant, which has an annual production capacity of about 8,000 tons. So these two projects together produce around 40,000 tons of nickel. This acquisition is a key step for our company's effort to capitalize on countercyclical acquisition opportunity and expand into the Businessian market. There are two more greenfield projects, as I said just now, Jacaré and MSB. These two greenfield projects have world-class resources volume.
In the future, their growth potential is promising. When it comes to nickel, we have to talk about the Indonesian market. In recent years, the supply of nickel from Indonesia increased significantly. You are aware of that, perhaps, so with this big increase, as a result, in short to medium term, there is a surplus in the nickel market. As a result, there was a negative impact on nickel prices. However, I would like to say to you that we cannot too overly generalize. We have to look at the nickel structural issue. For example, for Class I Nickel and Sulfate, well, there is indeed a surplus. But if we look further into Nickel Pig Iron and Ferro-nickel, well, some Western Ferro-nickel smelters are gradually closed due to profit pressures, and market forecasts indicate a gradual tightening of Nickel Pig Iron and Ferro-nickel supply.
After 2025, in the market, there may even be a serious shortage of Class II nickel. So because of such analysis, ferro-nickel price discount to the nickel price is shrinking. As you can see from this diagram, well, you can see Anglo American's financial performance data. So you can see that Nickel Business is operationally strong. The low-carbon ferro-nickel production has C1 costs, which is in the top quartile globally. As a result, even during periods of low nickel price, well, right now, if we look at the overall cycle, we cannot say that it is at its lowest, but definitely, it is at the bottom of a certain stage of the cycle. And Nickel Business has been able to maintain a certain level of operating revenue and free cash flow. Comparing with its peers, it has a bigger competitive advantage.
In the future, if price rebounds slightly, then Nickel Business is well positioned for future market developments. Overall, we are confident in the long-term potential of Nickel Business, and we do look forward to working closely with Anglo American to successfully complete this acquisition in Q3 this year. If you refer to this diagram, it shows MMG's global assets and business distribution. We are in Australia, Africa, and South America, and we are well on our way to realizing our presence in the world's major mineralized belts. I think you are all experts. I won't need to elaborate on the mineralized belts. Our focus remains on enhancing operational value and maximizing asset growth potential while seeking opportunities to diversify on a regional and commodity basis. In the past one year, as Mr. Cao Liang and Mr.
Tian Song already presented our business development and results. Well, last year was a fruitful year for MMG in terms of business development, project implementation, and team building. We achieved impressive results. We are confident that this trend will continue given our own efforts and the help of all parties, so we believe that the new year will be equally exciting and remarkable for MMG Limited. In the process, the major shareholder, China Minmetals Group, continues to give strong support. China Minmetals Group is the strong shield of MMG, so for MMG's implementation and achievement of long-term goals, China Minmetals Group will enjoy strong impetus. On behalf of the Board of Directors, I would like to express my sincere gratitude to all shareholders, employees, working partners, and community for your continued interest, trust, and support.
Thank you. Thank you very much. We have you all along on our way.
With your trust and support, we have reason and the determination to develop the company in a better way. Thank you very much.
Thank you, management, for the detailed presentation. We will now move on to the Q&A session. Today, well, for Q&A, there will be two ways to ask questions, both on site and online. We have already received some online questions, so we will first take those questions. Management, in 2025, in terms of your production plan and cost estimates, how are they? Sorry, I did not turn on the microphone just now.
Let me answer the question. In the presentation, we have already announced our production plan and cost. Let me elaborate. Copper production for the whole year, 47-52.5 thousand tons. So for zinc equivalent, based on last year's basis, there will be 310,000-340,000 tons.
For each mine, there will be some operation data for Las Bambas, 360,000-400,000 tons, and for Kinsevere, 63,000-69,000, 25,000-29,000, Khoemacau, 430,000-53,000 tons, $2.3-$2.65. Dugald River production volume would be 170,000-185,000 tons. C1 would be $0.75-$0.9. Then Rosebery, new production volume, 45,000-55,000 tons. Zinc equivalent, 110,000-125,000 tons. C1 cost, $0.4 roughly.
Okay, thank you for the detailed answer. Now, let's move on to the next q uestion. For Las Bambas community problems, do you have more details on how to solve the problem? Thank you. Let me briefly explain, and then online, we have from MMG Limited, Mr. Zhao Jing here, who is responsible for Las Bambas. He can also elaborate for Las Bambas.
In the past two years, in terms of community work, we have done a lot, and we have achieved very good results. You may have some impression yourself. In 2023, there were 1,000 odd days of problem in terms of blockage, but in 2024, less than 30 days, and they are scattered all over the year, so every time, the problem only occurred in three to four days, so the result has been quite good, and we have put in a lot of effort, so first of all, we work with the Huancuire community on a lot of coordination and communication. In the past, with this community, we just first negotiated, and after negotiation, we did construction and production. This time, we adjusted our strategy. So we produced, we developed at the same time as we negotiated. So this process was more efficient.
We brought in five to six community companies. We signed a service agreement with them. So in terms of earth moving and also provision of food and technology support and so on. So we have their participation. Besides, in the process, we work very closely with the government. So we got the support and promotion of the government as well. And if you talk about the first mining area, the Fuerabamba community, well, there was relocation by 2014 to 2015. And together with them, we made some innovative arrangements. For that innovative arrangement, for concentrate mine, some trucks business was given to the community. We signed agreement with them on the truck business. That was the first attempt. This is the first time that community company took up concentrate transport work, but not all. They only took up some of the trucks.
So with these measures, our community relationship has improved significantly. We are happy to see this. Mr. Zhao Jing, I don't know whether you have anything to add. Thank you very much for your interest in Las Bambas. Since last year, Las Bambas adopted a number of measures to improve community relations. One important strategy is the Las Bambas project. That is, we offer education support. We work with the Ministry of Education of Peru government, and we signed infrastructure, and we signed agreement on infrastructure provision and education. So we expect that we will invest 184 million in supporting education. Besides, we invested 44 million PEN to build the Kutuctay Bridge. And in this way, we can reduce transport time for four hours. Besides, for the whole community development, it is incorporated into our supply chain and value chain.
In this way, we can offer more employment opportunities, so with all these measures and strategies, right now, together with the neighboring communities, we have stable, long-term, and sustainable working relationship. With the second mining area and the nearby community, we signed contracts on development of phase two, so this year and next year, we can have stable supply from that production volume. Thank you.
Thank you, management, for the detailed answer. Third question. The third question is, what are the main reasons for acquiring the nickel mine? Thank you. Now, we will ask Ms. Sandra Guan to take the question.
Yes, good morning. Just now, Mr. Xu, in his presentation, talked about our strategic developments, so to a certain extent, he has answered the question to us. If you look at our strategies in the long run, we aim at diversified developments.
In the past 10 odd years in our history, our diversification is in terms of geography. In the past, we focused on Asia-Pacific, and gradually, we extended to Africa and South America. However, in terms of our commodities, we also adopt a diversified strategy. So our core products are copper, zinc, and cobalt. Nickel is also within our scope of research. So this time, when it comes to the acquisition, we basically look at the bottom layer of the market. Right now, the market is at a low point. In the future, within a short period of time, it will still be gloomy. But for the long term, we are positive about nickel. Whether you look at the low carbon perspective or future developments of stainless steel, we are of the view that in the long term, the market will recover.
In fact, I think our analysis is in consensus with the overall market analysis. In 2030, there will be a gap in supply of the market. Our business development is not only short term. We have to take into consideration our long-term development goal. For this acquisition, if you look at our acquisition target, it is in line with our strategy because our overall acquisition strategy is that it must be large scale, long cycle, and low cost. If you look at our target this time, it is very competitive in terms of cost. It is within the top quartile globally. For the life of mine, it is 18 years. That means it can support our commodities, cycles, dynamic developments. From this point of view, quality of this resource is very good.
Besides, it is not that its operation is bad so that the owner wants to sell it. It is because Anglo American has an anti-acquisition strategy. It is their strategy as well. And it so happens that we share a common strategic goal. That's why there is this acquisition opportunity. If you talk about this time point, you may be asking why we acquire at this point when nickel is at a low. Well, I think this is a good time point in the counter-cyclical situation. Will it lead to a big burden to our resources? When looking at the scale of this acquisition, it is controllable. Total consideration is $350 million for MMG's financial condition this year and next year. Our copper production will continue to increase. So our cash flow is already very strong. Looking at our overall financial affordability, we can afford the acquisition.
So looking at the long-term strategic goal and resource or asset quality and MMG's business results, we are of the view that this acquisition is a good one. For MMG's long-term development, it will give positive support.
Okay, thank you for the detailed answer. Fourth question. Fourth question is, in acquiring Nickel Business, in the future, how will be your development plan?
Sandra, yes. After acquiring Nickel Business in the short term, what we need to do is integration. We want to integrate Nickel Business into our existing management system. Usually, this integration takes three to nine months. And last year, we just completed acquisition and integration of Khoemacau. So to us, we have very fresh and very mature experience. So as such, we are very confident that we can very quickly complete integration of Nickel Business.
And then very quickly, we have to further research its mining plan and enhancement possibility because MMG has a larger scope. So we have a very professional organization in terms of milling and also recovery and so on. So we hope that with our sister company's technology, we hope that we can improve Nickel Business's operation as much as we can. I want to stress that Nickel Business's operation itself is very mature. Their management team is highly experienced. And looking at their existing management team, they have on average 15 years of experience. So to us, the acquisition is not only about the asset but also the whole management team. So at this point, we have confidence in the long run. As you know, within the scope of this acquisition, there are not only the two assets in production. There are also two other greenfield projects.
Right now, the resource potential is very huge. If you look at the existing nickel market, there is no way for them to start construction very quickly. For these two projects, we have to complete our research and feasibility study process. And when market conditions allow, after we have completed the resear
ch work, then we will make decision on development. Thank you.
Thank you for the detailed answer. Now, we welcome questions on site. Later on, we will also take questions from online. If you have questions, please raise your hands. Before you ask questions, please state your name and your organization. For online investors, please input your questions into the dialogue box. We will read out your questions later. The gentleman on the third row, please. Thank you, management, for your sharing.
Thank you for organizing this presentation session. I have three questions.
First, financial cost and also investors' return. In the second half, when it comes to finance cost, it is slightly higher than first half. But if we look at debts, in the second half, some debts are reduced. So I would like to know more about that. For return to investors, in the equity market, some moves have been made. So in the future, what kind of plans do you have in terms of your return for investment? Thank you. Thank you for your question. For financial cost, just now, Mr. Tao said already that in recent years, we're able to offer quite good cash flow. We will use such cash flow to support CapEx projects that can support our long-term value. And some will be used to repay debt in order to improve our balance sheet structure. Since 2023, it was $360 million in total financial cost.
In 2024, we spent $390 million. So it seems that there is an increase of $30 million. And it is higher in front, a higher front end and lower at the back end. So that is because of Khoemacau acquisition in March. After that, we did debt financing and rights issue. And later on, we did equity injection into the JV. So as a result, finance cost increased because of equity financing arising from Khoemacau acquisition and debt financing. So there is financial cost increased by $60 million. After acquisition of Khoemacau, there was an agreement that with our achievement of sales, their finance costs will also be incorporated into our accounts. So that amounted to $23 million. So that explains the increase. However, we did equity financing. We repaid debt. And then for Las Bambas, we also did replacement of the project loan.
So we replaced the high-cost loan by a low-cost loan. And we also rearranged other liquid facilities. So as a result, we achieved some benefits, around $60 million reduction in our financial costs. At the same time, $20 million is from SUNAT. That is the tax dispute in Peru. Because of the tax dispute, when we are sued, we're asked to pay part of the legal cost first. And the interest rate is high for that. But if we win the case, then the interest will be paid back to us. So last year, as you know, we won a number of court cases. And there is one more piece of good news yesterday. In relation to the last lawsuit on profit tax, there was an award of $900 million in support of us.
Another big breakthrough is that for the first time, they said that there is no connected transaction between Chinese banks and the Las Bambas mine. So we actually gained some benefits. And that offset another $20 million. So as a result, the increase in financial cost was not more than $30 million in the coming few years. We can generate strong cash flow from operations. It will continue. And for the newly acquired Nickel Business asset, there will be separate financing. And we believe that our financial costs, our debts will continue to come down. Financial costs will continue to decrease. For USD, if U.S. interest rate continues to come down, then that is another plus to us. That's my answer to your first question. And then second question is about return to investors.
I would like to report to you that MMG attaches much importance to return on investment for each of our CapEx items. Internally, we have to do valuation analysis and then investment calculation. And we are strict in giving approval. So external acquisition is also treated in the same way. Mr. Xu is the representative of the majority shareholder. He has been asking us to improve return on investment and as soon as possible that we should pay dividend. But there are some legacy reasons. In the past 10 odd years, all along, we have been a fast-growing company. We used our money to support Las Bambas and Kinsevere and Dugald River development so that they can commence production as soon as possible. And then we can generate cash flow in the process as a platform company of a listed company. We cannot receive dividend from subsidiary.
The listed company itself has its own costs and expenses, $30 million a year. Over the years, the platform company's retained earnings is a negative number. Based on the existing laws and rules, we cannot pay dividend. In terms of our operation, when Las Bambas can reach 400,000 tons a year and Kinsevere can reach 80,000 tons in production. For the two Australian mines, you can see that in these two years, the increase in production is not big, but they are gradually increasing production. I think this is not easy. With all these moves, the result is that our future cash flow will continue to be strong for Las Bambas very soon. There can be dividend from Las Bambas to the parents.
For other assets, we will try our best to achieve that in order to compensate the loss to the parent company. In this way, we can pay dividend from the listed company. We will announce our listed company's dividend policy very soon. While we make sure that we can have stable and sound operation, we will also consider long-term interest of shareholders. We will strive for ways to make sure that we can maximize return to investors.
Th ank you. Just now, I forgot to introduce myself. I am Hong Jing Shan Jimmy from Citi. My next question is about the Minmetals Group. MMG is an overseas operation platform. From the majority shareholder, what kind of support can be obta
ined for MMG? Thank you for your question. Earlier on, I said already that Minmetals Group, as majority shareholder, is the controlling shareholder.
And on all fronts, we will offer to the listed company support on all round. Well, of course, this is not only simple support. If you have been following up the company over a long period of time, you can see that from 2009 onwards, at the establishment of this company, the group, China Minmetals Group, considered MMG as overseas development flagship platform for matters. So since establishment of MMG till now, this has not changed. In the past 10 odd years, global asset resource development and layout relies on MMG's own strengths and also the majority shareholder support and external financial institution and capital market support. So for the majority shareholder support to the listed company, it is very clear. So MMG is a platform to develop our global base metal globalization, highly competitive, world-class international mineral company. So with this positioning, the support is all round.
It includes capital, technology, markets, and talents. So all round, especially if you look at China Minmetals Group, it is focusing on metal and minerals. It is a large-scale SOE. So from resource exploration to design to construction to operation to trading, logistics, financial services, the group is an SOE with full industrial chain. So as a result, MMG in our overseas resource development and operation is given very strong support. So in the future, this is a strong impetus for MMG's development. With this support, we are able to have our present globalized mineralized belt. That's the basis. In the future, the group, China Minmetals Group, will continue to give this support to MMG. As a result, the whole industrial chain strength can help MMG. Capitalizing on MMG's internationalized professional management team, then the long-term development goal of this platform can be achieved.
This year, as you know, it is the last year of the 14th five-year plan. Very soon, we have to formulate the 15th Five-Year Plan. So for the whole group, including MMG, this year, we will start to formulate the 15th Five-Year Plan in the process. The group, as usual, will continue to support MMG's long-term development goal so that existing resource value can be released, and we will deepen, widen, broaden the global resource layout.
Thank you. My final question is about your operations. Some time ago, you talked about the 2025 guidance, and as of March, what are some areas where you will exceed expectation that we should pay attention?
Yes, thank you. Mr. Nan, please. Thank you, Jimmy, for your question. At present, from the beginning of the year, if you look at production, it is rather stable. Las Bambas followed its plan in operation.
So for Chalcobamba and Ferrobamba, for these two pits, their mining is quite normal. When it comes to the two Australian mines, at the beginning of the year, they were impacted from natural disasters. There were wildfires and floods. As a result, production and sales were affected to a different degree. However, for the whole year, there is no problem at all. And then for Rosebery, there was also wildfire and also some thunderstorm. And then in terms of smoke, there is some impact from smoke to the mine. But for the whole year and for the quarter, we're able to restore normal production. For the two African mines, for example, Kinsevere, as of now, we are in the ramp-up process. If you look at the sulfide plant, well, it is ramping up fast.
But if you talk about roasting and also processing, we still need to make improvement in terms of repair and maintenance. So this is just normal in the ramp-up process. At the end of March and in early April, basically, these tasks will be carried out. And at the end of the first half, we will be able to achieve the designed capacity. And then if you look at Botswana, this year, rainfall had greatly exceeded past records, but the mine was able to overcome the rainfall problem. So even though there was some impact to production, we are still able to maintain good trend. So for this year, for the whole year, we don't think there will be a problem with our production. We can achieve our guidance to the markets.
Okay. Thank you for the detailed answer. There are many questions on site.
So let's take the next question. The gentleman on the third row, please.
I am Liao Chaowei from Zhongjin. I have three questions. First, the M&A strategy of your company in the future, what countries will you focus more on, or what metals will you focus more on? Apart from nickel, will that be newly added metal? In 2025, do you have new acquisition that will be implemented? And then in relation to return to investors, apart from dividend, when it comes to market cap management, do you have some measures, for example, share buyback or majority shareholders' increase of shareholding or management's increase of shareholding? Are you going to do these in order to boost the share price? Right now, share price is rather low. My third question is about Las Bambas. CapEx this year is quite big.
So in expanding the TSF in the future, how much will be the maintenance CapEx? Thank you.
Thank you, Mr. Liao, for the questions. Let me first take the question about M&A, and then our colleagues will take the other questions. For M&A, as said just now by Mr. Xu, we are a growth-style mining company. So we need to ensure that we can achieve growth while maintaining sound management. So we need to identify new assets. If we cannot have new resources, we won't be able to sustain our growth. So which commodities will we focus more on? In our presentation, we mentioned copper, zinc, nickel. At the same time, new energy metals like cobalt, lithium, and other opportunities. But we'll focus more on our core products: copper, zinc, nickel. In terms of regional layout, it's clear for copper. It is in South America.
And also the African belt, the layout is clear. For this year, we'll continue to look at whether there are appropriate opportunities in the market. As you know, copper is very hot right now. It is difficult to identify good opportunities. We'll continue to observe. But right now, there is not any ripe opportunity. If there is, we'll let you know. So this year, we'll focus more on Nickel Business's completion. We hope that in Q3, the deal will be completed, and then we'll integrate the asset into our company. So this year, we won't have too much energy to open up other new markets. But if there is really good one, we will let you know in due course. Next question about market cap. If you look at market cap management, I think the fundamental point is to go back to our fundamentals performance.
If our fundamentals perform well, then the capital market will reflect in a reasonable way. If you look at our results and performance, as our leader said this year, our copper production will increase, and from the market point of view, in the short term, the market will be stable. Our balance sheet last year improved, and this year, there is further enhancement plan, so from financial cost point of view, there would be further improvements. So looking at our fundamentals performance, I believe that it is going to be positive. Are we going to make some concrete moves in the capital markets? As you said just now, you talked about share buyback and also other capital market operation, well, from this point of view, we do not rule out any possibility.
But at present, we do not have any concrete plan that this year we have to take any certain move. Another point is, as mentioned by Mr. Tian, our company is formulating our dividend policy. So on this, I believe that we will give some guiding views to the markets. So on dividend and our long-term plan, I hope that you will have clearer understanding. Finally, I would like to say that right now, if you look from market cap point of view and also share price, the management and shareholders share the same interests. Looking at our long-term incentives and also our performance appraisal metrics, there is this metric about share price performance. So the management has a strong motivation, hoping to boost share price, hoping share price will be stable. So that's my answer to your question. Thank you.
In the future, are you going to have some new plan in the past few years? It seems that there are a few 10 million shares involved.
Okay. Let me first take your question. Right now, I cannot recall very clearly. I cannot tell you the exact number. But for long-term incentives, option plan, as you said, in the first phase, that had matured already, that is a 10-year term. From long-term incentives point of view, the tools that we use in the past years are different. Sometimes it's option, and we also had offered cash format in the past. So no matter what tools we're going to use in the new plan, long-term incentive arrangement won't change. Our performance appraisal indicators or metrics will be fine-tuned every year. But for share price, this metric has not changed.
In the past few years, when share price did not perform well, the management had shouldered responsibility. So we did not take that part of incentive. So from company's resource point of view and personal income point of view, we face pressure. So this has not changed. In the future, no matter what the format will be, there is this pressure on the management. Let me take the question on Las Bambas CapEx. For Las Bambas CapEx in these two years, it is gradually growing. No matter whether you talk about sustaining CapEx or growth CapEx, well, it is about capitalized mining. So these had to grow. You can expect that because for our production volume, since 2021, it was 200,000 tonnes in 2022, 220,000 tonnes in 2023, 270,000 tonnes 2024, 320,000 tonnes. So there was a gradual increase. Last year in 2024, Chalcobamba second mining plant was opened.
It started operation in Q4. It reached 400,000 tonne annual production. So such work means that we have large amounts of expansion, construction, road repair, infrastructure building works, and also tail mine maintenance, further development, and so on. These incur expenses, and such expenses will increase. So in these one or two years, CapEx is growing. That's the reason. Looking at the exact numbers every year, we disclose detailed information. So you can refer to the detailed breakdown of CapEx.
So that's my answer. Thank you.
When it comes to expansion, will it complete this year, or will it take one to two more years? TSF expansion is a continuing process. The bigger the production volume, then the expansion will also grow fast. So for phase one TSF, number one, it is already Phase 11. Now we are doing expansion of Phase 11 for such construction work.
It can support our production up to 2028, 2029. After that, there will be a large volume of TSF expansion and also new construction demand. For such CapEx, definitely, it will be when there is demand from our production and operation, and our production volume grows fast, and the CapEx can support, then we will do it. Okay. Thank you.
Thank you very much for the questions. Before you ask questions, please state your name and the organization you belong to. Thank you. Third question from on-site participants.
Good morning. I'm Zhao Yunjie. Congratulations on your results. Congratulations on your growth, and I believe your logic is very clear. I have two questions. First, $53 million impairments about cobalt. In the future, well, cobalt is at a low price. If in the future there is recovery, will some impairment be back provided?
And then for effective tax rate, around 40%. In 2023, it's only 30%. So that means there is an additional 5-10 points. And that means a few 10 million USD impact on your results. So can you answer these points, please? I do not understand your second question. Or effective profits tax rate.
Okay. $53 million impairments. Well, we look at our long-term developments, and we need to solidify our foundation. Every year for each mine, each asset, we will do an impairment test. And we will look at the capital, production, and resource, and future developments to do an overall test and calculation based on our model. We have to work with external auditor. And after their verification, then the impairment test will be compared to the existing book value.
If book value is higher than the impairment test results in terms of long-term value, then the difference will be accounted for as an impairment. On the other hand, there is not a need for impairment on the contrary if the vice versa is true. So this year, in the impairment test for cobalt's long-term market, price is low. We have taken that into consideration. So in our impairment test model, the result is lower than our book value. So that's why we made a $53 million impairment. In the future, when the cobalt market recovers, are we going to back provision it? Well, we have very stringent financial policy about back provisioning. It's not that simple. So I don't think there is this opportunity. If there is, we still need to do a new re-evaluation and communicate with the external auditor before we can do it.
About profits tax rate. Well, the data I have is different from yours. Our effective tax rate is around 32%. I don't know how you derived 40%. So you mean you are reinstating it, right? It's difficult to say. We may have to do a detailed analysis afterwards, which can be reinstated, which cannot. We are not sure. Different countries have detailed requirements on taxation. I have to go back to double-check and work things out. I can supplement. There are some details that our finance colleagues can share with you. In 2023 to 2024, there is an increase, but there is also some decrease. Usually, for our effective tax rate, if it increases, especially with Las Bambas, there are some expenses that cannot be deducted as a result. Effective tax rate will go up.
But last year, in 2024, our overall profitability is good. So there is some decrease. In 2023, 40-odd million. It decreased to 10- odd million. But there is some deferred tax after some financial assessments. We did some write-off as a result. There is 60 odd million deferred tax asset that was written off as a result. Our effective tax rate reached 41%. So in fact, our finance colleagues can give you further details on the overall breakdown later.
Thank you for the answer. Thank you for the question. Because of time, we will now take the last question from on-site participant. This gentleman, please. Congratulations on resolution of the Las Bambas community problems so tha
t you can continue your production and operation. I am an investor in the secondary market. So China Minmetals is the majority shareholder, as such as now.
You are going to formulate the 15th Five-Year Investment Plan soon because of legacy issues. When it comes to overseas development, you are making great contribution to resource security of the country. Now, I have a suggestion to the company. I'm not asking a question. In your future production and operation and investment, I think in the past decade, first of all, you guarantee resource security for the country. You are developing rich overseas resources, and because of legacy issues, including capital and so on, you also made good contribution to Chinese banks because the cash you earned has been paid as financial costs, and for the whole management team, your employees, you also offer good employment opportunities to various local communities. In the past 10 odd years, I have this feeling.
And you have not paid any dividend because of legacy problem in order to ensure resource security and also acquisition of African copper mine. Even though you have paid the highest price, and that's why you acquired that mine. Well, I think in the future, copper price will definitely go up. I agree to that point. But from shareholders' returns point of view, it is not very satisfactory. So I think, of course, in the future, when you plan the 15th Five-Year Plan first, you want to strive for resources for the country and in the future for the majority shareholder and all shareholders. I think you should also consider giving enough return to them. You should take a balanced approach between these two sides. So Chairman, can you give your views on this? Thank you very much for your question or comments. So you are a shareholder.
You are a liquid share shareholder. And let's say we represent the majority shareholder, then we share the same feelings with you. So when you raised this suggestion, I think it is very good. I personally agree with you. For any company's development process, definitely, we need to strike a balance between short-term, medium-term, and long-term. And also, we need to balance between return for majority shareholders and liquid shareholders. We want all shareholders to be at the same position. There may be different viewpoints. But for the company's long-term development, we need to have confidence. And then we will promote long-term better development of the company. So from this viewpoint, I agree with you regarding your suggestions, no matter whether we talk about the majority shareholder or the listed company.
In the coming 15th Five-Year Plan, we ask the company to be more reasonable, more holistic, and more detailed in considering all these aspects for China Minmetals'. Our mission is to develop China into a strong mineral country. That's our social responsibility. But we never forget that we are a company. We are an enterprise. The listed company is everybody's enterprise. As an enterprise, we need to maximize enterprise value and return. That is also our most important responsibility. So we will not only go for a guarantee for resources and sacrifice the basic interests of shareholders. We won't do that. The majority shareholder and the minority shareholders will not agree to that. So from this point of view, shareholders, let's work together and treat this as a long-term development platform. There are fluctuations and cyclical pattern in the mineral industry. We need to be patient.
We're talking about patience, capital, long-term capital. Only that capital can stand firm in the mineral industry. When there is a larger scale greenfield project, on the first day of discovering that project, we need to do design, exploration, development, and so on. So it takes at least like eight to 10 years. So in order to achieve return, we need a process, some accumulation. In the past, well, actually, we had a number of long-term investors. They took the largest amount of pain. They have been with us for more than a decade. Now, if we are able to complete the Cuprous acquisition, then we have six operating mines together with some future development room that has good potential. So I'm sure that there is not a long way for us to achieve return.
Yesterday, in the board meeting together with our independent non-executive directors, we discussed our company's dividend policy. So very soon, you'll be able to see our dividend policy in our annual report. So it will be disclosed in our annual report soon. So in the past, because of legacy reason, our return is not really realized. But we need to thank all shareholders for your firm support all along till today. Together, we have overcome the cold winter. The spring of having dividend won't be too far away. Thank you.
Thank you, management, for the detailed answers. Thank you for your questions. Management, do you have anything to add? There is no other question online. Okay. We have already spent one hour or so. You have asked many questions. Thank you very much. The Chairman has said that the spring of dividend is not far away.
So now, I would like to deliver a short conclusion for MMG. Right now, there are both opportunities and challenges for the overseas assets. We will continue to develop the mines to achieve an upgrade and sustainable developments. For Las Bambas, it has been operating for two years in a stable way. And then other mines are ramping up, as Mr. Tian said. For Las Bambas, we have actually successfully resolved the disputes. We won many lawsuits. So all these positive results can support Las Bambas operation. So there would be more profits to come. And for cobalt, it is being challenged. But we have adopted flexible production measures to adjust the cobalt production. Now, we are facing a very volatile market. We are trying to maximize the mine value for Khoemacau.
We are doing study so that we can commence production as soon as possible, and we can lower cost and increase efficiency. Now, in recent years, we have two new mines in zinc equivalent. In fact, the zinc equivalent market is showing good signs. So we are going to achieve some breakthrough in our balance sheet. And then for nickel acquisition, well, we have done a lot of on-site study, and we have evaluated the current market environment and future opportunities. Given the current nickel price level, well, Nickel Business is able to operate in a stable and profitable way. Well, there would be some CapEx in these years. It will not be big, only $20 million-$30 million, with the majority shareholders' strong support and our internal experts' efforts. In the future, we will be able to improve our capital operation and sustainability.
Our current financial position is at its best right now. This year, our cash flow will continue to increase. We will improve operation and management of our existing assets and continue to improve our capital structure so that we can lay a stronger foundation for the future. In the future or later on, if you have further questions, if you want more information, please contact our IR department anytime. Once again, thank you for joining. Thank you very much. I wish you a good day. Thank you.
So we will conclude our session here. Thank you for joining. Management, please stay. We will take a group picture.