Hello. Good afternoon, ladies and gentlemen. Welcome to PT Vale Indonesia First Quarter 2026 Earnings Call. As usual, my name is Andaru Adi, and I will be your moderator for today's call. Joining me offline are most of the PT Vale's C-level executives, while the others are joining online. During this afternoon session, our BOD will share some highlights from our company's operation and financials performance, and then update on the growth projects. I think at the end of the slide, we will have some forward-looking guidance for you to consider. Next one. In short, today's agenda consists of four parts. The first one will be the highlights and financial updates. It will be presented by Rizky Putra. The second part will be coming from Abu Ashar. He will present some operational updates from our side.
Part number three will be growth project update presented by Muhammad Asril. Last but not least, industry update. That presented will be from Vinicius Mendes . This is just a reminder to all participants, because this presentation includes some assumptions and forward-looking statements that might encompass uncertainties. In addition, all opinions and assumptions are based on our judgment. Then subject to change without prior notice. You need to refer to the following cautionary note and disclaimer. I think without further ado, I will now hand the first session to Rizky Putra to begin today's presentation. Please, Pak.
Thank you, and thank you everyone for joining the call. I think first of all, I would like to apologize that our CEO couldn't join the call today. But on his behalf, thank you very much for attending this quarter one earning results. Which I think is a strong result when it comes to the first quarter performance of PTVI. Not only talking about coming from the sense of profitability, but also on the foundational part, which I think later on we will explain about the key progresses within the projects and developments within our next phase of growth.
I think one of the key highlights for the existing operations that we have, which is the nickel matte, which for the first quarter, we managed to deliver 13,620 and 13,727 metric tons, which reflects, of course, there is a furnace rebuild schedule. But we believe that it is a strong number, especially when we consider that when it comes to the first quarter, especially in the first couple of weeks of the year, there was an RKAB delay, which I think Pa Abu and the team and all of the people in Sorowako worked very hard in terms of getting into pace and also catching up in terms of the quarterly production. I think it's a really good output and outcome when it comes to the first quarter production of nickel matte.
I think we can safely say based on the current production rate, based on the mining phase that supports the smelter's production, we believe that we are on track to achieve a full- year production target of 67,645 tons. The second point, which is basically the new engine I would say for PTVI, which came from the new mining sites, Bahodopi and also Pomalaa. I think last year we had an addition of new mining from Bahodopi. This is going to be the first full- year of performance for Bahodopi. For Pomalaa, since the first month of the year, which is January, we commenced operation from Pomalaa as well, which marks diversification and also potential growth in terms of revenue, and diversification of product for PTVI going forward.
Going on to the financial performance and profitability, revenue was $252.7 million in the first quarter. It's a bit lower when we compare it quarter-on-quarter, especially compared to the fourth quarter, due to lower sales volume. But the pricing environment have been indeed. So average LME, which reflects the average realized nickel matte price, increased to a 15% growth, which is equivalent to a number of $14,200 per ton. EBITDA, at the same time, rose around 29% quarter-on-quarter to $80.1 million, which shows the strong pricing environment along with the cash cost that is quite maintained quarter-on-quarter as well. This has been a good profitability result.
In the end, net profit increased by 85% with $43.6 million, which is a trickle-down effect from the pricing environment, the maintenance of the cash cost, which we believe that it is a good number, especially when we see this number is only reflecting the first quarter of the year. That is the first quarter in terms of achievement within the financial and the operational side. But I think it is also important for us to touch upon the readiness for us to anticipate future growth. I think one of the key milestones within the first quarter that we achieved is the readiness of funding facility. So PTVI achieved a sustainability-linked loan of around $750 million, which will support the expansionary phase of the company alongside with its commitment with its ESG front.
It is not only getting a fresh fund into the bloodstream of the company, but it also shows the ongoing commitment and future commitments of the company when it comes to the topic of ESG. Next one. Without going into specific details again, I think you are quite aware with the numbers, but I think I just would like to highlight that. Again, pricing environment showed a positive uplift when it comes to quarter-to-quarter result, so a higher pricing environment, which resulted in 15% average selling price increase. Cash costs also showing a good performance. We maintain within $10,300 per tonne of nickel matte. This is already including the lower production rate because of the furnace rebuild, so I think it is still contained and managed within the rates that we expected.
All of this also supported by the new bloodstream, again, the selling of the ore, which is showing additional volume. Almost 1 million was achieved in the delivery of ore to saprolite for the first quarter. The cash cost supporting that is also in good shape, right? For Bahodopi it is at around [$21] per tonne, for both getting the limonite and also the saprolite. Whereas for the Pomalaa operation, it is [$13] per tonne, which is actually still in the beginning of the period, meaning that with come scale, going forward with more efficiency, it has an upside to the current pace of operation when it comes to Pomalaa. I think with all of that in confluence, EBITDA grew at a good pace, at 29% compared to the previous quarter.
The final result, net profit with a total of $44 million for the first quarter of 2026, which is 85% compared to last year. Cash and cash equivalent at the end of the quarter was $220 million, which we believe that this is still a good amount to end the quarter. Of course, with the readiness of the funding facility, we are on track to anticipate the future growth going forward. I think we have the next agenda for production and operation. I will pass it on to Pa Abu.
Okay. Thank you, Pak Rizky. In the first quarter 2026, PT Vale maintained a solid safety performance, so we do not have any fatalities. Also, we do not have any major processes event with lower injury frequency rate, 0.12, improving from 0.19 in the same period last year. As part of our safety program includes proactive safety leadership through Gemba, you can see on the photo, which is the presence of leaders in the field to do safety dialogue, reinforce discipline, execution, and control, ensuring that the critical activities were performed following the safe work procedure or the safe work standards. In addition to the safety program, we strengthen the emergency response time through the emergency drill. You will see the photo on the right.
We conducted emergency drill in several areas of our operations, including Sorowako, Pomalaa, and Bahodopi, validating the emergency response capability through the routine exercise. In the first quarter, a part of the national safety month, normally conducted in the first quarter of January to February, PT Vale have a safety education activity through Vale Goes to Campus. You can see on the photo in the middle above. In Pomalaa, actually in Southeast Sulawesi, to share the industry best practices. This activity actually aims to equip students with a basic understanding of the importance of safety. Strengthening the future safety workforce by sharing the best practices and building safety capability through the Vale Goes to Campus. Move to the next slide for production. Okay. PT Vale delivered a solid operational performance in the first quarter this year.
You can see on the charts, our production of nickel matte was 9% above the plan for the first quarter, despite that we had delay in [RKAB] in January, but we could stabilize our Sorowako operation through a good quality ore feeding from mining to the processing plant. At the same time, we could manage our maintenance activity. Some of our maintenance can be moved to January at the time that we don't have any [RKAB], but allowed to do the maintenance activity. This is the strategy to minimize the impact to our production. In addition to our core nickel matte production from Sorowako operations, PT Vale continued to make progress in Bahodopi operation. You can see on the chart on the right, our sub-product ore sale close to 890,000 tonnes. In the first quarter, we also have ore sale, limonite ore from Bahodopi block.
It's about 89,000 tonnes. In overall, in terms of production in the first quarter, our production performance is doing well and further to continue stabilizing our operations for the following quarter to be able to achieve our production target this year. I think the next slide could be presented by Pak Asril. Thank you.
Okay. Thank you, Pa Abu. Just to continue on the IGP, some highlights. Again, just to refresh everyone that the company is sharpening the strategic Focus through the development of mining projects, as well as downstreaming processing facilities in collaboration with our partners that you can see in the pictures. In Pomalaa, in particular, our mining projects reaching 73%. Actually, that is the construction progress, but at the same time also that we are actually starting the mining since Q1 2026, which you can see also production just ramped- up in Pomalaa. This development of mining also align with the development of the HPAL plant that you can see 65%. Today, the progress is quite good. Based on the latest forecast in the ground that the first mechanical completion for Pomalaa project is going to be by Q3 2026, which is very close too.
IGP Sorowako also is continuing the mining that we are reaching a good progress in mining while we still have challenges in our HPAL plant in [Morowali] today. But we are moving towards the plan still as the agreement that we made with our partner for Sorowako Limonite projects. Next slide, please. There are some pictures here that is coming from Morowali, Pomalaa, and Sorowako project. You can see some activities in the IGP in Morowali projects while we are also finalizing some activities in the construction .
Also now in Morowali, we are moving toward to second phase of mining development for us to be able to deliver the limonite ore to our HPAL plant in Sambalagi. In the picture below, also that we can see Sambalagi progress, some sulfuric acids, some construction activities in the ground for autoclave and also for some other facilities that are going well on that constructions. But again, the plan still to have first mechanical completion by Q4 2026 for Morowali HPAL plant. In Pomalaa, as I mentioned earlier, there are some pictures that you can see also there. We are already starting the first order delivery to HPAL plant for us to prepare for Q3 first mechanical completions. Good pictures in the line of ports down below and also of the HPAL that you can see those area.
In Sorowako project, we are starting also to stockpiling the limonite, which is already reaching about 3 million for us to prepare for us to deliver to our HPAL plant in Sorowako. Which is in the pictures below, you can see also three autoclaves that is being fabricated in China today, and they plan to deliver to Sambalagi by June or July this year still, as I mentioned. I think that is all of the progress of the three growth agenda in ours. Again, in overall, that is still within our plan, and we are expecting to make things moving according to the way that we agreed with our partners. Thank you. I think next, move to Vinicius for updating some.
Okay. Thank you, Pak Asril. Good afternoon all. For those who didn't know me or don't know me, my name is Vinicius. I used to be COO and then Project Director. Now my role is helping the company to progress on our journey to go downstream in the nickel. Today I brought some two slides for us to understand a bit what's going on in the nickel market, especially on the HPAL. Also what is the trend ahead of us in the next, let's say, coming year and one or two years ahead. I will also talk a bit about the battery market ahead. Let's start with this one. You all know we are doing to the reducing ore quota, and also with the new basic market price, so LME nickel price goes up.
The good point of this story is that the market was very high oversupplied before. Now we see a trend that the market will become less oversupplied. There is a consensus among the analysts that this wasn't a good point benefit for the nickel industry. The market is more rebalanced now, and this will bring, for the medium- and long-term expectation, to keep price at this current level or even go a bit upside. That's a good point of view. Also, I would like to bring analysis on our expectation for HPAL cost. As you all know, we discussed this in the previous quarter analyst call. Sulfur was, on that time, really escalating the cost, and now we see sulfur touching $1,200. It's really going through a very high price.
As we mentioned before, sulfur is not only related to the Strait of Hormuz closure. We mentioned that and we talked to some analysts and understood that some of the refineries in Middle East were deeply affected due to the conflict. It is expected that in the short- term, even with the Strait of Hormuz opening, we will still see a scarcity of sulfur in the market. We were in China, me and Pak Asril also last week, and we talked a lot with our JV partners and some people who really understand about the industry. What I would like to say is that HPAL is also evolving as time passes by. I could give some examples that the size of autoclave that as you mentioned here, so it's getting bigger. Also, the technology is recovering more nickel, more cobalt.
The next stage for the HPAL, we will see HPAL recovering sulfur from everything that they are now throwing away. For example, in the tailings, we have currently 6% - 7% of the tailings have sulfur. It's a huge amount of sulfur and also has iron, 35% -3 8% iron. Huayou expressed to us that they are doing a test now, a demo plant trial, to melt the tailings and reprocess the sulfur in the gas to transform it to sulfuric acid and use again in the HPAL. It's not a secret for everybody, but what we are going to see in the coming one or two years is that the technology will start recovering sulfur from everywhere rather than the fossil fuel. Pyrite already happening with Merdeka in Morowali, but now we will see the tailings being reprocessed.
The good news is that doing a simple calculation, we will see that this investment on recovering the tailings, we are talking about a payback of two years. Counting a price that is reasonable, I am talking about $700, $500 as a long-term price for sulfur. It means it will trigger for this investment to reduce the dependency on the Middle East sulfur. This is a good news, but this will come after one or two years. In the short term, we will see a bit pressure mainly on the physical availability, but this is already managed by the players now reducing a bit capacity to wait until they come with this approach. The point is that there is solution and technology will evolve because of this trigger, of this need for sulfur. We can also, I put here a bullet point.
We can also mention that some projects that we are going to see, it will add HPAL together with the side-blown. So that when you mine the limonite, you get the saprolite, you process the matte, and you recover the gas and produce sulfuric gas for the HPAL. We will see a fully integrated project, HPAL matte recovering sulfur, and this will be more integrated and giving more cost advantage. That is the point of view. Regulatory triggers, but technology evolve and move ahead for equilibrium. The next slide, I would like to mention a bit about what we understand is going on especially on the demand for battery. We also had the opportunity to talk with our partners, the Korean partners, especially in China. What we learned is that there is a huge demand growing for battery storage station.
We already know that LFP is dominating the battery storage station. What is new for us is that there is a need as well for battery storage station with some nickel, which I can say that is some battery storage station that will demand high intensity energy. To everybody we talk about this, they compare LFP and NCMs, diesel and gasoline. They will always coexist at the same time because there will always be a need for high intensity energy. It does not matter if it is in the car, but now we see more moving ahead in the AI servers for this battery station. We could see already a fabrication of one type of nickel that fits for this kind of servers as you, nickel ferro manganese.
NFM, it is already coming with 30% nickel being produced and fulfilling the need for this battery station, which is good. In the end, I think I will finish here and move ahead with some question or some comments. My point is that it is not about volume anymore because we see that the world is already fulfilled with a lot of volume. But we are talking about now the right nickel, a sustainable one, the one that will bring, let us say, requirements for Europe or U.S., or will bring a low carbon content. This will feed this new market, this premium application that we are talking about. The world does not need more nickel. The world needs the right nickel, a sustainable, integrated, and competitive one. That is it. I know that everybody is excited about this market.
But we talk to the Chinese partners, with the Korean partners, and we talk about the Western partner as well. They all confident in the medium- and long- term. The market will find a way on the sulfur, will find a way as well. And we always have the nickel opportunity for these applications, high energy-based applications. That's the message. Let's look more ahead and try to understand the whole picture. Thank you.
Okay. Thank you, Vinicius and all the BODs.
Yes. Okay. I think before we go to the Q&A, I think just would like to provide a bit of recap. But I think we all believe in the long-term value of the nickel itself, right? I think Vini mentioned that as industry fundamentals change, technology adapts. Everything on the long-term side, we believe that it's basically a good adaptation process as well, and it's showing good progress. For the first quarter itself, I think it reflects good result. I think profitability shows that it is within the range that is, especially when compared to prior- year, it's showing a really good performance amount. When it comes to delivery, Asril already mentioned as well, that the foundation that the company has promised is showing good result as well in terms of progress on the ground. Abu showing before that for the nickel matte existing operation, it showed resilience.
I think it is actually looking good, right? Later on, I would believe that there will be some question, especially on the regulatory part. But we truly believe that, at the end of the day, the long-term view of nickel is on the positive end. And the progress that have been made showed that day by day, we showed positive progress, and a new baseline going forward for PTVI. Thank you very much. Now maybe I'll pass it back to Andaru for Q&A.
Okay. Thank you, Rizky. Thank you, everyone. That was very insightful presentation. Okay, so I'm going to open the first Q&A session. I will encourage everyone either to raise your hand or you can just put your questions into the Q&A chat box. Okay. Wait until someone. The audience will synthesize all the presentations. Okay, so we have the first questions. First taken, this is from Adam. Question will be: Any opinion regarding the windfall tax and the newly proposed nickel royalty?
Right. I think all of us just got out of the call because it was a 2:00 P.M. call and it just finished. We're actually still trying to understand fully the implementation of the new regulation, which I think, if I'm not mistaken, is going to be implemented in the 1st June of this year. I think when it comes to nickel matte, fundamentally, there's no significant change. There is no change fundamentally in the form of royalties, I think, for nickel matte. Which I think just a bit of a highlight when it comes to 2026, nickel matte is still being considered as backbone of operation for PTVI, right? But when it comes to the commodity of ore, nickel as an ore, there is actually a bit of a shift, right? What we see is that the feeding is changing, right?
What previously was probably a bit further from bracket to bracket, now is actually being more squeezed. Meaning that the change within brackets will reflect a more sensitive change in royalty implementation. For the direct impact, as far as our understanding today, the current pricing of 18,000-20,000, there is a bit of an increase of 1% in implementation. Yes, there is an impact at the current pricing level from the previous royalty rate. I think one of the key highlights here that we need to take a look is that the government is showing a shorter bracket within each classification of royalty, right? Meaning that the volatility is actually expected in such direction. Just trying to give you a bit of an understanding.
The previous one, it was a 4,000-7,000 gap between each royalty bracket, but now it is actually showing only 3,000, 4,000, 2,000 even to 4,000 of changes going upwards. I think there is a signal there that the government is trying to capture value, which shows as well that there is a fundamental shift expected from the point of view of the government. What I am trying to understand is, of course, with the implementation, as mentioned before, there is a bit of an increase, especially on the ore side, of 1% at current price level. But the outlook is actually the intangible signal, I would say, that is actually being reflected by the shorter gap of increasing pricing. We are still digesting, but later on, maybe if we have any further information, we will try to provide our insights going forward.
Thank you, Rizky. That was very fresh from you, Rizky. Just finished the meeting with the government on that one. Okay, next one, there is a follow-up question from, I think this one coming from [Taspahan. From Eirine.] Okay, any color on potential upper and pricing scheme regulations referring back to the old schemes, even derivative HPM margins?
Yeah. I think we have been hearing that there is an active discussion going on. We have not heard a formal discussion, to be honest, on this topic. I think at the end of the day, the discussion between the players and also the regulators would be supporting the long-term industry view. I think Vini has mentioned that there are some constraints, especially structural constraints, with what is happening on the ground today. It would require a deeper discussion to actually end up at a correct implementation of HPM. We are still waiting for a formal one. But yeah, we have been hearing that there might be a discussion on that topic.
Okay. Next one. Any guidance on the cash costs for second quarter and third quarter?
Yes. For cash cost, this will be driven by several factors, right? The first one would be on production side. I think, Pak Abu, we have mentioned that we're quite relatively on track for the full year. So first quarter showed a good result. However, the first quarter is actually coming with a furnace rebuilding glitch. So there's actually a capacity constraint in that sense. So we expect more volume coming in the following quarters. Then there will be an impact coming from commodity prices. I think being one of the energy costs, which is probably going to be affected by the recent oil price, and then also the sulfur price that is actually affecting the market. I think when it comes to sulfur, we've mentioned before that from an inventory point of view, we have a long-term view in that, so we're relatively safe.
Maybe Pak Abu later on can elaborate more as well. For the current oil price. Inventory, we have a good inventory to begin with, and the pricing probably would have an impact. But what we see as well, the element cost support is for you there. So we try to manage still the cash cost within the full- year guidance. Hopefully, we can still achieve that, and hopefully everything when it comes to the uncertainty can get resolved anytime soon.
Thank you, Pak Rizky. Moving on to the next one. I think I will ask Vini to answer this one. So when can we expect the integration from matte smelting to HPAL? And how big a sulfuric acid production can we expect from this method?
I think the integration matte with HPAL, it's easier. We see that Huayou already pretending to put six lines in Pomalaa. Adding the HPAL together with the side-blown, you get this production of the sulfur gas. You asked how much. You can get 10% of HPAL needs. Integrating side-blown to HPAL. But the biggest part of the recovery that you get is not through this integration. It's through the melting the tailings, recycling the tailings. Recycling the tailings can get you up to 40%-50%. This integration can give you 10%. This is why when we talk to Huayou, they have an ambition to recover 50% of their sulfur gas through this integration and this circularity process. Which will benefit not only in the cost, but will have a great benefit in terms of ESG.
Because as you can understand, tailings will not be generated anymore. We will recycle back the tailings. Sulfur will go back to HPAL, but we will also have a free iron production and slag production. Everything will be more environmental friendly with this integration.
Okay. Thank you, Vini . Hopefully, that address your question . Next one, we'll go to Arianto for your questions. This is regarding the royalty rate for Limonite. Is it fixed at 10%, or is it subject to progressive rate up to 15%? Maybe Sandra, you want to take this one?
Yeah. For the royalty rate of Limonite is still 10%. But if that is sold to battery, vehicle battery, what do you call it? The EV-based battery, then the royalty rate is at 2%. I think I answered your question.
Yeah. It's fixed at 10% here.
Yeah.
Unless it will be sold directly to like an EV-based battery.
That would become 2%, yeah.
We also have some questions in the Q&A box, but I think that's also similar questions with the guidance on the cash cost previously. So on the C1. Good answer. Anyone else like to ask or raise questions? No? I think we have a good explanation, Pak Rizky and everyone.
Oh, there's actually.
Coming from Mercy. How much is your current blended nickel or cash cost?
Yes. For Pomalaa, as mentioned before, it was $13. $13 for it's blended for getting both. So that's for Limonite. For Bahodopi, the last one is $28, and the other for Muhammad Asril .
It's clear. Not blended with the limonite today.
Yeah. Blend is not.
It can be very similar with Pomalaa for Bahodopi. It's a bit higher because, Pomalaa is much greater than Bahodopi, which is about 13. It includes royalty.
Includes the full royalty. Yes.
13.
I think that same information also on the slide deck that we already shared to you.
Yes.
Before this, I think the market is still adjusting its price here.
Especially with the new regulation.
Royalty. I think that there's a bit of a comment again on the regulation, right? When we anticipate such regulation, let's see it on the anticipated events, right? Again, there's a bit of an impact, and we believe that the existing cost structure is quite strong when it comes to absorbing the impact. The key message is actually showing the shorter bracket amount, right? So it's basically trying to capture more value within each bracket. A shorter bracket, meaning that there is more volatility expected on the upside.
I think that reflects the intent. Probably, a good discussion going forward is trying to understand what is actually the intended value capture that the government is trying to look at, which I think is very positive in that sense. Let us not forget that Indonesia commands 60% of global supply. Let us not forget that we have an impact when it comes to controlling the supply and which eventually will reflect into the pricing environment as well. I think, just trying to give a bit of a key takeaway from the previous call, which is just fresh from the oven.
Yeah.
Yeah, I think, it is a new implementation, but I think the intent is still the same.
Yeah. Okay. Good. Thank you.
Just a follow-up question.
Okay. There's another follow-up question. I think this one probably to answer your HPAL project, for maybe Muhammad Asril.
Yeah.
Pomalaa.
Okay. Especially for Pomalaa, we met with our partners last week, actually, and I being inside, actually yesterday and today in Jakarta. We had to making sure that the progress in the ground still as per plan. Even for Pomalaa, I can say that it's ahead of the plan, actually. Because we are opening was Q4 and today's Q3 2026. The third close. The same with Sambalagi. Sambalagi is still the same with the plan that we are actually putting before.
Yeah.
It's still in Q4 this year. The progress in the ground is still in the picture, still remain the same. We don't see also any fatal things that might halt the projects to go in that sense. Especially for Sorowako Limonite, that's the last part of the project that we have put into the constructions. All of the critical permits and licensing already being obtained on that. It's matter now of course construction of the facilities today.
Yeah.
Just to add on as you pointed. There is a benefit of our ore compared to the average of ore in Indonesia. Before we didn't have a huge advantage, but now with the sulfur price going up. You all know that as high the MgO content in the limonite, as high sulfur you need to leach the MgO. Our MgO in Pomalaa is about 1.7%, so the average in the market for limonite is about 3%, so we have a big competitive advantage. Which means bringing Pomalaa and our other projects in, and put in place, we'll put a plant that has a competitive advantage in the current scenario, which has a very cost pressure. It's a huge advantage having ore that do not demand 1 ton of nickel, 10 tons of sulfur. For Pomalaa, due to this lower MgO, we will have less.
[inaudible]
Amount of sulfur demanded.
Okay.
The ratio is not 1 to 10. It's lower.
Okay.
What's our grade? 1.7?
Yeah. Limonite in Pomalaa will be around 1.7%.
1.7%. Compared to market.
Market about 3%.
3% . 40%-50% .
Yeah.
Okay.
This is why they keep saying that Pomalaa and our blocks has one of the best ore. Not only in terms of nickel, but due to this MgO advantage now. It's a really good advantage for the HPAL.
Yeah. Especially in Pomalaa on that, because our partner also building now, as I said, local permit is there. That is part of the integration things that Vini mentioned. Having HPAL online at the same time also several permits online, that is the advantage of integrating and recovery of the sulfur. That is what Vini mentioned, to be able to recover those maximum.
I see.
That is actually making high confidence that stage four plant still flying because of that full process. Also additional thing regarding to the ore quality from Pomalaa, that is what Vini said. Thank you.
I think there is a follow-up question from the tier networks.
Oh, sure.
Asking about the CapEx schedule for full- year 2026 and the next few years. Rizky could cover this.
Yeah, sure. Pak Andaru, do we have the slide here for the CapEx? Well, I don't think we need to show the slide. But I think for this year alone, I think our target for CapEx is still around $670 million.
Yes.
That is still aligned with our initial target on that one. The reason because we still need to conclude most of the Bahodopi mining this year, and then follow with the Pomalaa mining completion. Next year, the CapEx in total will be around $1.1 billion, which majority of it consists of our equity participation to some of our HPAL deals in that sense. So during 2026 until 2028, it is still investment year for PT Vale Indonesia, so we expect that more and more CapEx will come for the next few years.
Okay. I think another question on the guidance for nickel ore sales. I mean, securing the additional RKAB for this year, what is the company's strategy on that, [inaudible]?
Yeah. For sure that everyone knows that we are actually having approved approximately 30%-40% RKAB this year, against the total budget that we submitted before. In the progress of Abu also presented that our actual production is also still as per plan as of today. For the next submission of RKAB. Actually that the team in the ground today is finishing off a lot of necessary of the documentations that we prepare for us to be ready to submit the RKAB. So on that sense, that we are actually ready to go. Now it is basically for us now to keep monitoring what is going on in the MEMR. Actually, they will not appear that there will be another policy things that are going to be issued. But again, our engagements, our communication is still ongoing to making sure that we are aligned with that.
The expectation, if that issue is closed, then we can submit our RKAB as soon as possible as per plan that we are actually putting in the past for full- year
I see.
2026. Especially for Pomalaa and Bahodopi, because f or doesn't, no changes in Sorowako, right? Sorowako is still 100%. Being approved already, the 30% - 40% was only for Pomalaa and Bahodopi.
Next one probably coming from Jeremy. Sorry, Jeremy. There's one thing, just want to verify on the new 2% cobalt byproduct priority for nickel matte introduced during the previous.
Yes.
MEMR call. Does it involve nickel content and cobalt content or it's just nickel only next year replaced by HPAL?
Yeah. The cobalt content in the nickel matte will be 2% and be separate from nickel matte. Then nickel will still at 3.5%.
2%.
Yeah.
So will be separate.
Separate.
Separate from nickel. Okay. Okay. Thank you, [Pak Sandra]. Next one on the Q&A. Given recent regulatory changes of HPM, how do you anticipate this could impact nickel ore price to absorb higher costs? Sorry, could you show us the different higher costs? Yeah.
It is in.
In this support.
What was the question?
Given the recent regulatory changes, how do you anticipate this could impact nickel ore price to absorb the higher cost? Do you see any potential demand destruction for customers from higher prices? Right. I think the question is especially on the nickel ore price, right? I think when it comes to nickel ore price, we need to differentiate between the pricing of the limonite and also the saprolite, right? For saprolite, it has been showing a positive momentum. Even with the new HPM implementation, I think it has not changed the fundamental pricing, because the previous transaction was already commanded a relatively high premium environment, right? We believe that the condition, especially when it comes to quarter one, and we still see that in the quarter two, it's showing a positive momentum, right?
It's a good pricing environment. When it comes to absorbing the cost, it's a good increase and also a buffer to actually accommodate the increase in input pricing costs. But when it comes to limonite, I think this is something that we're waiting for the implementation, right? I think in Vale we have the privilege because most of our limonite sales is on the second half of the year, right? Our Pomalaa operation will be commencing mechanical completion in the third quarter, meaning that we actually have time to understand the implementation, the real implementation of the pricing. Probably if there is such shift in pricing environment or regulation, we have enough time to prepare ourself as well. So I believe that it's actually a good position for us, both in the limonite and also the saprolite.
Quarter one was a good premium environment. Quarter two, still showing a good premium environment. So to that question, we actually have a good buffer to absorb the higher input costs.
Thank you, Rizky. I think that's the last question that we have for today. I think before we close the call, you want to say something? Or any closing statement?
No, I think I've already covered it. Again, everything on the long- term value, on the long- term view of nickel, we believe that it's still on the positive side. I think Vinicius mentioned specifically when it comes to technological advancement and innovation, it continues to show positive result. From a business momentum point of view, I think Asril and Pa Abu mentioned that the readiness of the company in terms of meeting the commitments, in terms of delivering the projects, it showed positive results, meaning that the new baseline of the company hopefully will show some fruits in the near- term. We are growing with three engine nowadays. It's not the only Sorowako. For 2026, we're seeing a full three mining operations for Bahodopi, Sorowako, and Pomalaa.
I think it is still exciting environment for the company and a good forward-looking momentum as well.
Thank you, Rizky. All right, everyone. With those, I think the session is finished. I think we can close the meeting for today. Again, thank you very much everyone for joining call, and looking forward to see you soon in the second quarter earnings call. Thank you.
Thank you, everyone.
Thank you.
Thank you.