Good morning, everyone, and welcome to our Capital Markets Day. We are very excited to share greater insight into our mining segment. But before I do so, safety is a core value for Omnia, and I would like to share a safety moment. Today, I would like to speak about fatigue management. Fatigue can impair judgment, slow reaction times, and increase the risk of accidents, so it's crucial that we recognize the signs of fatigue and address them properly. Ensure that you have adequate rest, take regular breaks, and avoid overworking for both your mental and your physical health. Before we start with today's proceedings, I just have some housekeeping rules. In case of emergency, the emergency exit is at the back of the room.
Please file in an orderly manner outside the room, and you will be directed to a safety point. Bathrooms are at the end to your left. With that, I just want to take you through today's agenda. We have our CEO, Seelan Gobalsamy, who will take you through an introduction and overview of Omnia and the mining segment. Our MD for mining, Ralf Hennecke, will then take you through our strategy and growth prospects for BME. This will be followed by details on our technology and innovation, which will be presented by Nishan Hariprasad and Dirk Voigt, and Thomas Gustafsson, our CEO of Hypex Bio, will provide you with details on his business, and he will then hand over to Seelan, who will conclude and open the floor for questions. I will now hand over to our CEO, Seelan Gobalsamy.
Good morning, everybody, and welcome here to all of our shareholders, our guests, and specifically, the BME management team. I was saying I've never seen so many engineers in suits and ties before. In fact, Dirk sitting next to me, I've never seen him in a suit and tie, so I'm sure this one is fresh off the... I don't know what it is, fresh off the Woolworths store or some shop. But to all of you, please, make yourselves comfortable. Cape Town is an absolute nightmare at the moment. There's no space available. There's no rooms available. So, this is the best we could do. Welcome as well to Thomas Gustafsson, that Nirina mentioned.
Thanks for making the trip all the way from Stockholm here, and also to Agusman, who is our head of our Indonesian business. Welcome, and thanks for being here. I'm just gonna kick off with a few slides, if that is okay, and just to contextualize our investment in BME and how it all comes together. So firstly, what you all know is we've spent a bit of time in refining our purpose, and it's very important to us that a company's purpose is well understood and entrenched in its way of doing things. And that purpose is innovating to enhance life, and together, creating a greener future.
Creating a greener future is not something that we do just in our operations or in our plants or in our processes, but it's something that we want to embed, and we have embedded in both our agriculture and our mining business. And today, you're gonna see an incredible example of that in Hypex Bio. In this purpose, what we focus on, focusing on is doing something which is incredibly noble. It's ensuring food security, it's ensuring mineral extraction, and ultimately ensuring livelihoods and economic growth.
You know, when you look at our value propositions, and you look at our investor proposition, you know, we are operating in very primary sectors, and we have refocused the company to create propositions that will win in all of those sectors, whether it comes to the chemicals businesses we have, the agri business, and today, the mining business. Nirina started with safety, and you know, I just wanna say again, we've got a few values in our business, and the first one is safety. You know, we hold a moment of silence for all of the folk that lose lives and have been involved in terrible accidents that we read about. Most of you would have read about an accident in Australia.
And in our business, you know, we stand by a philosophy that no ton of emulsion, you know, no ton of fertilizer, or no flow bin of chemicals is more important than anybody's life, is more important than anybody's eye, is more important than a laceration on anybody's skin. So this is something we measure. We measure leading indicators, we measure lag indicators. We do a lot of root cause analysis, and I think we ensure that all of our processes and all of our products are underpinned by a deep sense of safety.
Some of you are frowning around what I'm referring to in Australia, but some of you might be aware, and Ralf can talk a little bit about this, but you know, there was a road accident of an AN truck in Australia, unrelated to us. But I think we stand together in solidarity with the company that was involved in that, and we all enhance processes, because we never want things like that to happen. I think what you can also see is our businesses, whether it's agri, whether it's mining, or whether it's chemicals, have an incredibly good record, but we never relax with that and say we've arrived. We've never arrived from a safety perspective. Just moving a little bit forward to ESG.
You've heard us over the last few years speak over and over about what we're doing in our own plants and our own facilities. We've invested in reverse osmosis water plants, where we've taken the water from our cooling towers and reusing them. We've invested in solar. We currently have 10 megawatts of solar in Sasolburg, and another 10 coming. We focused on reducing CO2 emissions. For those of you who studied fertilizer a little bit deeper, you know that AN-based fertilizers have lower emissions than urea-based fertilizers, and they're better for soil and better for agriculture. So in our agriculture business as well, we focused on efficiency of water, efficiency of chemicals and nutrients.
I think in our explosives business, which the teams are gonna talk a lot about today, you know, we're focusing on more precise blasts, on more accurate fragmentation, using used oil. I chuckled the other day when I went to visit Dirk, and he said we went through the Dryden plant, and I've been there a few years ago, and it's a few years later, and I'm popping in. He was telling me a competitor somewhere actually dyed their emulsion to make it black, so that it looks as if they're using used oil, but they're not. I laughed about that, and I said, "You know, that's the difference between us and others.
You know, when we say we're gonna focus on safety, or when we say we're gonna focus on ESG, we will do it, and we will do it to the best of our abilities." So, you all know that our emulsion uses used oil. It's dark in color. It's better for the environment. It saves a huge amount of water, and also, it's more stable, which we know. So all of our customer propositions are also underpinned by a number of ESG initiatives. If I move forward, so today... Last year, we spoke to you about AgriBio, and we did an agriculture capital markets day, and we promised you, this year we will talk about BME, and BME is our fastest-growing segment.
It is a business that internationally is growing faster than any part of the group, and it's a business that we've been focusing heavily on to bed down our initiatives in Canada, Indonesia, and to entrench our value propositions in on the African continent. So today is focused purely in that direction. You're welcome to ask any questions or take us into any other part of our business a little bit later. So where did this all start? This all started roughly 40 years ago, when Omnia acquired BME, and at that stage, you know, I would take BME as being a little bit of a disruptor, a little bit different, doing things differently, and the group decided, obviously, to bring that business in.
Since then, we invested in the business. We built additional nitric acid capacity. We invested in detonators. You know, we launched the AXXIS detonator, and we expanded the business initially on the African continent, which Ralf drove a lot of, and then a little bit wider into Canada, the U.S., Indonesia, and Australia. I think what we did know is that with the underpin of our manufacturing facilities in Sasolburg, you know, we enhanced the competitive advantage of our explosives business locally. But what we also saw is, without those facilities, whether that be in Canada or in Indonesia or in Australia, this business had a right to win. It was winning contracts.
It had a management team that were agile, that were entrepreneurial, and it had certain technologies and certain processes that were up there, you know, with the Orica, Incitec Pivot, and others, so we continue to invest in the business. The business itself, if I just go back five years, was run separately, so I think you would remember, for those of you who have been long shareholders with us, our previous management ran the company completely separately, a hub-and-spoke model, and I don't think there's anything wrong with that, and I don't think there's anything wrong or different with the way we're doing it, but we're a little bit more integrated.
This management team have integrated the businesses a little bit more and have a shared service where that works, and use central supply chain where that makes sense. So, what we've done is we've fostered and loved the business a little bit more than it was five or 10 years ago, and we brought the management team closer into the Omnia group. What we've seen over this period, we can choose a different dimension at the bottom, but if you take, you know, 2018 to 2024, the business has grown, you know, from a ZAR perspective, quite significantly. And we continue to invest in the business, we continue to build modular plants across the world.
Ralf will talk to you about a Hypex Bio plant that we're building in Canada. We renew our fleet. We've got our own fleet management system and trucks that we build. Our detonators, as you know, are some of the best across the world. We've got detonator manufacturing machines that some of them don't need any human involvement or very little human involvement, and it's a very pleasing sight to see. What we did since then, so in the last year or twelve months, we've asked our mining chemicals business to work closer with BME. We changed the reporting line of that business to Ralf. We have some of those executives here, Lefa. Do I see Lefa? There he is at the back.
So he's responsible for our mining chemicals that go into Namibia, that go into the rest of the continent. You know, and our thinking is to see how those chemicals can be attached to our BME proposition to other parts of the world. So that's probably the last dot at the end there, where we are expanding that business further. We'll talk a little bit about it today, but not in a lot of detail. And what you can see is there are huge opportunities for that business, and we've also shown some incredible growth, and we will show growth in that business going forward with contracts that we've already secured. So if I go to BME, I already said that it's a business that we see that has a right to win. It's got a great safety record.
You know, it's got leading positions locally in the South African market, and it's got some technologies like the dual salt, the used oil, and others that the team will talk about a bit later. We also are not just talking about what we will do, but on the right, you can see an element of delivery, where we're showing profit growth in this business, and we're showing how the focused business model is refashioning the earnings base of the Omnia Group, where the earnings base of the Omnia Group is more and more being contributed from the mining segment. We think that these global competitive solutions will continue this path of having us winning, not just locally, but also globally. So let's talk about the market itself.
You know, where is the explosives market? And, you know, do we see growth in it? And, you know, why do we want to continue to invest and do what we're doing in this space? So we've put out a slide here just to talk to you about the market demand, and you can scan through this a little bit later. But globally, we think there's a few dynamics at play, and I'm gonna go to another slide just now that will talk about the competitors. But firstly, we believe that the demand for explosives, the mining sector, yes, it will have ebbs and flows based on commodity prices, but there will be a strong demand for explosives. There will be a strong demand for mining chemicals going forward.
Those minerals are needed, and, you know, when someone was writing a few notes for me to speak, she used the phrase of, you know, everything human beings use, it's either growing, you know, from an agriculture perspective, or it's taken from the earth and, you know, from the earth and blown up and taken from the earth as a mineral, and that's such an insightful thought, but, you know, we certainly believe that the mining sector will continue to grow. It might grow in different minerals, in different spaces. It might grow in different parts of the world, but we believe there will be a huge demand for products out of BME and Hypex going forward.
There might be a change in metal, metals and minerals, but it will certainly be there going forward. From a competition perspective, which we believe this is also another area that enhances and adds to the reason why this business is so attractive. You know, broadly, this market is dominated by one or two large players, and, you know, as it goes, you know, as it tails off, there's a number of small players. And, you know, when I looked at this slide initially, I thought, well, most of you know that our plants sit in our agriculture segment.
So, you know, if we could just take a pen and scratch out how much of that should maybe be in the BME segment, you know, it will move BME a lot further to the left of this chart. You know, don't maybe look where BME is placed because the segments are all... You know, everybody measures things differently. But what you can see is there's an opportunity for consolidation. There's an opportunity for the large players to be disrupted. And I've probably shared this experience before. You know, when you talk to the tier one mines, they're crying for an alternative to, you know, to these large players that are so strong and dominate their supply chain.
It aids with their redundancy of supply, and it de-risks them, you know, should they be able to move between players, so we believe where BME is, there's certainly growth in this space for us. There's certainly opportunities for us to be involved in some of that consolidation, and when we think about that, we have to do that clearly in a very responsible, considered way, and what you've seen us do is invest from a joint venture perspective, from a partnership perspective, and continue to grow our business on that basis. I think what we also know is the valuation of our group, you know, is still being thought about largely as an agriculture business, and also there's an extreme discount in terms of that valuation relative to global peers.
So on both of those scores, you know, we see a significant uplift as we grow the earnings from our explosives business and as our mining, chemicals, and explosives business contributes more to overall growth in our earnings and growth in our revenue. And we put out a chart here just to show you a little bit of that. You can see the level of potential upside that is there. Glenn did a few multiples on this side, and on that side, we try to, you know, show a few of the global competitors and where they rank in terms of multiples. So we believe investing in this business, growing this business, and showing you how it contributes to our earnings will, in the medium term, rerate our entire company.
Just if I move to summarize, I think what you know is the Omnia Group has been very carefully managing our business. We've been focusing very heavily on cash and returns. We've got a very strong agriculture business that we've demonstrated removing some of the cyclicality out of it, and we've demonstrated performance in rising commodity cycles, volatile and falling commodity cycles. What we're showing you today is our focus in our mining business and how that has the same positive impact on our earnings. It reduces volatility. It's been growing, which moves us to be a business a little bit less dominated in agriculture only. It reduces the cyclicality.
So Ralf will talk to you about profits we make, not just in the ammonia value chain, but in other parts of BME. The mining business also has faster cash conversion cycles. So if you look at our balance sheet and our cash generation year on year, you see that our working capital and our cash that's generated out of the business has been improving, and part of that is also due to our focus and our investment in this business, and I think what we know is the mining businesses attract higher multiples than a traditional agri-only business.
I think we've got to do a bigger job of showing you that, and, you know, also, at some point, you know, trying to show you, you know, how much of our total is all, you know, in, in mining. I guess what we're also saying is global megatrends support this industry. So whether that be metal extraction, or whether that be competitors wanting, different service providers, or whether that be diversification of supply chain, and we see it locally. We see that the strength of our supply chain, our manufacturing, our ammonia value chain, the ability to bring ammonia in from the coast, to move it around, convert it to product, and supply both on a wholesale basis and a direct basis through BME to mines, has put us in a very strong position.
We also, you know, have this inherent investment in our business, in R&D, in technology, in both businesses. But clearly, in the mining business today, we're gonna show you, you know, where we've invested and how that has the ability to enhance the Omnia group. So I'm gonna pause there. Hopefully, what you will hear today is a story from our mining executives. We never do a roadshow with so many engineers, so now, you know, we usually waited to the accountants and the chemical engineers, but now we've got the explosives engineers and the mining engineers here, so the room is...
You know, we should have put one of those scanners out to check that nobody's come in with a bomb or a stick of dynamite. So I'm gonna hand over to all of our expertise, Ralf and his team, and they're gonna talk through in a little bit more detail how we win in this mining segment, what our new technologies are, and also then just share, you know, in a lot more detail than we have, you know, what we're doing and where we're doing. I'll come back a little bit later for some questions and some general chat. Thanks, Ralf.
Thank you, Seelan, and already some very strong messages that you sent through. You stole a little bit of my thunder with some of the positives that you were talking about. But good morning, everyone, and thank you for joining and showing interest in the Omnia mining segment. As Seelan said, this is the first of such roadshows, and I hope I can share some interesting information with you today. I would like to take you through a little bit who we are, very, very high level, where we do come from, but spend some more time on our strategy, our market positioning, specifically, our incredible value proposition.
Basically give you reasons why we are winning in the market currently, as Seelan was saying, but more importantly, why we are going to keep winning going forward, so a short overview of who we are. I'm not going to spend much time on the history. Seelan has already given you some timelines in that respect. But one thing is that the industry, and a lot of people in our company doesn't know, it's just through institutional knowledge, is that we were actually brought to life in 1984 by a company called Mining Services International. And MSI, as they were called, is a Utah-based Salt Lake City company, and they were specializing specifically on emulsions. And they were relying specifically on a cold emulsion technology.
Now, I'll let Dirk explain later what that means, but what it means in general is, it comes with a lot of benefits in the market. It, the emissions are less than any other emulsions in the market today. The stability of the product, the transportability of the product, the pumpability of the product, the storage and shelf life of the product, and ultimately, the use of used oil, as Seelan was saying, in that product, is something that our competitors are striving to achieve. All those benefits, and they do not get it right. So we've got a lot to thank Mining Services International for their technology before Omnia Holdings bought the company in 1987. After the acquisition of the company, the mining company, or BME, has been a division of Omnia Holdings ever since.
What we do is we specialize in blasting solutions, and we specialize in the, now in, mineral extraction as well. Initially, we were a surface specialist company, with the bulk emulsions and the technology that we did carry through from MSI, but very soon realized that we need to do more on surface if we really wanna be taken seriously in the markets. So we ventured into the underground space, the civil space, even quarrying. Throughout the years, we worked very hard on our technology and digitization, and I'll refer a little bit to that, just now as well. What are we known for? Basically, very fast mobilization, operating remotely, and building infrastructure quickly.
And we can only do that, and it's a thing to note, that we can only do that because we've got the emulsion that allows us to do that. And transport over long distances and store emulsions in containers on sea, and on road, and on the mine sites for very, very long time. So I'm talking months, if not years. So there's a real benefit in that. But for us, diversification is key. So we said we're gonna, we're predominantly a South African company. In the early 1990s, we moved into the neighboring countries in Southern Africa, started off in Namibia, Zimbabwe, Botswana, and then gradually moved up the SADC region into today the Congo as well, and West Africa. And a couple of years ago, we decided, you know, we also need to move and diversify into the global space.
We basically prioritized our global deployment or targets through primary markets. With primary markets, we mean we want to have infrastructure established. We are backward integrated into ammonia, ammonium nitrate, either own production through partnership and/or supply, offer the services, offer the people, and offer the commodities as well, but also offer the technology in those markets. Very important for us to understand. We have secondary markets. We said that. That doesn't mean the primary markets are North America, Asia Pacific, and Africa, which is our home base. We said we also want to operate in secondary markets on an opportunistic basis. If an opportunity comes our way, we'll not...
We'll evaluate, and we'll do the feasibilities, but more so go into the rest of the globe and world through our technology, specifically trading models, distribution models, and so forth, if we can. That is what we're doing today. Today, we've got over 350 customers, together with the chemicals business. We operate in 18 countries, and I believe we are extremely well-diversified when it comes to commodities. We've only got about a 15% share in coal supply today, in from an explosives perspective. If you take that into equate that with the global statistics, that is over 50% of the explosives consumption today still goes into the coal industry. We believe that our 15% is quite a good number from a diversification perspective.
A couple of words on our team. Seelan mentioned agile, entrepreneurial, but we're also formal, and we're well-governed. We are proud of a very diverse team. They come from various sectors of the industry, from our peers, from our customers, but also from other industries. I think that is very important, because other industries also bring different perspectives in how an organization needs to be managed, and importantly, some of our experts sit in the global spaces, and I'll allude to that a little bit more just now, but I just want to play one or two videos on two of our leaders and their message to you today.
Hi, I'm Pak Usman, and I'm leading the Indonesian territory for many years now, and over the years, I have been with BME, have seen us grow within the territory with solution and technology that have positioned us for success in Indonesia. Indonesia has been ready to receive a solution partner like BME, and I'm confident that we will deliver to market our impressive value proposition and embed us in this region. At BME Indonesia, we have evolved over the years with a successful strategic partner, MNK, and have achieved many milestones today, which include 15 projects and a growing pipeline of projects. We have implemented a dedicated strategy to leverage local partners to enhance our service offer and give back to Indonesian market, an environment which is in keeping with BME purpose and local value proposition. I'm excited about what lies ahead for BME Indonesia and its stakeholders.
Hi, I'm Michael Wiseman, and I lead the Australia-Asia business at BME. I'm very proud to have joined a successful and reputable business like BME, and I'm incredibly excited to lead our team towards becoming the partner of choice in the Australian mining industry. The recent investments in BME's Australian operations are a testament to our commitment to continued growth in this market. We have secured a unique position in the Australian market as the preferred provider of an electronic initiating systems supply in Western Australia, and in the years to come, we will be leveraging BME's competitive advantages in bulk explosives technology by introducing our market-leading emulsions and our in-house design and manufacture of explosive trucks to the Australian market. These and other strategic investments in an innovative and premium solutions delivery are sure to position us for growth in this market.
Super! Just two quick messages from around the world. We boast also a very strong support team. Every successful company needs a very strong support team, specifically based on a global scale, if you have global aspirations. We'd just like to single out a couple of people here. We've got Scott Scovira in the middle there, a global blasting engineer sitting in the U.S. He today is rated as between the top three to five blasting science people in the world, including Orica's and so forth, so a real asset to have. We've got Tom Dermody, one of the top technical specialists sitting in the U.K. We've got Chris Liebenberg, he's a top software designer, specializing in mining software that is sitting in the U.K. And then we've got Dr.
Rakhi Pathak here at the bottom. She's one of the top product managers for specifically AN related products and emulsions in the world today, sitting in Sydney, Australia, and so we are exceptionally pleased that we've got these people on our side, and they roam the world and help us out in all our endeavors that we do pursue. Maybe just one quick message from Dr. Rakhi Pathak then, before we move on.
Hi, I'm Dr. Rakhi Pathak. I've been with BME for more than fifteen years. I'm extremely proud and fortunate to be part of BME's growth and development during this period. We have surely moved from providing premium products to solving the challenges of the industry with leading technologies and unsurpassed value benefits. Through the expertise and technologies within BME's portfolio, it makes me proud to be part of a business that is geared for growth and intent on delivering sustainable solutions to the industry. Our strategy and aligned technologies really set us apart, with a competitive and differentiated market position to realize a successful strategy execution. Belonging to a sustainable solutions provider, like BME, makes me proud to be associated with a business that has the right recipe for success. Thank you.
Thank you, Dr. Pathak. Very, very rewarding words. It is key for us to align our own value proposition to mining trends that we face today. And this is obviously a dynamic thing. We need to understand what the priorities of the mines are in order to align our value propositions accordingly. So currently, what are they? Seelan already alluded to ESG. ESG targets for 2030, 2040, 2050. How do we play? Can we contribute to those targets that the mines need to set themselves today? There's been a big topical theme about back to basics, especially. It's a bit of a COVID hangover.
It is supply chain security, it is safety, it is quality, it's the trust in your people that set the foundation for any, not only relationship that we have with the mine, but their own drives along those lines are obviously socially very, very important as well. The mining industry in general is suffering from a skills shortage at this point of time. That changes the dynamic on how we operate and engage with our customers. They expect from us knowledge transfer.
They expect from us to do more than they historically did themselves, and so they are forcing us to move from being a purely commodity driver to finding the solutions for them, not only in rock breaking, not only in mineral processing, but also in anything in between, that they want us now to address, either directly or through skills, knowledge, and transfer to their teams. So the customers demand more, and they demand more from their service providers to deliver. And, a little bit ironically, that plays a little bit into our hands because that is our DNA, that we have a very, very strong relationship with our customers and find the solutions now over many decades. It's nothing new.
But what is new, that it is now becoming a little bit more formalized and a little bit more KPI-driven than it has been in the past. Again, what our customers offer after the trust and the basics, as I was referring to, obviously, there are ESG aspects like localization. Commercial cost is very important for the customer, always. Knowledge transfer and all those differentiators that I've been talking to now. Through innovative blasting solutions, optimized extraction, and end-to-end product solutions, we are, together with the customers, transforming the mining industry a little bit, and I'll explain a little bit how we do this. Now, for me, a very important part of this, and I'm very excited about this going forward, are two massive aspects that the customers rely on us to solve for them.
So the first one is, as you know, we are a part of a mining cycle. You start with your geo-mapping, then you go to blast designs, you're drilling, blasting, loading, hauling, milling, and then ultimately, mineral process or liberation. Now, through optimized blasting, we do have a direct impact on the fuel emissions of those mines. So the better we blast, the less fuel is consumed in hauling, well, not the drilling, hauling, loading, and the milling piece. That is what the mines are currently after, and that's what they will measure going forward. For that, you need technology, and the technology that you need is real-time reporting, data capturing, data storage, data mining, trend analysis, leading to predictability in your blast that give you the best outcome.
That is what we do and where we contribute to the mine's ESG targets most, other than the second piece of the puzzle that Thomas is gonna talk later about, the groundbreaking emissions of blasting of nitrous fumes. And through his technology and working together, nitrous fumes will be eliminated. And it's the second part that the mines are looking at today with a very, very close lens to eliminate. So we are extremely excited to partner with someone like Hypex Bio to take that specific technology forward and contribute through Hypex Bio and through our technology in the ESG space. And I believe no other company is as well-positioned as we are currently to achieve that. A little bit on our value propositions, other than the blast optimization and Hypex Bio that Thomas is later gonna talk about.
I did talk about the emulsions already. They are unique. They are really unique emulsions. They've got, again, they emit the least nitrous fumes into the atmosphere because they're a dual salt formulation. They've got the ability to- for us to use used oil. Seelan has alluded to that already. That plays directly in the circular economy of the mines and the environment in general. We have said before that one liter of used oil can contaminate about 1 million liters of pure water. We collect 30 million liters of used oil a year. Now, we can work out how much water we actually save in the environment, but it goes further than that. We find this, through us taking the used oil from the customers, we're solving their problem of getting rid of the oil themselves and doing that at a cost.
So our customers love us for that. We no longer sell only an emulsion into the industry. We sell emulsion systems into the industry, either a underground emulsion system or a surface, under, emulsion system, or a hot hole and reactive ground emulsion system. With system, we mean we provide the people, we provide the equipment, we provide the product, and we provide the technology and services to operate in those spaces. So gone are the days of a just a pure commodity trader that the explosives companies are. The other two main differentiators that we have is the AXXIS system. It is the safest, easiest to use, and most accurate electronic system in the world today, and we are using that successfully in our system.
And then lastly, our manufacturing abilities, and it's not only the manufacturing of plants, but it's the manufacturing and in-house manufacturing capabilities of our trucks or ECUs for underground, and so forth, and our plants that we do build ourselves. Now, from a manufacturing and modular perspective, this is such an important attribute to possess, that you can build modular plants, both from a detonator and emulsion perspective, in any remote area in the world. They are modular, so you can scale up or tailor-make as the customer or the region demands, and that is something that we have perfected. Now, we know our competitors do the same on the emulsion side, but specifically on detonator assembly, I think we are a little bit ahead of that race.
A couple of quick words to the global growth perspective. We have mentioned that South Africa and Africa remains our core, and our core business, but I just wanted to demonstrate with this slide a little bit what we thought about when we selected our primary market specifically. What is important to us is obviously we call it follow the money. It is follow the exploration budgets and spends of where obviously those companies spend most. It is follow where the explosives spend is the highest. It is where are the attractive commodities nowadays? It is a matter of increased returns compared to the margins that you can attract in either South Africa or the rest of Africa.
And then lastly, it is obviously looking very closely at the pipeline of new, not only exploration, but new projects that are being developed, where they are, and on top of that, overlay that with large projects that are already going concerns. And from that perspective, we picked Canada, Australia, and Indonesia as our primary markets going forward. We also said, and I mentioned it earlier, that apart from all our own abilities as a company, it is the partnership model that we prefer to embark on in globalization. And I think the reasons are they seem almost logical, right?
It is local insight, licenses to operate, access to market, easy access to market, relationships that already exist, and ultimately, the knowledge of the market, which is very important from a governance and risk perspective, but also, ultimately, resource sharing with a partner, so we can obviously attract the best returns from that perspective as well. So where do our growth opportunities exist today? The first is, we said we are going to protect the core in South Africa and Africa. What we are currently seeing in our base business and our core business is that we are actually growing, and we are growing at quite an extensive rate now, both in South Africa and in SADC and in West Africa, where there are opportunities.
So we as a company, we respect that, and we will not leave our home base unattended, or it is still pretty lucrative to grow in this market and build scale and fill our plants, as Eden was saying, both from an Omnia group perspective and also our own plants in BME. So that is very exciting for us, and we've signed some nice, big contracts here in recent times, which is great. But let's move quickly and swiftly through the three global markets. I just wanna highlight why we believe we will succeed in those markets. The first one is Indonesia, and it's a fully integrated model that we've got there. We are partnering with the second-largest license holder in Indonesia, and second-largest AM producer in Indonesia.
We're fully integrated. We've got direct access to nitrates, and the ambitions of our M&K partner is. We are predominantly in coal today, to partner with someone like BME, who's got the technology to move them into the metal space. Our pipeline in metal tenders that we're currently building with M&K is phenomenal. We are in the process of feasibility in a lot of those spaces. We've already got multiple emulsion plants in Indonesia that are working, and our ambition is to in the probably in the near future, and I must still talk to Eden about this, but be first movers in electronic detonator assembly and cartridge production as well, because those plants are not available in Indonesia.
That could set us aside as a next step in that partnership to grow something substantial. In Canada, we are partnering with Consbec, who is the largest civil drill and blast company in the country. They've got a phenomenal footprint across the country. They've got phenomenal relationships in the country. What makes us proud today is that together with Consbec, we built firstly the first electronic detonator assembly plant in Ontario, and Ontario is one of the three major mining markets in Canada. We built the first non-electric detonator assembly plant, the first movers in three emulsion plants in that region, and our aspiration is to be the first entry with Hypex Bio and infrastructure, with a groundbreaking technology into Canada over the next six months. That just sets us aside from the rest of the industry.
So again, what is the motivation of the Consbec partner with us? They specialize, as I said, on the quarry business and civils. They would like to move into mining. They need the technology, they need the toys, they need the products, and they wanna play with us in that, in that space. It's a very exciting space for us. And by the way, we mentioned it earlier, the chemicals, the mining chemicals now, that has been a little bit over the last couple of years, boxed into a SADC business; we are letting go. We're taking chemicals with us into these markets, and why not, you know?
Establish what the opportunities are in Australia and Canada and Indonesia, but all the other, and the rest of the countries, like West Africa, where we see a phenomenal growth potential for chemicals. So they've been limited to certain commodities, and they're limited geographically, but we'll take them up a notch in the next couple of years. And then lastly, Australia. We mentioned before, we've been trading in Australia for about 10 years now, just over 10 years, specifically with electronic detonators and some technologies. We're moving into the organic space. We haven't found a partner in Australia yet. We are looking in that sense, but we're also not waiting.
We did find first-mover opportunities in Australia, as Mick was saying in his speech just now, to be the first electronic detonator assembly plant owner in Western Australia. You know that Western Australia is 70% of the mining market in Australia. In Kalgoorlie, we can reveal as much as that. It's the heart of the gold and underground sector in Australia, and in recent close proximity to the Pilbara iron ore market as well. So that will be a big, big first-mover opportunity for us. And then on the east side of Australia, we are building infrastructure as well to complement the electronic detonators. But we are still in an infancy in building that. It'll probably take another 12-18 months to get that finalized.
And I might add, the reason is that we are currently not 100% sure with our partnership find, if building ourselves or finding a partner who's got that infrastructure in place already might be the right way to go. So there's some work to be done in that space. I insisted to put three slides in the presentation that demonstrates that what I'm saying is real. These assets are tangible. They are on the ground, and it's no longer that we're talking conceptually putting a plant together in Canada and Australia and Indonesia, but we are actually doing it.
I'm pleased to say today that 80% of these plants are ready to move, ready to produce, ready to go, where in the last cycle, in the last 12 months, they were still talking about commissioning, cold commissioning, hot commissioning, and so forth. The gate to our main plants, that's the electronic detonator and non-electrics plant and emulsion plant in one of the facilities near Sudbury in Ontario. The electronic and non-electric automated plants that you see there on the right, have been commissioned. The Consbec offices in Sudbury, and then pictures of some control panels and emulsion plants in other parts of the Ontario region. In Indonesia, we opened a Jakarta JV office. That is our team. This was the opening and ribbon cutting. We've got MMUs, we've got emulsion plants, we've got ANFO plants.
We're ready to trade and operate in a big way in Indonesia as well. And then finally, as we said, this is our establishment in Kalgoorlie, Western Australia. The electronic detonator plant is on its way. We will commission that plant in the next three to four months. And on that side, we're looking at the federal government reserve to build maybe some infrastructure, emulsion plants, and so forth, going forward. So also quite an exciting space we operate in. Maybe just penultimately, a couple of words on mining chemicals. I mentioned it already. We are embarking on a concept solution for the mining industry, which we call Mine to Metal. That is obviously liberating and blasting the rock, and then making sure that the right yield of metal appears at the other end.
That is our solutions provision slogan to the mines. We do believe that this is more than just a one-stop shop. This has got so many commercial and operational benefits, putting those two divisions together, both from a back office sharing perspective, but also a front-facing, synergistic customer perspective, and I firmly believe that the chemicals business is gonna gain traction in new business development shortly. Bringing it all together, this is how I see our strategy playing out. I must apologize for a very busy slide, but I keep this almost as a scorecard and as to keep me and the rest of the company true to what we are trying to achieve.
We will get nowhere, and no customer will talk to us, no industry will talk to us, if we don't have that basic layer in place. We need to have the best safety record, the best supply chain security, and the best quality of product available, other than our people and so forth. Enablers in R&D and technology, we focus heavily on product development, always. We don't rest even on our front-leading emulsion product currently. Automation, modernization, it's the buzzword in the mining industry, which means all of the above, digitization, automation, autonomy, and so forth, overlaid by R&D opportunities that ultimately lead to the ticket, being the ticket to the game. And both my colleagues, Nishan and Dirk, will talk a little bit more about that. And ultimately, that is overlaid by your growth aspects.
If you don't have these three layers and the enablers, and the solutions for the mines, don't even try and develop the market. It's not going to work. That is what we are focusing quite heavily on. Ultimately, of course, everyone knows we are in a, you know, always thinking about strategic capital allocation, M&A, that can play into many spaces. Market consolidation, protecting the core a little bit, finding something complementary, finding a technology company maybe that will just set us aside, and others. That is fundamental and a, almost a guide to our strategy, per se. Maybe just in closing, key to the growth vector for Omnia, that we are, we believe that through superior product technology and continuous innovation, we continue to drive growth. I think that is a given.
We are exceptionally well-positioned in the market, in the markets in which we want to operate today. We have most infrastructure built ready, then pull the trigger on assembly and production in those areas. We are set for organic growth in our primary markets, and fundamentally, I believe we've got the right people to underline what we are trying to achieve. As I mentioned, the basics are in place, and I'm very comfortable, never too comfortable, obviously, on the safety space and so forth, but it is hard work, it's grinding work. I see my colleagues nodding. It is every day a lens on what is right and what is wrong.
But I also am very, very excited that I think I demonstrated in these markets that we are. We've got a handful of first movers in the market that will set us aside from the rest and almost guarantee success. So I thank you for your attention. I look forward to delivering in what I'm saying. So thank you very much.
Thank you, Ralf. We're gonna take a quick comfort break, so please be back at twenty to eleven. Thank you. There are refreshments right outside.
Hi, everybody. So someone asked me during our break, "So you guys blow stuff up?" Yes and no. We deliver controlled energy solution through sustainable blasting means, and yeah, we still blow stuff up. That's the fun part. So I'm here to talk to you about how BME's products and innovative solutions deliver impressive value in the market. Okay. A distinct focus has to be made on some of our premium products. What you see on your screen is not our exhaustive list, and we have a host of other technologies. However, it's necessary to position some of our products and how it delivers distinct value propositions in the industry.
Note must be made of our INNOVEX solution, or INNOVEX, brand of emulsion systems, which has several unique differentiators delivering value. We spoke about earlier, the inclusion of a dual nitrate system, commonly referred to as a dual nitrate, a dual salt system. There's various benefits that come with this, right? Be it environmental and be it production, be it energy, performance. Note should also be made of the used oil waste stream inclusion that we're proud of, which delivers stability and performance and shelf life. My colleague, Dirk, will expand on that a little bit later. But I think what needs to be mentioned further is what Ralf Hennecke spoke of a bit earlier.
So we consume nearly 30 million liters of used oil per annum, and as we've said, a million. A single liter of used oil can contaminate up to a million liters of clean, drinkable water. Now, consider that 30 million liters of used oil that we consume in our process is 30 million liters of a waste stream that's not going to our dams, that's not polluting our rivers and not damaging our environment. That there is food for thought, and I'll let my colleague, Dirk, unpack a little bit more about that.
But we have developed an in-house emulsification system that not just consumes the waste oil, but also ensures that our emulsion formulations are effectively oxygen-balanced to completely combust and consume all of this used oil, ensuring minimal emissions in the environment. Going forward, a technology we are specifically proud of is our AXXIS electronic initiation system. Our electronic initiation system, AXXIS, has been built by blasters, mining engineers, developers from the field, and not just those from within a lab environment. Okay? We've used the learnings that our customers consider pain points to develop an initiation system that responds to these. This system, as well as ours, as well as others, are produced on our automated manufacturing lines and ensures that we continue to deliver quality product, optimized efficiencies, and a reduced reliance on alternate energy means.
We tie up our blasting, our initiation system, with blasting or software tools from our Blast Alliance hub, which represents a suite of software that allows us to make improved decisions. This represents a data collection hub that allows us and our customers to empower ourselves to make better decisions prior to and after a blast. Lastly, our mining chemicals offer ensures that we deliver mining solutions beyond the mining bench, and we have been deliberate in focusing on extending our value offer through to the milling and combination circuit. We have a targeted focus to increase recoveries, enhance metal grades and purity, and a dedicated focus to improve yield with specific and tailored chemistries for our customers.
I'll park this here, which is just an overview of our product solution, our premium product solution, and hand over to my colleague, Dirk, who will discuss further the value proposition behind our emulsion system, INNOVEX, as well as our mining chemicals value proposition.
Good morning, everybody, and thank you for your time. Now, as Seelan politely pointed out this morning, I have a couple of challenges. The suit you know about already. I think the other challenge is because I am an engineer, I would like to refer to a spade as a spade. So, if I do pause a bit in explaining what we do and how we do, please excuse me. I'm thinking of that non-engineering word that's a bit more polite for this audience. Now, as all the speakers have mentioned before, I mean, we are extremely proud of what our company has achieved over the past forty years or so, as Nishan put it, blasting things up.
And we've taken this time to become better at blasting as time went on. And what we mean by that is being more efficient and more effective in how we do things. As we know, any and most human activity has a certain carbon footprint or footprint on the environment. And there's more and more focus these days to make sure that we can have a smaller impact as possible on our environment. And the way the world has put this together is focusing on ESG, so that's the environmental focus. It's also a social focus on people, and coupled with that, a bit of governance as well.
I'm going to try and lay out to you how what we do and the technologies that we use in our manufacturing processes, as well as in our product, actually enhances and is a value proposition to our customers. The last forty years or so has, as Ralf has alluded to, we have been continuously refining and researching our emulsion technology. We were the company that introduced Cold Emulsion Technology to South Africa, and may I note that that technology is now used just about everywhere in not only SADC in South Africa, but also all over the world.
So in that time, we've now, with our experience and our feedback loops from our customers, we believe we have developed three unique and diversified value propositions for our customer. The first is, and then I had to explain that this morning around the stability and people would say, "But, you know, in the modern mining industry, where things happen so quickly, there are so many plants, the product moves through the system so quickly, how would product stability be a differentiator?" But perhaps if you had a look at some of the videos that we played this morning, you would have seen that those blasts are actually very well controlled. And like modern-day motor vehicle engines, if you use oil that was available a couple of years ago in today's engine, you will destroy it within a matter of minutes.
That's how fine-tuned the technology has become around using as little energy as possible. In other words, reducing the carbon footprint to as small as possible, and Ralf started with that. The trust in the product and the trust in your service provider is so important because the blast has been designed to use the minimum energy possible to move that rock. And if you can't trust your product and your product doesn't behave in a predictable manner, all of those plans go out the window, and you sit with a sub-optimum blast.
So what brings that robustness to our technology is our dual salt, and the gentleman alluded to the ammonium nitrate and the calcium nitrate, and in that, we are also unique in SADC, and one of the few companies in the world that uses the dual salt technology. The second one, and the previous speakers have alluded to it, is our use of what we would call waste energy from waste fuels, instead of newly sourced fuels, like diesel and so forth. And what enables that, and it was a decision that was made roughly fourteen years ago, when our country was busy hosting the Soccer World Cup. Omnia supported us in establishing our own emulsifier manufacturing facility within our division, and that also sets us apart from our opposition and the competition.
Where everybody else sources directly from suppliers, we have the capacity and capability to manufacture our own emulsifier. Why that is significant is because you may know, emulsifier is a bit like our retirement system now. It's a two-part system. We have oxidizer on the one side, and we have fuel on the other side, and then Thomas will explain to us the revolutionary technology that we are working on to take us forward in terms of oxidizer, but on the fuel side, these two things, one water-based, the other one carbon-based, they don't necessarily mingle, and that's why huge oil spills at sea is such an issue, because the oil just floats on top of the water, and it spreads everywhere.
So emulsifier is really the secret sauce in our emulsions, and it's the technology that allows us to customize our emulsions to either tolerate a significant loading of used oil and other recycled oil or to be extremely robust when it comes to mining in areas where the soil doesn't necessarily play along. The chemistry in the soil is not necessarily healthy for our emulsions, and we can develop our emulsion to such a point that it can tolerate those conditions. So that plant really enabled our product development team to really exploit our formulations to the fullest, to a point where... and we are on the way to 100%, but currently, the majority of our products utilize recycled used oil loading of 90%.
So that means that 90% of the carbon in our formulation now comes from carbon that somebody else has already used and is now discarded. They don't want it anymore. And Nishan mentioned the volumes that is involved, and I can perhaps just add, that's roughly a quarter of all the used oil that's generated in SADC that flows into our facility, and we dispose of it in a useful manner, in a environmentally responsible manner. The other thing that's maybe not so well known is the way we go about sourcing the oil. You know, so firstly, it decouples us from the traditional carbon chain in terms of diesels and, crude oil and so forth. So our supply chain is more robust and differentiated.
But we also, at this point in time, have more than twenty-two SMEs, small to medium enterprises, that actually go out and work in the communities, in the host communities of our customers, going around collecting this oil, bulking it up, so we can come and collect it, take it to our processing facilities, and use it. And you can imagine the number of job opportunities that that creates in our customers', host community, as we refer to them. But also a bit more unseen, the business acumen that now comes to these communities, where people get the opportunity to run, design, and manage their own businesses.
Together with the governance that comes with dealing with a big corporate like Omnia, you know, that skill set can then be transferred over into the communities, and that way, we really deal with the E, the S, and the G in terms of ESG with our customers. The last one, fairly recent one, where, you know, when these emulsions, bulk emulsions, as we call them, was first introduced to the industry, it was also known as pumpable emulsions or pumpable explosives. Which means that before that, if you had to apply explosives, you had to do it by hand, you had to carry it, you had to move it around in trucks and packaging, and this is now what became a pumpable solution.
With our technology and what we've worked over the past couple of years to perfect, and with the development work that we did, and research into our emulsifiers, we now have a product where we can mechanically alter the rheology and other physical properties of the emulsion just before we add it to the blast hole. What that means is that we have the convenience of pumpability and transportability up to the face, and then on the face, we can transform that emulsion to, from a scientific perspective, the best condition that you can have that emulsion perform under. What that means is that the emulsion is extremely robust. We can lock out and keep out any negative chemistry that is in the ore in the block that needs to be mined.
But we can also exponentially so increase that contact surface area between the oxidizer and the fuel. And what that really means is you're putting your emulsion. It's like adding nitrous to a vehicle. It really puts it on supercharge, and we can get extremely high energy recovery out of our explosives. So that's just on our emulsion. Ralf and Seelan has mentioned that recently we've onboarded our mining chemicals section under the guidance and leadership of Lefa there. And that section of our division really focuses on where we, as traditional BME, focus on the mining and the extraction of the ore. That part of BME now focuses on the extraction of the minerals from the ore.
They deliver not only raw materials to the mines, but they also work with the clients and with their primary suppliers to design an optimal solution for that mine's unique ore and unique processing capability. In such a way, they also reduce the mine's footprint when it comes to carbon emissions and other emissions, either through energy consumption in their processes or generated in the processes themselves. By doing this, and as Ralf has alluded, we now focus not only on what we traditionally call mine-to-mill, sorry, but we focus on mine to metal. From that perspective, we can. Ralf mentioned the brain drain, if you wish, out of our customers. We can really give a holistic start-to-end solution to our customers to optimize and reduce their carbon footprint, amongst others, to as small as possible.
I will now hand back over to Nishan, and he's going to give you a bit more detail around specifically our software solutions that goes with blasting of designing blasts, but also the hardware that supports that in terms of electronic and other detonators to initiate these blasts. Thank you, Nishan.
So BME's advancements in electronic initiation systems has been built with customer and environment in mind. And we have designed a system that delivers on enhancing safety within a blasting system. We have developed a control system where the additional levels of control and protection are embedded to allow our system to offer exceptional resistance and withstand dynamic pressures. Our AXXIS technology has put performance front of mind, with the impressive accuracy and precision, delivering world-class performance benefits. Through the AXXIS system, we have unlocked new efficiencies through reduced downtime, reduced excavation and hauling costs, and optimized efficiencies with delivery of quality blasts. This provides our customers with predictable and consistent muck piles. Blast performance through tailored initiation and achieving safe outcomes has always been a fundamental benefit of initiation systems, and the AXXIS system is built around providing that.
Our customers are seeing the benefit of a lowered environmental footprint with our tailored blasts, our controlled vibrations, and larger blast designs, which is allowing them to see lower energy consumptions and reducing strain on downstream milling processes. BME's modernization journey has an outward expansion focus, with softwares and hardwares designed to talk to our immediate and our future needs. We have thus developed a suite of softwares and hardwares, incorporating the benefits of AI, cloud computation, 3D modeling, and drone visual capturing. These solutions position BME on the pathway to autonomy with robotic and data validation extracted from our cloud-based servers, digital technologies, and intuitive user-centric design interfaces. These products progress our innovation into digital analytics, digital connectivity, and integrated automation, which have been realized as distinct future-fit solutions for our success.
I will close off my segment by taking you through our product canvas. BME is proud of the fact that everything we do and the innovative technologies we offer are key elements that target customer challenges and pain points, solve the problems and conundrums of complex mining conditions that exist, while also supporting the communities in which we operate, delivers on the ESG imperatives of the industry, as Dirk alluded to earlier, and also supports the climate in which we operate. We have been deliberate with our technology offers and our technical expertise and the many service models we offer, whether it be product only, intermediate servicing, the mine-to-mill offer, or the integrated product and solutions focus, that delivers on the complete mine-to-metal value proposition, which we spoke of.
Our premium products, Innovex, AXXIS, Innopak, XploCharge, Viperdet, a host of others, it doesn't come to me right now, and our automated and digital solutions complete the product canvas that we present. These products present a unique value proposition in the industry, and positions us for success with valuable and, very importantly, targeted product solutions that we've developed not just for the industry, but for the environment. And also is an end-to-end solution, delivering on the blast optimization model that we've highlighted earlier. With these tools, BME is positioned to deliver beyond mining excellence.
I will now hand over to our strategic partner, Thomas, CEO Thomas Gustafsson, who has joined us from Sweden, from Hypex Bio in Sweden, who will deliver the value proposition of an innovative emulsion chemistry using hydrogen peroxide as alternative to the conventional ammonium nitrate systems, and how this delivers value for BME, for our customers, and for the industry. Thank you.
I'm honored to be here, seeing all of you here, and especially thank you to the Omnia team for having me. I'd like to start with this picture. We're from a different jurisdiction. This is from the largest open cast operation in Europe. This is the Aitik Copper Mine, up north from Sweden. It's operated by Boliden Minerals. And I really like this picture because of the blue skies, but also of the snow, something that you might not be so used to. And also, snow represents to me a concern, because we might not have snow in the next thirty years. So my name is Thomas Gustafsson.
I am currently the CEO of Hypex Bio Explosives Technology, and I'm here today to give you a very brief introduction to Hypex Bio and what it means for the world, for us, for you as investors, for BME, and for me personally. Hypex Bio is a commercial explosives technology platform, a system like you said, Ralf. It has been developed in Sweden by my Swedish team and myself, and it's been developed with a very, very clear ESG focus. The target is to solve well-defined problems of the mining industry, problems that arises from the use of conventional nitrate-based explosives. And the idea has always been to obviously align this technology with the green agenda of the mining industry and construction industry, the global industry. Today, we are in commercial production. This is proven technology. We are operating in the mining industry in Scandinavia and in the construction industry.
We can see, but maybe not in all cases, but in a lot of cases, that we are outperforming current technologies in a non-disruptive way. We are charging this in the same type of drill patterns, using the same type of detonators, using the same type of operational methods. I'm talking about a system and a technology platform. That is crucial, because this has never been done before in a commercial scale. I'm gonna come back to that a little later. But first, some background. Everybody here understands the relationship between modern society and metals, and the relationship between metals and mining, and the relationship between mining and explosives. With that chain, it's obvious that explosives are a strategic material, essential for the modern society of today, and certainly essential for the sustainable society of tomorrow.
Today, everything is based on nitrate salts, whether it's pure ammonium nitrate-based emulsions or a combination. Now, some of them are better than others, but they are all dependent on the same value chain. In principle, the technology we're using today came in the 1970s, and even though there has been optimization and a lot of work going into this, today, the technology has perhaps reached its limit as to what is possible in terms of technical development. In order to solve a problem, you must categorize the problem and understand it, yes? And we categorize the problem we're having in the explosives space into three different categories. The first is the generation of toxic detonation gas, NOx gas, ammonia, formed as a result of the nitrates we have in our compositions. This is an effect of chemistry and thermodynamics. We cannot avoid this.
Another is the generation of ammonia and nitrates into the water systems surrounding the mine and in the mine, something the mining industry needs to deal with, and something that affects the communities and societies close to these mine clusters. The second is emissions. Previous speakers have spoken about emissions. Not only the emissions stemming from those detonation fumes, but also the emissions stemming from the production of the raw materials, ammonium nitrate, mainly. And I also think this is very, very relevant, that if we see explosives as a strategic component to modern society, we need some redundancy, and today we don't have that. We have one technology. That's it. 99% of the world's explosives are based on the same type of technology. There's very little redundancy, and that is concerning to me. Okay, so how have we addressed this?
As previous speakers said, we have replaced the ammonium nitrate base with a hydrogen peroxide base. And for those of you here that doesn't know, hydrogen peroxide is water with an extra oxygen atom, H2O2. It contains a lot of oxygen, and the residues of breaking down that molecule is water and oxygen, which is fine. Those are materials we can live with, yeah? Okay, It's quite complex to do so. It's not easy to do so. I'm gonna go into the technical details, but that's what we've done. And by doing this, we solve these issues. Where we operate in northern parts of Europe, we can access hydrogen peroxide in a very green way. The peroxide we use is built by green energy, mainly from the Norwegian hydropower industry.
Secondly, we have no nitrates, we have no ammonia in our compositions, and if we don't have that chemistry, we cannot get the toxic chemistry at the other end. We can't get NOx gas, we can't get ammonia. In fact, if you have residues in the muck pile for explosives, our explosives break down to water and oxygen, causing no impacts on the environment in terms of water treatment. That problem goes away. And secondly, or thirdly, we are offering an alternative. The supply chain of hydrogen peroxide is completely disconnected from the supply chain of ammonium nitrate. There is now an alternative, a global alternative. Peroxide is commercially available in a vast jurisdictions, from Australia to Argentina to northern parts of Europe to Canada.
We can tap into that supply chain, and today we are the only ones doing this, which means that the interest from the supplier of hydrogen peroxide are very keen to be on board with this. Okay, we're gonna start at the customer end. The customer is interested in the explosive, and we've been talking about emulsion. The emulsion we produce is a highly viscous, white, white emulsion. You can see a sample right there on that rock. It's ammonia and nitrate-free, as we have said. It is designed to be flexible. We have still a lot of work to do to cover the full palette of requirements from the mining industry, but we have good understanding of the chemistry and how to get there. The technology we have today is sufficient for the needs of the industry.
We can design energy levels, density levels, targeting specific needs of the customer. For instance, the need of the limestone industry is completely different from the needs of the iron ore industry in terms of energy, binds, wall control. We have designed this system to be non-disruptive at the operational application step. This means that a blaster working for Anglo or Rio Tinto, for Boliden Mines, should recognize themselves in the technology we use. The same type of delivery system, the same mechanism, the same . . . Well, the same buttons on the remote, almost. Not quite, but almost. We have engineered away a lot of the challenges with this technology, put them at the plant to centralize that. When we detonate this product, we mainly get water steam, and a lot of water steam, hot water steam, so basically we are breaking rock with water, and it's quite effective.
Now, I'm not sure if you at the back there can see that final line, but this is, this is up-and-coming technology. We have been on the market for a couple of years, and yet we are, in some cases, not all cases, but in some cases, outperforming current technology in the same type of application. And that is quite extraordinary. Now, we're gonna take it a step back. What's behind the emulsion? What's behind everything that the customer sees? And this is the technology platform. As this is the first time this has been done, we need to consider scalability factors, production factors, and everything else. So the technology platform that we offer at Hypex Bio is foremost manufacturing plants. It's been mentioned before that containerized modular plant is key for global growth, and we have hooked into that idea and built the same structure.
Our plant is based on container formats. We can ship them in normal standard containers, and we can build them on site, very similar to the detonation plants BME is currently operating. This gives us a very flexible and scalable production methodology. The plants we build today are automated, they can be remote-controlled, they can be easily shipped, and they are very low in energy use. Our production temperature is around 25 degrees. In contrast, ammonium nitrate production temperature is 90 degrees, so our energy consumption is much lower. Non-disruptive delivery system. Obviously, this is based on Scandinavian standards. I recognize that the standards globally are quite different from what we have in Scandinavia, but we've got to start somewhere. You can see there, there is a typical delivery system we have developed for Boliden, which encompasses a delivery system, which is the truck and semi-automated charging equipment.
This equipment gives us string loading, variable density per hole, and allows very accurate correlation between the amount of energy we put in the rock and the amount of energy we need in the rock, which is not always the case. And obviously, chemical knowledge, the chemistry around this. And in addition, also a know-how in quality procedures, production procedures, test procedures. And the body of test knowledge we have today is extensive, which we need to convince the customers there's also the regulatory base globally. We need to prove that this is safe, that we can manage it, and we can use it. Okay, who am I and where, why am I standing here? I'm an electrical engineer by trade, and I came into explosives for various reasons.
I'm not gonna go through that story, but my good friend, Robert, as you can see to the far right in that picture, and myself, we're good friends. We had access to laboratories through my family business, and in 2018, we felt that we needed to do something about the sustainability in the explosives industry and also the mining industry. So we started developing this technology in our laboratory at 2018. We had very close contact with one of our chemists and engineers, called Stefan Nilsson, as well. And together, we developed a concept in the laboratory, which we were completed around 2020. At that stage, we felt we need to get out of the lab, so we did a tour, the mining industry in Sweden. Boliden said, "Okay, this is good. We're gonna give you a face.
You can blow some rock." Fine. We did. We proved to Boliden that this is possible, and we entered into a collaboration with Boliden, which helped us to do an incremental, very fast test process, where we could verify our technology in a real-life environment. Our first mine was the Kristineberg Mine, which is a gold mine operating at around 750 meters in the north of Sweden. And from that point, we were able to do full-face blasting, identical to what they do today, and we proved the environmental claims, we proved the performance claims, and we proved that we could do it, not only from performance and environment side, but we can do it economically feasible, and we can, we could do a reliable supply chain.
That was a stepping stone to formulate this company, Hypex Bio, to formulate the technical platform I just told you about, and to formulate strategic partnership. The platform we have today is the foundation of our growth. We license and service that platform through partnership. We have one partner in Central Europe, which is the SSE Group, operating and supplying explosives into Europe, and obviously, BME. Companies that are very aligned to our morals, very aligned to our values, and also have the will to do something. There's a lot of discussion about sustainability, but there's very few companies that have actually put their money, their trust, and their ambition to do something, and BME is one of those companies. Today, we are in commercial production. We're supplying this on contract basis in Scandinavia.
Okay, so I've talked a little bit about what we have achieved, but we have a proven concept in terms of chemistry, process engineering, test procedures, quality procedures, application, know-how. We have proven this with customers. I'm gonna show you by the end of this presentation, some words from our customers, so you don't have to take mine for it. The environmental and performance claims also been proven by third parties, customer base. So this is true. There are no nitrates. There is no NOx gas. This is a big one. This has never been done before, and all regulatory frameworks for explosives globally are completely aligned with what we have today.
In order to convince European regulatory bodies and then, you know, down the line, the Canadian, the South African regulatory bodies, that this is doable, we have to build an extensive amount of test knowledge to convince them that we can do this, and we have. We have CE approval in Europe. We have all the permissions we need to operate in Europe for transport, production, use, even decommissioning. This is a key one, scalability. We have spent a lot of time into developing, engineering, or manufacturing, delivering systems, also our supporting systems, such as tanks, monitoring systems, transfer pumps. Also, the production equipment we need to produce our chemicals that goes into the emulsion. All of that is done. We have in-house capability of that manufacturing today, and we have rudimentary, I'd say, but scalable know-how on how to grow that capability.
We operate two plants ourselves today, one in Sweden, one in Norway. We have commissioned one plant in Switzerland together with SSE. That came online last week. We have international recognitions. The interest from the mining industry is significant because of that one-to-one, you know, problem-solution connection, and we have secured our IP. We have three global patents today, but more on the way, and we have this body of in-house trade secret knowledge, which we safeguard very keenly, which is another component of our IP portfolio. Seeing is believing. Now, I can't bring the plants to you. I can show you some pictures, just like Ralf did before. Here is charging operations, our application team, together with Boliden. This is 1,100 meters underground in the Garpenberg Mine, 26 degrees underground, doing development charging.
This is a blast result from one of the gold mines up north from Boliden, with one of our operators checking out the results. Here is one of the charging units that we operate in Norway. This is for limestone production, also underground in Norway. This is a charging unit that we have in operation in Stockholm, Sweden today, actually quite close to our office. Up there to the right is our first surface truck, also designed and built with assistance of suppliers, of course, but with the know-how of our expertise, and that's our Norwegian team. Very, very happy when we finally got that done. I think most interestingly in this context is our Norwegian plant. That's a very, very small footprint. Very small. That plant can deliver two hundred tons a week.
So the footprint of our production is much smaller than the footprint of ammonium nitrate emulsions. Okay, in order to do something and to progress, you need a vision. And I realized over the years that, holy shit, this is actually doable. We can do this. It works. We can break the rock. We have these environmental benefits. And even though that I'm one of the inventors, I always doubted myself, but we can do this. So now is the time to be bold. And to be bold, we have to envision a future where we don't have these environmental problems for the mining industry... So our vision is to be the natural way we break rock. Maybe not today, maybe not tomorrow, five years? Not unlikely. And the way we do that, couple of ways. One, we need to lead by example.
We need to put our money where our mouth is. We have to prove to our customers, to our partners, that we are the people we claim to be, that we give the results we claim to give. It's a tremendous challenge, but today we have done that. We've been able to do that. Now we have to scale, and together with aligned partners such as BME, I'm confident we can do it. Most of you are investors here. I think you would agree that the future of mining is green. It's not a nice-to-have, it's existential. Where I come from, if you do not have a green agenda, if you do not have a plan to manage your emissions, you're out of business in ten years, very likely, and it's not only about your greenhouse gas emissions, it's also how you affect the society.
As Dirk said, very, very intelligently, there, there's societal aspects, there's emission aspects, there's governance aspects. And what we are doing is managing emissions from Scope three to Scope one, detonation gases, obviously, but also worker health. You have two situations. You have a situation where a worker should breathe ammonia on the ground and a situation where they don't, right? You have smaller footprint of production plants and so on and so forth. Where I come from, there's a significant cost to emission as well. And if we can combine a technology that is non-disruptive at production, giving the same results, streamlining an effective implementation, which doesn't, let's say, doesn't change the practices of using explosives too much, is an easy fix for the mining industry. This is a key solution for them, and trust me, they are desperately looking for solutions they can implement.
I cannot push this enough. The green transition of any industry, not only the mining industry, but any industry, is probably the biggest challenge we have seen since the Industrial Revolution. We need to change so many processes all over the world that it's doubtful we'll make it. And any solution we can offer to the mining industry makes it easier without production impact. It's a game changer. It's a given. Obviously, we need to be able to put our money where our mouth is. I've said it a couple of times, but I believe it as well. We need to prove that we can maintain productivity and we reach the emission targets. We're seeing this all over. Circular economy, reuse. The emulsion that we have today can be implemented into a system where we reuse everything. We can decommission the emulsion on site.
We can break it down into water, oxygen, and a very small amount of non-dangerous oil. That oil can, in principle, reuse. So it's a completely circular system. We can produce this explosive very close to the mine sites, allowing for economical growth of the local societies, but also independence. The mines can control their own value chain. Not necessarily the case for every mine, but certainly an option. And I think it's also a matter about aligning with the mining industry's messaging. The mining industry needs to prove to the local communities, to their local governments, to their investors, that they're doing something. What we are offering is a clear path that aligns with not only their targets, but also their messaging. And I can tell you, the emissions stemming from explosives are significant.
The data we have indicates that the explosives emission component is much bigger than the diesel component. So this is a really big deal, and so far, to my knowledge at least, we're the only ones that can do it. The reason I'm here today with these guys is because when we were up and coming, and this made some traction in the world, there was some interest from competitors, other explosive suppliers. They never thought we could do it. "This is impossible," they said, "and certainly not you. Small team from Sweden, you're crazy. It cannot be done." I got contacted by Scott Scovira, and he said, "This is amazing. Like, have you actually done this?" I said, "Yeah, we've done it." They came up, they saw it.
They say, "Fantastic, we're in." The alignment in just social aspects, communicating with the BME team, like talking to Steven, to Ralf, to these guys here, there's a lot of laughs, but it's also a lot of commitment. As we've seen throughout the speeches here is that BME and Omnia, they get things done, right? I was thinking about the pictures you showed there, Ralf, and my pictures. Talk the talk, do the walk, and that's the difference between a lot of other suppliers and the crowd we're with here today. They coming here and sitting with these guys, having some dinners and some laughs, it's an amazing social experience as well.
So we're not only on values and making things happen and roll out and so forth, the custodianship of Omnia, their vision to take technologies global, being flexible, being innovative, also resonates with the history of BME. Being entrepreneurs, even at the global context, is why we make a really, really good fit. I'm really looking forward to this journey. Thank you, and I said in the beginning that, you know, I think we have something for the future, and the best statement for that is to let you know what our customers are saying. I can't fit all quotes, so I've chosen two. This is from Jiri Englén. He is the CEO of Implenia Sweden. It's a construction company taking on large-scale construction projects all over Europe, mainly tunneling. Very complex. They are operating a large tunneling project in Stockholm with Hypex. This is what they're saying...
And Boliden, well, I don't have to make an introduction to Boliden, I suppose. But Boliden's commitment is a hundred percent. Working with these committed partners, proving to them that we can do it, makes all the difference for us. So yet again, I wanna thank you to BME and Seelan and the Omnia team for having me today, and thank you for your attention. And I will hand over to Seelan for some closing remarks. Yeah. Should we take questions now, or should we wait until the? We will wait. The questions will come later. Thank you.
Thanks. Thanks, Thomas. Thomas, thank you. Thank you very much. I think it's always inspiring to hear someone who is absolutely passionate about a vision. You know, someone who is a entrepreneur, and has a deep purpose. I think what we really aligned with is the purpose of Hypex. So my job's a simple one: it's to try and bring it all together and close. I think the first point I want to leave you with is that we're building a global mining solutions business, and what you will see, BME is a lot more than just an AN producer. BME is a lot more than just some exceptional detonators.
BME is a business that is underpinned by incredible values, purpose, technology, and a team of experts that are committed to, one, maintaining, but two, growing and transforming the industry. We know that, we have to be incredibly disciplined in terms of basics, so safety, the way we do things, our processes, and Ralf's an incredible example of that. We have a unique proposition that BME is underpinned by the Omnia supply chain, the Omnia R&D, Omnia's chemists, and manufacturing facilities. We also can see a bit of a global footprint. We haven't just gone to any country across the world. We've chosen a few. We've done that with some very deep partnerships.
Gusman, who you heard on the screen, is with us here today, and please, you know, chat to him over the lunch break. And we've selected those partnerships in a very considered way. To win, what we do need is a winning culture and a winning customer base, and most of the speakers spoke about the way we do things, but I think what we've also linked that a little bit today is to the actual value proposition to the customer. Ultimately, all of you being shareholders here, you're gonna ask me about this chart. And you know, this ultimately must link to our margins, our profits, our global diversification, and our diversification between agriculture and mining.
And I think what you're seeing there is a very strong set of margins, a very strong set of profit growth, and also quality earnings coming out of this asset, not just in the short term, but also in the medium and long term. You can see some investments for growth into the future. All of that, what we've promised our shareholders, is managing our balance sheet carefully, focusing on cash, and we continue to show delivery and trajectory there. We also said we will be very considered with the way we distribute that cash and where we invest and how we invest. And certainly in the BME segment, what you're seeing today is an investment in Hypex Bio, and how passionate the leader of that business is, and where we've put some of our money into.
We also continue on a very structured, disciplined plan of capital allocation, and you've seen us do that for a number of years, and we will continue to do that going forward. Finally, our proposition to all of you is that we operate in these primary sectors, sectors that are resilient, sectors that are purpose-driven in food security and mineral extraction. You see us speak about a very focused business model. We're clear about what we do, and we're also clear about what we don't do. We're clear about where we spend money, but we're also clear about where we take money away from.
I'm so pleased with the BME team, because we often spend so much time talking about agriculture, but to hear Dirk and Nishan and others speak about the capability in our explosives business, the passion, the focus on doing what's right, efficiency and growth, you can see a large element of operational excellence. I think Dirk and Nishan and the guys must come and do this more often with me going forward. We have some distinct competitive advantages, and, you know, we've spoken quite a bit about that. Ultimately, where I started is, you know, you will hold us accountable for fairly robust capital allocation and cash generation going forward. So that's where I wanna stop. I want to open up for questions.
You know, let me just thank all of you for making the time. It's quite a slug of time to be here and listening to this, and I know you all have lots of priorities. Specifically to the BME and the Omnia team, and you, Thomas, thank you for doing this for us, and thank you for making the BME business so real, you know, for making the explosion, the emulsion, the technology tangible for some of us that are not on the block every day, and seeing it and seeing it happen.
As you say, we can't do an explosion here, but I think the pictures, the marketing team and others that brought in the pictures and the videos and others, you know, makes it real. You're all welcome at any point in time to visit, you know, our facilities. We will organize that. We will show you what Dirk actually does, what Nishan actually does. And you're welcome. You know, we're willing to organize that going forward. So let me pause there and just thank our team as well for what you've done, and let's take any questions or comments or thoughts. Thank you. Are we just gonna take the? Is there a microphone?
So we're gonna ask, I think, yourself and Ralf and Thomas to sit on the stage, and then we'll-
Okay, but you guys can sit. I'll stand. I've sat enough. Okay, do you wanna... Okay, you can ask the question. In the interest of time, we'll sort ourselves out here.
All right, just a-
Okay
... quick one. How do you envisage pricing our Hypex Bio against ammonium nitrate? And, do you see the mines paying a premium? How do you see that playing out?
Do you wanna answer?
Sure, I can answer.
Yeah.
So pricing relates to value. The value we add by removing the nitrates problems are substantial. I wouldn't say a premium. A premium assumes that you're comparing it to something that already exists. So that, I think personally, that's not really the right way to frame it. I'd say the value we add is considerably higher than the price we must charge. The explosive industry is extremely pressed for margins. It's very difficult to make this business profitable globally without tremendous volume. We need to change that. So my answer to you is that, yes, we will sell this at a higher cost, not so much high that would be prohibitive, but something that truly reflects on our values. The idea is to develop a value model so the customer understands that by implementing our technology, the explosives will essentially be free.
Okay, there was also a question.
Thanks also for Thomas. Perhaps can you talk about your scaling plans for your business, and in particular, dwelling on the timing of your ambition, the scale of it and how much market share you intend to gain, and the capital requirements, perhaps, of that, and how your partners will help you get where you wanna go, in particular, BME?
How much time do we got? Okay, good question. So first off, we need to penetrate the large mining jurisdictions of the world, which means Canada, which we are already working on, Australia, this market, Central Europe, thank you, maybe Latin America. So the way we grow is by partnering with ambitious companies such as BME, where we build plants in Sweden, export them into the local market, and with the help of local capabilities, implement a place of production, and together with that local team, working with application knowledge to help the customer. It's very important to understand that the pull is significantly bigger than the push. I think you said that yesterday, which was good. So the mines want us to do this now.
Our main challenge is how do we prioritize, and how do we don't we overwhelm ourselves with too many projects? In regards to capital requirements, they are significant, but there is, to some extent, a will for the mining industry to invest. I think we are looking at we have to scale quick. We have to assist the mining industry to reach their 2030 target, so we have, say, five years to scale into Canada, which will be next year. Australia is up and coming. This market is probably also very close, a couple years ago. It's hard for me to go into more details on that. Is that a sufficient answer, you think? It, for this crowd, yes.
Yeah.
Thanks for the presentation. I've just got a few questions just for Ralf. I see on the curve with the revenue, you said there's potential for growth. Is that all organic growth, or is there opportunity for some bolts on M&A? Secondly, how does Hypex Bio fit into the long-term strategy of BME's long-term strategy? Is it... Will we be thinking of peroxide explosives the same way we think of the emulsions or bulk, or is it just, will it always just be an investment?
Oops, sorry. Thank you. Two very interesting questions. I think, maybe let's answer the first, the second question first. Fundamentally and principally, we're seeing Hypex Bio technology currently as an add-on to our current value proposition. So I think we've fundamentally got a very strong value proposition already, as I mentioned, in various ways, and we're not gonna neglect those. To the previous question that was asked as well, this will take some time to develop into the market and roll out for many reasons. Regulatory, as Thomas was saying, infrastructure, acceptance in market, and so forth. So it'll take some time to build. We see it as a massive opportunity for us to take into all our markets. Fundamentally, what we've got currently is a-
... exclusive agreement in Canada to roll this product out in Canada, and we are busy already with the regulatory, with the infrastructure build, getting that over the line and building a plan specifically for the Canada market and rolling it out conceptually first. And the reason Canada, people ask the question as well, I don't want to belabor it, but is that the Canadian regulatory and miners specifically are having a very, very sharp lens on ammonia residue and water and rock after blasting, and they want to eliminate. So it other than being underground and cold weather market, it is fundamentally just the right market to be in. And then we've got a first right of refusal in various other sectors in our primary market, specifically, including South Africa, as we go along.
We must say, and I must add to what Thomas is saying, the emulsion, let's call it an emulsion.
Mm-hmm.
Hydrogen peroxide emulsion is going to be only one product. We also want to co-develop products with Hypex Bio in other spaces, boosters, cartridge product, and so forth, that still can be developed, and we would like to do that together. For your... Back to your first question, it is currently the revenue that we've shown, and obviously, aspirations are linked to our global international aspirations and getting more internationalized in the business. But there's organic growth in all our markets currently, as I mentioned, in South Africa, in SADC, in West Africa, and with our newly established plants in the global sectors. What the revenue does not include at this point of time or in the aspiration, is any consolidation in the market, and where Hypex will possibly quickly take us.
Does that answer the question?
Yes, it does. One last question for Thomas. While I appreciate the opportunity there is for Hypex Bio, could you please give, like, some sort of figures to understand how much better it is? Like, for example, your GHG emissions for the miners, how significant is your AN emission for the miners, and how much of it does it cut?
In terms of Scope 3, where we've been putting most focus on, is somewhere between 70%-85%, depending on your use of explosives, your transport chain, and so forth. For Scope 1, it's somewhere between 60-74. It also very much depends on how you use explosives, how efficiently you use explosives, how you transport them, and how you store them. But I can say with confidence that it is in excess of 50% in almost all cases.
I just have two questions, please. You made a comment initially that the chemicals business has changed its reporting straight into BME. I just wanted to pretty much understand what does it actually mean from a mining chemicals opportunity, from a route to market, call it, perspective? Because I think the way I'm trying to think about it is if I look at your margin, I'm trying to understand the full service benefit. You know, you've spoken about the certain times you do certain activities for. So I just want to understand that and the opportunity for the mining chemicals business. And then the second question is more related to the chart you showed, showing the valuation differential, relating, looking at BME versus obviously the Orica's of the world.
My question is really more of a what- how does that inform your capital allocation? Because I'd imagine the hurdle rate pushes up higher, given that you trade at half the valuation of those guys. So I'd imagine doing buybacks more aggressively or... It's just a question, I guess, to think about that. Maybe if I can just add a last point: have you guys done any work with regards to the consolidation or the potential for consolidation in the market related to, I guess, the companies that fit best together, if that makes sense? Or you could have specific specialty in surface versus underground, certain commodities and chemicals and so on. So thanks.
Thanks for that question. I'm going to answer the first one, and I'm going to ask Glenn to talk about the second one. So just in terms of mining chemicals, the mining chemicals business has always been reported in the mining segment, so there's no real change on the segmentation or the financials. I think the change we introduced is to get the team who's running that business to actually report to Ralf. They were previously reporting to the CEO of the Protea Chemicals business, and I think the reason why we did that is we wanted to fashion our business and focus it on customers.
So if they're agri customers, they must go to the agri segment, and if they're mining customers, they must go to the mining segment, and then synergize the key account management relationship with the mines, and actually have some sort of consistent engagement there. I think what we haven't done today is gone into a deep dive into that business and give you a sense of all the opportunities that are there. But I think what you are seeing is that our mining chemicals business has been growing very, very well over the last few years. And as a number of mines are coming back online in Namibia, that business has secured some new contracts there. And broadly-
... it, you know, our team have the ability to transport, to deliver, and to supply these extraction chemicals across the entire continent. We believe there's more that team can do. They are, they're an agile, entrepreneurial team, similar to what Thomas and BME speak about. So we think them working together with BME will unlock certain value going forward. We think in the medium term, we can do that in some of the other regions that BME is in at the moment, but that's the next step. Your second point around the multiple and the buybacks and the cost of capital, maybe Glenn wants to answer that, and you can also add any comments to the slide that we put up this morning.
Sure. Thanks, Seelan, and yeah, thanks for the question. I mean, I guess what those global multiples show you, and why that slide is there, is. It reaffirms our strategy. We know why global explosives companies trade at higher multiples. I mean, you can see the cash conversion, you can see the growth, you can see the higher margins, the scale and the sort of specialist nature of that industry. So it reaffirms the strategy in two ways. Number one, grow mining, because the mining companies' multiples exceed the agriculture multiples internationally. Number two, the international multiples exceed the local multiples. So both of those reaffirm our commitment that we're doing the right thing.
And we've mostly been doing that in a very organic way, either ourselves, through assets on the ground and growing the business organically, or through partnerships. So you're 100% right, you can't, when we trade at a half or less the multiple of these business, you're certainly not going to be issuing equity and buying mult- you know, companies at double your multiple. I mean, that would be hugely dilutive to shareholders. So the strategy is to grow it internationally and to leverage partnerships, and we've shown that partnership muscle has been strengthened quite materially for the group. There's a bunch of partnerships that we have demonstrated, and there are a bunch of new partnerships that we are exploring.
So internationally, companies are coming to us, you know, to talk about that because they see the services and the value and the product, and they see the will to partner. So that will pull us in that direction. And maybe the last point, which is also obvious, is that when you look at those transaction multiples, so that valuation slide had transaction multiples on the left, so private company multiples of transactions that happens when global companies acquire, and on the right, the listed multiples in that space. It does show you what happens if a big global company does aggressively come for a company like this. It's not gonna be at four times EBITDA.
So I guess it highlights the embedded value of that business within our.
I must say, it's quite scary when our engineer here speaks about the two-pot system, and then our chemical engineer here speaks about embedded value. I'm starting to wonder where I'm sitting. But just to answer the last part of the question, in terms of the consolidation, you know, is Omnia, you know, engaged and fully understanding and analyzing the different players on that list? You know, I can tell you that our team has met probably all of those businesses. Me, personally, have met the CEOs and others. You know, we've done work to understand where there's synergies, you know, where there's opportunities from a product perspective, a customer perspective, a global perspective.
We will consider, you know, all of those in a structured, organized manner. Some of you know, and there have been, I think there has been one transaction that has happened already. I think the key, Thomas, you know, says this, you know, quite eloquently. The key is to, when companies partner, is to find the right cultural fit. If I just talk about our partnership in India, on the agriculture side, we've got a very large partnership with Deepak Fertilisers in India, and that partnership works because of common values, common intent, common purpose. You know, and you can see how that partnership has been good for them and good for us, you know?
As Glenn says, you know, here's another example, you know, of a partnership that we're building, that we'd like to have the same outcome as we've seen on the Deepak side. We'll continue to explore that, but I think what I will also give you comfort on is, you know, we won't tell you just about what we want to do, we will also show you what we are doing, and I think we will manage capital very carefully. You've seen us do that. I often tell our board, "You must hold me accountable for what I do and what I don't do." I must show you things that we've looked at, and the board discusses why we didn't do those things.
And I think it's very, very important for companies to be very clear, you know, what they do and, you know, not to just go out and do a partnership or a deal for the sake of doing it. You know, a lot of you have said there's clearly been more failures in this space, and actually, if you look at where we've come from, you know, this management team had to unwind certain partnerships and deals that were done, you know, in the 2016, 2017, 2018, 2019 years. I think what you can see is we're well-positioned, we're at the table, we've got people across the globe engaging and looking for those opportunities. And, you know, here is an example of that. You know, Thomas says...
You know, Scott phoned him up, and I think our initial meetings with Thomas has not been in the last few weeks. You know, we've been having these discussions for quite a while and got to know each other and then got to an agreement stage and a distribution, you know, so not just the shareholding and the sole distribution in certain spaces. Okay.
Good morning. The question I have is just to help with the chemistry of nitrate-based versus peroxide-based emulsions. So what are we talking about in terms of the content of energy that you need for both? Are you able to give us a factor? Like, what percentage do you need, or volume would you use with peroxide versus nitrates? One, so I'm just looking at volume, so how much you need to produce to enact the same amount of energy for obviously different ores. That's one. The second one is nitrous oxide. Obviously, the world is talking more about carbon than nitrogen. How do you convince miners that they need to have their eye on nitrous oxide rather than on carbon, which is the key greenhouse gas emission focus?
Why I speak about that is no one is disclosing that. The third one is obviously the license, at least for local producers. The air emission license will include nitrous oxides. Would local producers, miners take that into consideration when you sell this, if they were to find it cost effective to use Hypex than nitrous-based?
This is, this is for me. Very good questions. The first is, it's currently obviously based on European standards. Obviously optimization and usage comes into this, but it's like for like. We assume like for like at the start, and with various optimization, we can outperform. So we assume like for like. So you... One ton of ammonium nitrate-based emulsions versus one ton of Hypex Bio, the same. That's the basis.
What is the energy content at around?
3.6 megajoules a kilo.
For peroxide?
We can take this later. I can send you a complete data sheet. But you have to understand that the energy you use in explosives are not really all of that energy is not utilized to break the rock. You're using about 17%, so energy, it's just a part of it. It's also about how much gas do you produce, how much heat do you get? The detonation itself generates fractures in the rock. Those fractures are expanded by the gas generation. So we need to talk about impulse. We need to talk about how impulse in turn is driven by the volume generated of the gas. It's not a straight answer, but for any practical reasons, assume like to like, right? Now, the second, remind me, what was the second question?
Second one was-
Carbon versus-
Carbon, okay.
The nitrogen versus carbon.
We talk emissions. We are talking greenhouse emissions. Carbon is just one part of that. Water vapor is a greenhouse gas. Methane is a greenhouse gas. We are working, looking at carbon equivalents. What is the carbon equivalent to NOx gas? And so, as we discussed yesterday, Dirk, some of these NOx gases do not have a greenhouse equivalent. They're. They don't have so big of an impact. There are certainly greenhouse gases directly correlated to nitrate emissions, and one of those is laughing gas, N2O. It has a carbon equivalent that is about one to three hundred, and that's a tremendous impact. And secondly, ammonium nitrate production, to my knowledge, is completely dependent on the use of fossil fuels. It is produced by natural gas. It is produced by using coal.
So the emissions from a Scope 3 perspective, using those fossil fuels to produce the raw material are tremendous. In Europe today, if we can compare green hydrogen peroxide, where we use Norwegian hydropower, completely green, electrolysis produce hydrogen, take the hydrogen, produce hydrogen peroxide, and use it in explosives, compared to natural gas, traditionally coming from Russia, now Qatar and Norway. Running that into a process where we disconnect the hydrogen, we create the ammonia through the Haber-Bosch process, so the hydrogen, and then we need nitric acid to formulate the ammonium nitrate. If you compare those chains and look at the numbers, there's a massive difference.
Yeah, what I want to ask was, I mean, that's Scope 3, which is most companies, a huge number.
Yeah.
One and two, like everybody's considering-
Yeah.
Again, how can you say that so well? You know, most companies, Scope 3 is massive.
Yeah.
It's the one and two.
So Scope 1 is mainly looking at the carbon equivalents. The problem... This is sensitive. This is extremely sensitive. I don't wanna put anyone on the spot, but based on the studies we have done together with explosives companies, together with the mining industry, the NOx part of the emission is never included in any environmental, never. So if you include that, then it's different. And also, the majority of this data comes from theoretical simulations. You're using ideal thermodynamic conditions, and reality is far from ideal, far from. So what the industry need to do, and what we have done and also need to do more of, is to test detonator detonating explosives in gas chambers to measure what we actually get. That is the only way to do it. Right? It's a big discussion, but I hope you're satisfied.
Mm-hmm.
Your third?
Sorry.
Okay.
Yeah, I think we can discuss that further a little bit at the break, if-
... I'm still on Hypex explaining. How comprehensive and how defensible is the IP?
Excellent question, quite a classic. IP, to answer that question, you have to take or somebody has to take us to court. But we have three patents. I have previously been in patent litigation for other businesses, and it's built around a strategy and a structure which pinpoints a couple of parts of crucial technology which you need to make this work. So let's just say we can assume that we have a certain protection of one of the patents. Now, we are combining three. The combination of those three together forms a very strong case. And it's also important to understand that the IP protects the production technology, and the customer, the end customer, which is a mine, is very sensitive to IP protection.
In order for a supplier to win a contract with a customer, which we would potentially supply, is tremendous, because then they have to convince the customer that our patents are invalid. They will have to take us to court, and it's only then when we can say to what protection we have. I also want to add that IP is more than just patents, it's also know-how. All of those small details, the body of knowledge on how to actually do it, are not included and obvious from the patents. Which means that just by reading the patents, it's very unlikely you'll be able to produce the technology. Michael?
I've a further two questions for you. The first one, I got the impression that Boliden are only using your product in one mine. If that's the case, why aren't they using it in the others? The second one is, giving BME exclusivity in Canada, do you think that's the right process to go, given that using an incumbent, you could have got faster access to a bigger market?
Excellent questions. Both. The answer to both questions are rollout and trust. You cannot expect a mine that has complex operations spread out at a fairly large geographical area to implement this technology quickly. Remember, we started in twenty eighteen. We started testing in twenty twenty. We used to set up production for the first time in the world, deliver this to a mine, the first time in the world, to get the first contract. And the trust of that mine, which is the smallest they operate, is tremendous. Doing that in just seven years is unheard of. So we are on a... Obviously, I can't divulge all the details of Boliden, I'm under NDA, but what I can say is that they're a very clear rollout plan, and where they get most effect is the big operations, which we are going.
We are starting trialing large-scale open cut trialing this year, so.
Maybe you just want to tell us, your plant that you built on the mine, what capacity does it have? And was it built just for that specific mine, or was it built with a wide intent?
Seelan and Glenn here came to visit me up north in Sweden. It's very interesting. Anyway, so Boliden has been very generous to us. They have given us land to build a plant. So we have built a large-scale plant just adjacent to this mine. That plant has a production capability of 200 tons a week, which sufficient production capability to supply, I'd say, at least 70% of the northern Swedish market, including Boliden. So we have invested in large-scale production capability at that site with the intent, together with the customer, to supply all of it.
Mm-hmm. And then maybe just one other question. Did I read that your product's more suited to colder weather climates?
So when we endeavored on this journey together with Boliden, it was very clear that we developed this product for Boliden, for their requirements. And they said, "It needs to suit our conditions, it needs to suit our way of working, it needs," you know. Because I'm an engineer, and as Dirk said, I like to call a spade a spade, I cannot say it works everywhere, because I haven't tried it everywhere. We have tried it at Boliden. It's a colder climate. That mine has a temperature of eleven degrees, but we have operated in, say, 26, 30 degrees. We have done extensive testing, stability testing, up to 55 degrees. But that's not a real mine. Because we haven't done it in a real mine, I can't guarantee it. Probably is fine, but I can't guarantee it. That's my answer.
Yeah, maybe just a question for you, Ralf. As you're sort of growing the international strategy, so i.e., looking at the opportunity in Indonesia, Canada, Australia, what is your route to market strategy? Do you use your existing JV partners? You know, how do you really develop that opportunity to make it significantly commercially viable, you know, in time?
Yeah, thanks for that question. I think it's a combination of a couple of things. It obviously has got to do with our value propositions that I did explain already, which are, in some instances, fundamentally different, especially approach with the customer, the services and so forth. The partners bring a lot of knowledge, and aspiration and relationships, of course, and they are a little bit stifled, both in Indonesia and in Canada, specifically now, with not having the ability to expand their wings. So MNK in Indonesia wants to fill their own plant, and a Canadian operation wants to go and do some service on mining operations and not the civil space. That is one aspect of our, or my optimism in expanding the market.
The other is, as I said, we are in a lot of instances first movers in building infrastructure and assembly plants in specifically chosen regions where the competitors are not, and the mines appreciate that infrastructure, the supply security, and so forth. Of course, lastly, we also do have Tier One and Tier Two relationships throughout our forty years. You must remember that, and that's one of the reasons, fundamentally, why we picked those markets as well, which I didn't allude to today. If you look at Canada, West Africa, Australia, access through the globe, there's commonality in Tier one and twos. We operating with a lot of Tier one customers in West Africa that are actually Canadians and Australians. Yeah, it is a journey.
I think it's not easy, but I do believe we do have the value propositions and the infrastructure now ready to at least compete, and compete then, obviously, what will set us aside are the people and the services and so forth, which a lot of these markets are not enjoying at this point in time.
Thanks. Anyone else? No. Ralf, Thomas, anything else you want to state or close with?
No, I just want to thank everyone in the room for coming and showing interest, and also very interesting questions, which obviously demonstrate a lot of interest and in what we do. I wanna thank you for that. And also, Thomas, for, you know, creating a lot of hype in Hypex Bio, as I always say. No, it's great that you joined us, and could answer some of these questions, too. Maybe a word from you, Thomas?
Thank you for that, Ralf. Obviously, this is new technology. It's been a very, very hectic time for us. A lot of things have happened in a very short time, and we are struggling now. Struggling, we're quite excited, actually, by the growth. I mean, we have to build our organization, we have to scale our technology and all this, and there's hundreds of questions. I mean, you just touched on some of them. There's one thing I'd like to say: In the beginning of my presentation, I said that the technology development of existing explosives started in the seventies, and maybe some of you would agree, but my position is that the amount of technology we can develop on that platform is very limited. Very limited. We can do certain things, right? But very limited.
What we have in Hypex Bio is the start of a technology development, with, you know, this vision, where it can take us, but the amount of products we can build on that platform, from package products, initiation systems, potentially also fuels, is tremendous, because explosives are about energy, and right now, we're breaking rock with that energy. What else we can do with that, we don't know. So it connects into the hydrogen economy and the green eco-economy, and based on what I know so far, is that we can make this work. As I said, maybe not tomorrow, but certainly for the future, and I'm really excited, as an engineer, to see where this can take us. So I'm excited about this partnership, and thank you so much, Elon.
So thank you, Ralf, and thank you, Thomas. Thanks to the BME team. I think Stefan and I feel like we didn't earn our keep today, 'cause we didn't speak a lot, but that was by design. I think what we're showing you today is that the seventy-year-old company is a lot more than just an agriculture company. It's a lot more than just a mining company, but it's a company that's positioned well for the future. You can see how we have been diversifying our earnings from agri to mining, but also, you can see how we've diversifying our earnings and growing our earnings, actually, from SADC, Africa and globally. We make the point that we've done that based on partnerships. We've done that in a very slow, considered manner.
We've rejigged the machine in certain spaces, where we've come out of certain investments, and we've put investments in different spaces. And today, we're showcasing you one of those futuristic partners, and that we believe position Omnia and BME in the space for global sustainability. And by that, I don't mean just sustainability from what we do and emissions, but sustainability from a financial, a profitability and a growth perspective. So thank you all for coming. Nerina, I'm assuming there's lunch. There's-
At Riley's Cafe.
Okay, there's lunch at Riley's Cafe. I'm sure there's someone who will tell us where Riley's Cafe is—'cause I've never heard of it before. But thank you for coming. If there are any other questions, please engage with the management team. Email us. You know where to find us, and we look forward to seeing some of you week after next at the next conference. So thank you very much for making the time. We know your time is valuable. Thank you.