Good morning, everyone, and welcome to Anglo American's 2024 results presentations. Just a few words from me before I hand over to Duncan and John, and starting, perhaps unsurprisingly, with safety. Our very first value in our company is safety, and that cannot and must not ever change. We will not and cannot rest until we have created a safe workplace for everyone. We constantly work to improve our performance in this area. However, I'm very sorry to say that we had three workplace fatalities in 2024, which is, of course, not only tragic, it's also completely unacceptable. And it would be inappropriate of me not to mention that right up front. And Duncan is going to talk more about that during his presentation. Now, as many of you know, in 2024 and early 2025, we have seen substantial change at this company.
We've made significant progress since we accelerated our strategic execution in the first half of last year, and the management team has delivered on all fronts and with some pace, not only in improving the operational and cost performance of the underlying business, but also, of course, in the simplification of the portfolio. And you've seen some of those changes coming through a little late. Now, the board has no doubt that what we are seeing is a stronger and a more valuable Anglo American emerge from this. But it is a journey, of course, and we have further to go. Now, briefly on board changes, there was none in 2024, but Anne Wade joined our board at the beginning of this year and attended her first board on Tuesday and has also joined the audit and the sustainability committees.
Anne spent most of her executive career in the asset management industry and a lot of that at Capital Group, which coincidentally and incidentally is now one of our largest shareholders, but they're not linked, and she has formally served on the board also of Holcim and John Laing Group, and we very much look forward to Anne's contribution to our board going forward. That's it from me, nothing further to say. Let me hand over to our Chief Executive, Duncan Wanblad. Duncan.
Thank you, Stuart, and good morning, everybody. It's good to see you. It's been a pretty busy year, so we've got a lot to get through today. 2024 saw us transform our performance with a very strong delivery on all fronts, I think, as we set ourselves up to implement our sequence of exceptional options on copper, iron ore, and crop nutrients growth. The three key strategic pillars of operational excellence, portfolio simplification, and growth have been our focus during the course of this year, and we have made material progress here on each one of these over the last year. Driving operational excellence and bringing our assets to best in class is, of course, going to be a continuous and an ongoing journey.
But we are seeing positive results from resetting of our mine plans a year and a half ago and the organizational design that we have now got focused on supporting work much closer to where the work is actually done. Now, despite our basket price falling by 10%, our actions to take out unprofitable production and excess costs have kept our EBITDA margin stable at 30%, with full year EBITDA of $8.5 billion. Our focus on this operational leverage in the business and our simplified portfolio will mean higher margins going forwards. We realized cost savings in 2024 of $1 billion and have used the portfolio simplification as an opportunity to rethink cost structures from the ground up. I'm very pleased with the progress that we've made on this transition.
We've executed swiftly and for value, with a steelmaking coal sale that we agreed for up to $4.8 billion and more announcements made during the course of this week, and I'll talk to some more of those later on in this presentation. Our focus will now increasingly be turning towards value accretive growth in the three pillars of the business: copper, iron ore, and crop nutrients, and our set of strategic enablers, sustainability and technical competencies, our culture, our reputation, and our customer solutions are all integral to delivering the full value potential of this portfolio. I'm going to unpack through this presentation some of these things, but I would just like to add an overarching comment that our focus remains on value creation, not simply more tons.
I feel confident that we now have a level of strategic ability and agility to create more value for all of our shareholders. Now, before we move into the results in some detail, there is, as I said, quite a lot happening in Anglo American, and I'm happy to share some of the highlights of this and what we've announced in the last few weeks. Having achieved a strong finish to 2024 and met our production guidance across all of our businesses, this was led by solid performance in both copper and iron ore businesses. We announced today that we will partner with our neighbors at Codelco to develop a single mine plan for the combined Los Bronces and Andina resources, which will create at least $5 billion of pre-tax value between the two of us with no significant incremental capital expenditure.
We have agreed the sale of our nickel business for up to $500 million, which performed very well during the course of last year despite the very challenging nickel markets. In 2024, we achieved cost savings of $1 billion. Now, that equates to $1.3 billion on a run rate basis, which is ahead of schedule, and we are on track to deliver the full $1.8 billion on a run rate basis by the end of 2025. We also managed to keep net debt flat despite lower prices for our commodities by focusing on cost control and prudent financial management. John's going to talk a bit more about that in his section. We have now clarified the pathway to complete the de-merger of our PGM business by the end of June, and we've also taken the decision, primarily to manage flowback, to initially retain a stake of 19.9% in that business.
Now, this helps the independent platinum team start their new journey with appropriate leverage and also allows us to further reduce Anglo American's leverage from the PGM de-merger responsibly over time. Finally, we are already seeing the future Anglo American emerge, which will have higher margins and higher returns. We remain on track to be substantively complete with the transformation by the end of this year, recognizing, of course, that the timing of De Beers separation for value is somewhat dependent on early signs of a diamond market recovery. Our number one value and our first priority has to be safety, and nothing is more important than that to me. It is so important that we do ensure that people go home every day safely to their families and their friends. Safety and operating performance, I do believe, are inextricably linked.
As the stability of our operations has improved, so we have seen a step change in the reduction of our injury rates, resulting in a 28% improvement over the two-year window since 2022. 2024 was our best ever full year performance as far as Lost Time Injury Frequency Rates are concerned. Together with the improvement in these injury rates, the severity of our High Potential Incidents continues to trend downwards, and I am confident that we are on the right track, but just not there yet. Despite this progress, it deeply saddens me to report the loss of three colleagues in two separate incidents at our managed operations during the year. We will continue to drive our values through the transformation in both our organizational and our operational capabilities.
Our focus remains on more effective planning and our leaders spending more quality time in open conversations with their teams. We can see that this does help to drive open conversations, and it does help to role model the behaviors that we want to instill in all of our people through a process that sets clear expectations, shows care and respect, and builds trust to empower personal safety ownership. Now, as you will have seen from our quarter four production result, we delivered on our 2024 production guidance across the board. 2025 and 2026 guidance is largely unchanged, and that reflects the stability that we're now achieving with the operating model and the right mine plans. We have added guidance for 2027, which is again in line with our prior expectations and provides that strong platform for future growth.
In 2024, our copper assets delivered a solid operational performance, and in Chile, our decision to put the smaller and the more costly processing plants at Los Bronces on care and maintenance has absolutely helped that operation to generate a 23 percentage point improvement in EBITDA margin. At Quellaveco, the stripping and pit development work is progressing well, and other phases being mined and opened up now will increase the flexibility of that pit in the medium to longer term. It is absolutely a remarkable asset that, and it is one that produced its copper last year at $1.05 a pound and is expected to consistently produce over 300,000 tons per annum in the years to come.
At our premium iron ore assets, Kumba delivered in line with the reconfigured business plan, which aligns, of course, its production to third-party logistics performance and has scaled back its cost base to achieve this without any compromise to its competitiveness. Minas-Rio, in Brazil, achieved a record performance during the course of last year as all of its operations consistently delivered against their plan. A quick comment on the ultra-high dense media separation project, commonly called UHDMS, which is currently underway at Sishen. The tie-in of the modules of this project is going to have a 4 million ton impact to production in 2026. This will not, however, flow through to sales because we do have sufficient product in stock to take us through the tie-ins and the commissioning period.
The UHDMS will treble production or certainly Sishen's proportion of premium quality production, and it is a really value accretive way of maximizing value within the logistics constraints of that business. Now, in the businesses that we are exiting, in PGMs, there was a good performance considering the self-imposed safety stoppages at Amandelbult during the fourth quarter. The stability of our processing assets allowed for the release of built-up work in progress inventory, and we are now back to more normalized levels there. At De Beers, the rough diamond market trading conditions in 2024 remained extremely challenging. Persistently high midstream inventory levels and a prolonged period of depressed consumer demand in China resulted in rough diamond sales falling sharply in the second half of the year.
Consequently, we reconfigured production, and we removed 6 million carats in response to these conditions last year, and we will do the same with another 10 million carats in 2025. Now, that said, there are encouraging signs that the acute negative conditions that we saw at the end of 2024 may lift with better diamond jewelry sales seen in the U.S. and India over year-end, but we do believe that it is appropriate to get ahead of these issues and therefore the proposed production cuts. In nickel, the strong operational performance and process stability demonstrated in 2024 resulted in a higher confidence for 2025 and 2026, which has led to a modest increase in our production guidance there. We will provide more detail of the sale that we announced on Tuesday in just a few moments.
Lastly, in steelmaking coal, we expect the sale to Peabody to close in or around the third quarter of this year, and we have already completed the $1 billion sale of our minority interests in Jellinbah. Now, as I said at the outset, I really am delighted with the progress on the portfolio simplification and the shareholder value that we are unlocking as a result. We've touched on the steelmaking coal sale, which will generate $4.8 billion of proceeds, and we got there quicker and at greater value than was generally anticipated. John will touch on the taxes and the transaction costs in what I believe was a really well-executed deal. I'm also very pleased with the sale of our nickel assets for up to $500 million, especially considering that these assets were under consideration for care and maintenance not that long ago.
Credit there to the team who rapidly had to adjust their operational plans in the context of some really tough prevailing nickel market conditions. The transaction structure gives us upfront proceeds, but also allows us to retain some of the upside as and when nickel prices recover in the coming years, and we expect this transaction to be completed during the second half of this year. Our de-merger of Anglo Platts is very much on track for the middle of this year, and I'm going to touch on that in a bit more detail on the next slide. Now, on De Beers, we are continuing to work towards a separation and exit as soon as makes sense to do so. It is worth remembering that this business has some of the best diamond assets and the best diamond mines and resources in the world.
It has an iconic brand and is a global leader in the industry. We continue to believe that the headwinds from lab-grown diamonds are surmountable, and we see meaningful long-term value in this company. We are going to do what we can to protect the value in what is really challenging near-term market conditions. We have agreed a framework to move forward with the government of Botswana on our sales and mining license agreements, and this helps us to provide stability and confidence to the wider diamond sector. John will discuss later some of the measures that we are taking with the De Beers team in terms of managing into this near-term weakness. But let me be unequivocal. There is absolutely no change in our strategic rationale for the exiting of this business, and we are setting up De Beers to thrive as a standalone business.
More specifically, now on the Anglo Platinum de-merger, key milestones leading up to the de-merger date include an Amp lats Capital Market Day, which is going to happen late in March, and then the publishing of their prospectus along with our shareholder circular in early April. This is then followed by the required shareholder vote, which will happen at a shareholder meeting at the same time as our AGM at the end of April, following which the de-merger will then occur in June. We are now finalizing the key elements of the de-merger arrangements, and there are two focus areas in order to ensure success for all of our stakeholders. Firstly, responsibly managing the flowback, and secondly, capital allocation.
While the de-merger gives Anglo American shareholders the flexibility to make their own decisions about their investment in Anglo American Platts, we remain extremely positive about the case for PGMs and the Amplats investment case in particular. It is inevitable, however, that de-mergers, particularly in different primary listing jurisdictions, are going to result in some turnover in the shareholder register, and proactively selling down a proportion of our shareholding has indeed already helped manage that risk. At the same time, it also raised approximately $900 million of proceeds for Anglo American.
The proposed additional listing of Anglo Platts on the London Stock Exchange is also designed to mitigate the impact of flowback to shareholders, and in addition to these steps, we decided, as I said earlier, to retain a 19.9% stake in the company following the de-merger, which we believe is consistent with our intention to deliver the separation responsibly and optimally structure the capital in both of the businesses. Now, we intend to remove all board representation and deconsolidate our interest from the time of the de-merger so that this does not interfere with a clean break. We are fully supportive of Anglo Platts' team in setting out their independent course following the de-merger.
Consistent with this, Amplats announced its final dividend for 2024 and an additional dividend, together totaling approximately $900 million ahead of the de-merger, which allows them to deliver their strategic plan and be resilient without having to rely on improving prices. Now, this will result in an aggregate dividend of approximately $600 million to Anglo American. Lastly, we intend to implement an Anglo American share consolidation upon de-merger, and this makes sure that the share price and the per share metrics of Anglo American will be comparable before and after the de-merger. This will impact the number of shares that each shareholder holds, but as it's done on a ratio basis or a pro-rata basis, the overall ownership percentage will not change.
Let me now hand you over to John, who's going to take you through the numbers and the guidance, and then I'll come back and then walk you through what we're going to do with the company and the portfolio that we've got going forward. Thanks, John.
Thank you, Duncan, and good morning, everyone. Over the last year, we've focused on delivering consistently strong financial results with special attention to cost efficiency and cash generation. I'm pleased to say that the business has responded well. There's a real energy across the group to deliver on commitments, and tangible progress is evident in our 2024 results. Production was 7% lower than last year, but in line with our expectations. The year-on-year movement being largely due to the Grosvenor fire and our own actions at De Beers and Los Bronces to focus on value over volume.
Revenue was 12% lower, largely driven by a 10% reduction in basket price. Notwithstanding this $3.9 billion reduction in revenue, the EBITDA reduction was only 1.5. This was due to our deliberate and significant action to reduce costs and is evident in our EBITDA margins, which have been broadly maintained at 30% despite those lower volumes and prices. We saw a significant step up in cash conversion to 97%, reflecting a laser focus on working capital, where we realized a $1.8 billion inflow, with working capital and cash management becoming a common language right across the group. This strong operating cash flow allowed us to maintain net debt flat at $10.6 billion after dividends and growth CapEx.
Our net debt to EBITDA now stands at 1.3 x, which remains within our target range of less than 1.5 x at the bottom of cycle, and with substantial proceeds from our portfolio simplification still to be received over the coming year. This all allowed the board to recommend a final dividend of $0.22 and bring the total 2024 dividend to $0.64 per share in line with our 40% payout policy. EBITDA at $8.5 billion was $1.5 billion lower than last year, and you can see here that this was driven by the lower basket price, mainly iron ore. The effect of CPI and lower volumes were offset by our cost-saving actions, which realized $1 billion in the year. Those $1 billion of cost savings have been delivered across each of our businesses and corporate center, as shown here.
The phasing of the cost savings in the year means that on a run rate basis in 2024, we've now delivered $1.3 billion, which is ahead of our targeted $1 billion run rate at this point. As I'll show in the next slide, this has not been easy given the impact on our people, but of course, it was necessary. Our cost savings have been realized in three main areas: operational headcount, operational efficiencies, and corporate streamlining. Starting with operational headcount, we had a 19% reduction in Kumba and a 15% reduction in PGMs. These were challenging decisions to take and impacted many colleagues, families, and communities. But of course, it was done in a respectful and responsible manner in keeping with our values. Turning to operational efficiencies, our focus on cost and cash is driving a renewed energy for continuous improvement.
There are many examples across the group, but I'll call out a couple of the more significant. Firstly, across our copper assets at Los Bronces, El Soldado, and Chagres in Chile, we saw total operating costs decrease by 21%. This covered many areas but included a data-driven review of our load haul activities at Los Bronces, allowing a 16% reduction in our haul truck fleet. Secondly, we realized a $0.2 billion reduction in PGMs from consumable costs. This included diesel, explosives, chemicals, and tires, following significant supplier negotiations, and finally, through our corporate streamlining, we realized $0.3 billion of cost savings in corporate overhead and corporate initiative costs. This included streamlining resources across many functions as we move work more close to our operations. Finally, on costs, I'm pleased to say that we're well on track to delivering our committed $1.8 billion of savings.
Having already delivered a $1.3 billion run rate in 2024, we will deliver the remaining $500 million as the portfolio simplification continues over the course of 2025. This balance will be largely in the corporate center, including further headcount reductions and initiative savings. While the full $1.8 billion run rate will be achieved by the end of this year, we expect realized savings in the year to be around $1.5 billion, an incremental $500 million compared to 2024. As a reminder, we're taking the opportunity as we reshape our portfolio to reset many of our corporate processes and ways of working. We will be a more nimble, streamlined business with more work taking place closer to our assets and communities. This will be more efficient and cost-effective, and I'm confident that in time, this will allow us to realize even stronger financial outcomes.
Rounding out on EBITDA, it's worth standing back to look at the relative contributions from our businesses. Copper and iron ore represented 76% of our EBITDA, with EBITDA margins of 50% and 40% respectively. These margins have been supported by the cost actions described earlier, which are further evidenced in the reduction in unit costs in both businesses. Those unit costs in copper were supported by putting the second Los Bronces plant on care and maintenance, as well as favorable foreign exchange, while iron ore benefited from significant cost savings at Kumba and the record volumes delivered at Minas-Rio. Of course, De Beers was break-even in the year, and I'll come back shortly to describe the actions that we're taking there.
Looking briefly at other items affecting earnings in the year, the underlying effective tax rate was 41% up in 2023, primarily driven by the mix of profits and associated country tax rates. Also, the overall lower profit at the group level meant that there was a proportionally higher impact of those countries which are loss-making from a tax perspective, including the U.K. On the special items reported outside of underlying earnings, the most significant impact was the $2.9 billion impairment at De Beers. This reflects our latest views on market outlooks given the weaker-than-expected 2024. The key changes since last year being a slower recovery in China and a larger impact from lab-grown diamond penetration. In essence, while there is no change to our belief in the long-term prospects, we see more of a U-shaped recovery from here.
Staying with De Beers, I'll now give a little bit more context to current trading conditions and how we're managing the business in that environment. Rough diamond trading conditions continue to be challenging. The ongoing economic challenges in China, which are impacting many luxury sectors, have led to a more than 40% cumulative reduction in consumer demand for diamonds over the last two years, and with China previously being the second largest and fastest-growing market for diamonds, this has had a significant impact on both polished and rough diamond demand. As a result, Chinese retailers have been selling excess polished inventory back into the midstream, and this has added even further to an already high level of midstream inventories. The obvious impact of this has been a significant decline in rough diamond demand as midstream inventories have looked to normalize.
You can see this on the chart where midstream inventories increased through the first half of the year before starting to reduce through the second half. This was evident in the rough diamond revenue profile for De Beers in 2024, where first-half revenues were $2 billion compared to $800 million in the second half, and this lab-grown diamonds also continue to have an impact on natural diamond demand, primarily in the U.S., although we do expect that to lessen as prices for lab-grown diamonds continue to decline, further bifurcating the natural and lab-grown diamond markets. Of course, while these market conditions are frustrating, we have not stood still as a business. We've had an intense focus on the cash performance and proactively cut 6 million carats of production in 2024, managing to slightly reduce our inventory after a couple of years of significant increases.
In addition, we reduced overheads by around $100 million. As we move into 2025, conditions remain challenging, with our first sight continuing at similar levels to the back end of 2024, with sales of $130 million. There are, however, some positive signs at the retail end, with credit card data showing jewelry purchases in the U.S. increased 8% in December, and this will help to reduce those midstream inventories. In the meantime, we're taking all necessary actions to mitigate the financial impact of current market conditions, including further production cuts, CapEx reductions, and cost savings. We also continue to focus on preparing De Beers for separation. The conclusion of the sales agreement negotiations with the government of Botswana was an important step in this regard, securing our long-term access to the world's best diamond resources.
Moving on now to our cash performance in 2024, our sustaining attributable free cash flow at $1.7 billion was $1.6 billion higher than last year, despite that lower EBITDA. This was driven by a strong working capital performance, where we saw a $1.8 billion inflow compared to a $1.2 billion outflow last year. The inflow was driven by receivables and inventory, partly due, of course, to lower volumes and prices, but also a structured and disciplined focus on a number of key areas. Firstly, payment terms for both sales and purchases. Secondly, prompt collections. Thirdly, proactive finished goods inventory management across PGMs, De Beers, and Kumba, and finally, close management of consumables inventory across all businesses.
While we won't be able to deliver 97% cash conversion every year, I have been pleased with how the business has responded to the challenge, and we are embedding a deep appreciation of the criticality of working capital management right across the group. Our sustainable attributable free cash flow largely funded our growth CapEx and dividend for the year. Growth CapEx primarily comprised of Woodsmith at $0.8 billion and $100 million at Collahuasi for the first stage of the debottlenecking plant. $500 million of other cash flows include the $0.9 billion received from the two platinum book builds in the year, partly offset by movements in lease liabilities, foreign exchange, and fair value movements.
Net debt to EBITDA at 1.3 x is within our target range of less than 1.5 x at the bottom of cycle, and going forward, we will see further strengthening as we receive cash proceeds from our portfolio transformation. Now that the portfolio transformation work has well progressed, I've set out on this slide our latest view on the net proceeds from the three agreed transactions. Firstly, on steelmaking coal, most of the non-contingent proceeds of $3.8 billion are expected to be received. Of this, around $1 billion has already been received in respect of the Jellinbah transaction. For this non-contingent element, the transaction costs and taxes are expected to be about $200 million. On the remaining $1 billion of contingent proceeds, which is dependent on prices and the Grosvenor restart, we anticipate another up to $200 million of tax.
On nickel, $350 million of non-contingent proceeds are anticipated to be received in 2025, with negligible costs and taxes. And in 2025, the net effect of the dividend declared by Anglo American Platinum, the cash to be demerged, and settlement of intercompany charges payable by Anglo American Platinum based on the numbers at the 31st of December would largely be net debt neutral. And obviously, the actual net debt movement will be dependent on the actual balances at the time of the demerger. We expect taxes to be around $400 million in 2025. And as stated in our press release on Monday, we will initially retain a 19.9% shareholding at the point of demerger to limit flowback. This worked very well in the previous demergers of both Mondi and Thungela.
We will reduce this stake responsibly over time, but at current share prices, this would realize around $1.7 billion of proceeds with no further material taxes expected to be paid. One final point to note on cash in 2024 and early 2025, we agreed to buy in on a number of our pension plans in the U.K., essentially passing the liabilities to an insurance company. There is likely to be a cash surplus of around $200 -300 million across those schemes as they are wound up, and that cash will come back to the group over the coming years. So, as you can see, we really are setting the business up with a sound financial footing. The sound financial footing will be married with a much stronger operating business in our future state. This slide sets out our 2024 results on a pro forma basis post transformation.
It reiterates the messages that we conveyed when we announced our accelerated strategy last May. Our new business will have higher margins, higher cash conversion, and higher return on capital. Turning now to guidance and looking first at our copper businesses. Unit costs will be maintained in line with 2024, with the impact of lower volumes at Collahuasi and the full year impact of the Los Bronces plant being in care and maintenance being offset by the full year benefit of the cost savings that I discussed earlier. In iron ore, we expect a 3% increase on the 2024 unit cost to around $36 per wet metric ton, and with Kumba's unit cost being flat on 2024, while Minas-Rio is impacted by the lower volumes as a result of the pipeline inspection that's taking place this year.
I've included unit cost guidance for other businesses in the appendix to the presentation. Group underlying effective tax rate guidance for the entire portfolio in 2025 is expected to be between 40% and 43%, and for the simplified portfolio, we currently expect a long-term underlying effective tax rate of between 38% and 42%. Our group depreciation guidance is unchanged from 2024 at $3- 3.2 billion. As previously guided, we also expect to incur restructuring costs of around $400 million for delivering the incremental cost savings, with most of this to be incurred in 2025. You can see here CapEx guidance for the next three years on both a total group and simplified portfolio basis.
You will note that the simplified business sees sustaining CapEx at around $2 billion per annum, while growth CapEx is focused on copper and iron ore, with Woodsmith limited to $300 million of CapEx in 2025, with expected OpEx also in Woodsmith of $100 million in 2025 and 2026. The main growth projects include Collahuasi and Quellaveco debottlenecking and the UHDMS project at Kumba. We've also provided some early estimates of our potential growth spending in 2026 and 2027 for our 1 million tons copper target. However, we would note that this includes unapproved projects, which could be subject to change based on timing and permitting, and in particular as we develop the plans around the Los Bronces and Andina joint mine plan, which could defer a portion of this capital spend. I'll finish now with a quick recap on the key points.
Despite a 10% lower basket price, we maintained EBITDA margins with a laser focus on costs and efficiency. Cost savings are being delivered ahead of schedule, with $1 billion realized in 2024, and with a run rate of $1.3 billion entering 2025, we're on track to achieve our $1.8 billion of committed run rate savings this year. We delivered 97% cash conversion and maintained net debt flat at $10.6 billion. Our agreed transactions will realize significant cash proceeds in 2025 to further strengthen our financial position, and our simplified portfolio will not only have a strong financial position, but we'll see enduring, resilient performance with higher margins, higher cash conversion, and higher return on capital. Thank you very much, and I'll now hand back to Duncan.
Thanks, John. I'd like to focus now on why we believe our simplified portfolio provides a really compelling investment proposition.
We will be focused almost entirely on future enabling products, each with an outstanding growth potential and well placed to deliver into the demand growth trends of energy transition, improving living standards, and food security. We have a copper business with exceptional assets and a pathway to growing annual production to over a million tons. We have an iron ore business where the UHDMS project at Kumba will increase our product quality and enhance our margins, and where the Serpentina addition at Minas-Rio offers significant value upside through synergies, scale, and higher quality iron ore. Lastly, we have a crop nutrients business with Woodsmith, which is a tier one asset by any definition, and I'll touch on that a bit later on in the presentation.
As we've said before, with this simplified portfolio, we believe that we will be able to drive much more value and have that value better recognized. Turning to the largest component of our simplified portfolio, which is copper. Over the last 20 years, the industry has seen an increase in the operating costs and the capital intensity required to develop new copper projects. This has meant that the industry returns really just haven't been high enough to incentivize new investment, and as such, the approvals needed to develop copper projects to meet future copper demand are lagging behind. This is where Anglo American, I think, is in a unique position.
Our growth portfolio comprises largely brownfields projects that we expect to have lower capital intensity and thus higher returns than greenfield projects, and these are assets that we know well in areas where communities know us well and therefore must be lower risk growth options. We also have world-class tier one endowments at Collahuasi, Los Bronces, and Quellaveco, and all of that helps us to generate around 3% of the world's copper production, and these three assets alone account for almost 6% of known global copper reserves and resources, thereby enhancing our ability to deliver into the anticipated copper supply shortfall, which we see coming in the next few years. Now, what's more is that the size of our copper reserves and resources is not the only thing that makes our copper portfolio stand out from the rest.
It's also our competitive cost positioning, along with the quality of the resources. Our combined copper assets are more in the first quartile of the industry cost curve, allowing us to bring on more value accretive and cost competitive production at scale. It is, of course, not enough to only just have high-quality resources, but you also need, of course, the capabilities to operate and develop them further, and this is where our technical capabilities, our sustainability, and broader community experience come to the fore. This is not a nice to have. They are critical skill sets for success, and they take a very long time to develop. As you've heard me say before, we brought Quellaveco into production on time, on budget, all against the odds during COVID, in large part because of the incredible work that so many of our embedded teams do.
This is a project that was delivered in the right way for all of our stakeholders, further by building our valuable and differentiated institutional knowledge base, which we have developed over decades, from which we can deliver the current organic growth pipeline. Now, one of our high-quality endowments is Los Bronces. Los Bronces is already over 150 years old, and it has many, many more years to come. The MOU that we announced today with Codelco is a real breakthrough on how we can work together to make the most of the spectacular resource. From the striking aerial photograph that you can see behind me here, you can see the two mines sat right next to one another. Frankly, it's hard to imagine a more obviously synergistic adjacency. Those synergies, however, go well beyond mining that wedge that exists between the two mines more efficiently.
Looking forward, the grade profile of Andina is somewhat higher than that of Los Bronces. It's about 0.8% copper versus Los Bronces' 0.5% copper. But by contrast, Los Bronces has a much higher processing capacity. We're sat with 50-55 million tons compared to about 30-33 million tons at Andina, and we have a leaching plant too, of course, whereas Andina does not. By optimizing the mine plan, which includes the above-ground infrastructure, we therefore bring forward large volumes of copper for the benefit of both Andina and Los Bronces. The teams have worked together on a mine plan which combines these resources, and at the moment, this shows more than 2.7 million tons of incremental copper delivered over a 21-year period.
Now, given the nature of these synergies, we can achieve all of this without material incremental CapEx, and we can do it safely, and we can do it much more efficiently than would be possible to each of us on a standalone basis. Now, at the moment, the joint mine plan envisages C1 costs to also be around 15% lower than on a standalone basis. Now, when you put all of that together, we can already see a clear path to more than $5 billion of pre-tax synergies on a net present value basis that we would share between the two sides. Building from a very long history of working together and a tremendous cooperation that we've had in setting up this joint mine plan, it is really exciting to see what can be achieved together.
This is really a smart piece of deal-making because it is important for both of us, Anglo American and Codelco, that we retain control of our assets and have the flexibility to pursue standalone projects. That's why we've now agreed, and so this is what we have now agreed, and so through this approach, we still have the ability to develop Los Bronces underground by ourselves, or indeed, should it be better to do so, we could do it jointly if that becomes the best option at the right time. We're also intending that after the joint mine plan period, we could go back to optimizing the next phase of these mines independently, so that's 20 years' time, and so we still have that long-term endowment at our disposal.
With this MOU in place, we will now continue to work with the Codelco team to get definitive agreements in place and signed by the second half of this year, and after that, we will also look to get the approvals and licenses in place, which will then allow us to start delivering incremental copper from 2030. My thanks to both the Codelco and the Anglo teams for working so creatively to get this very bespoke arrangement. I believe it is a spectacular example of thoughtful cooperation, and all stakeholders stand to benefit from this. Now, you would have seen this pathway before, but it shows that not only do we have the copper assets, but we also have a pretty well-sequenced pathway to producing over a million tons of copper from these assets.
Our projects are largely brownfields, and they are well advanced in the planning and the permitting stages. Inherent in our pathway to a million tons is a great deal of optionality at the lower capital intensity. At Collahuasi, there is an option of a fourth line expansion supplemented with a full debottlenecking project, the expansion to 150,000 tons per day at Quellaveco, which would benefit production from late 2027, the restart of the smaller Los Bronces processing plant later on in the decade, and the potential development of Sakatti in the early 2030s. It's a great lineup of copper options to have, and we intend to bring them on responsibly and for value. On top of all of that, I think it is also important to touch on exploration, as this ultimately feeds our long-term growth pipeline.
As you can see from the map, we're maintaining active greenfield programs across the globe, targeting mainly copper and copper byproducts. We are currently conducting exploration, which includes drill testing a number of promising mineralized systems. Yeah, our near asset exploration is focused around Quellaveco and Los Bronces, and I'll talk to that in a minute. We're encouraged by the results that we're seeing across many of our greenfield exploration programs, and this includes jurisdictions such as Angola, Canada, and Germany, all of which only adds to the confidence that we have in our long-term growth story. Now, looking more closely at Quellaveco, in May last year, we published an exploration target for the depth extension of the Quellaveco ore body, which we have subsequently now tested with four deep drill holes.
These holes have confirmed the geological hypothesis behind the target, with potentially economic mineralization confirmed to continue at depth below the mineral resource limits in the south, the center, and the north of the Quellaveco deposit. The copper grades intersected in all four of these drill holes match or are higher than the average grade of the mineral resource and ore reserve, and include the highest grade intervals of 170 meters at over 1% copper and 102 meters at 0.94%. There is further potential to intersect and define a high-grade core of that deposit through ongoing drilling. The program is planned to continue over the next few years with several new deep holes this year now in progress.
Moving on to iron ore, it is clear that when you look at this graph on the left-hand side, that the iron ore products that we produce at Anglo American compare very favorably to those of our peers. The Kumba UHDMS project significantly increases the proportion of premium quality production at Sishen and serves as a valuable addition to the mix of products that we already produce at Kumba. We now also have the Serpentina resource at Minas-Rio, and this provides us with an option of expanding our production of very high-quality DRI grade iron ore, where we are seeing already an increase in demand for this product as steelmaking geographies evolve and natural gases are more and more used as power sources for steelmaking.
The optionality in our iron ore business provides us with a lot of control over the medium term on how we best extract value from this important segment of our business, which helps to provide scale, cash flow, and diversification. Finally, onto Woodsmith. We slowed the development here last year as we needed to work through the wider restructuring, and we have certainly not stopped work, though, especially as we continue to see some very promising results in our market development activities, which I'll come on to. The project has two deep shafts: a production shaft, this is the one that we paused halfway through last year at a depth of approximately 700 meters, and a service shaft that we are continuing to sink.
We need to make progress in the sinking through that sandstone layer that we spoke about in previous sessions like this to give us the data that we need to complete a feasibility study. The sandstone requires extra water management and is a much harder rock to mine. We are now there in the sandstone. We're just 10 meters into it, and it's a roughly 250-meter thick structure, and we expect to get a much better sense of the development rates and therefore the capital expenditure that will be required to get to shelf bottom during the second half of this year. Now, when we decided to slow Woodsmith down last year, we said that there were three conditions that needed to be met before we would fully sanction the development of this project.
Firstly, we need to complete the feasibility study, which includes getting through some of the sandstone to get us the data and the information that we need for the capital estimate. The second condition is to bring on a strategic partner. Discussions are ongoing with potential partners. However, this condition can really only be meaningfully met or progressed once the studies have been completed, and lastly, we do need to ensure that we have significantly deleveraged our own balance sheet, and as you've heard from John's financial update earlier, we've kept net debt flat through the financial discipline that we've maintained in 2024, but there is still a journey for us to reach our long-term leverage goals. Now, at this point in time, we don't see these conditions being satisfied before 2027. We continue to see huge potential, however, in the value of Woodsmith.
Through the year, we've made further progress on the market development side as we've entered into new sales agreements in Europe and a new MOU in China, and we continue to receive very positive results from our ongoing crop trials. These agreements serve to shore up the demand for our product in important markets for Polyhalite and give us more control over our own commercial strategy. Now, in conclusion, our focus on operational excellence and providing stability and less volatility as efficiencies are now being embedded in the operation is working. Notwithstanding the great progress that we have made in 2024, we believe that there is still room for improvement and further operational upside to come. Our portfolio simplification is moving at pace with no change in our commitment to separate De Beers as soon as is achievable.
I've spoken at length today on our long-life, world-class copper, iron ore, and crop nutrients endowments, combined with the growth optionality and all-important institutional capabilities that we have, making us very well placed to unlock the most value from these assets. We have had a very busy year, and I'm very proud of the great work that all of our teams have done and delivered during the course of that year. We are well on track to transform this company, setting us up for our next phase of growth and value delivery, and that is incredibly exciting to all of us, and now John and I are happy to take your questions, and given that I didn't have my glasses last year and I couldn't see everybody and kept calling everybody the wrong names, Tyler's insisted on moderating the session, but I can see you, Grant. All right.
We'll start with Kevin. Sorry, Jason right there. Nice beard. Jason Fairclough, Bank of America. Just in terms of your life's work there, so the deal in Chile, how long have you been working on it for? And I guess with that, do you actually have the legal structure in place? I think there's constitutional restrictions here on Codelco giving up resources.
Yeah, thanks, Jason. My life's work. Yeah, so actually, the first meeting I had on this was with Thomas Keller when he was the Chief Executive of Codelco, and so that would have been in and around 2012. So it's been a long time coming. But however, this is the end of what is sort of a three-stage process. So the first part of this arrangement was making sure that we could work more effectively together given the interfaces and the interference between the two mines.
The second phase was to physically create proper legal easements that allowed us to operate more freely between the two, and that operating and working arrangement has been incredibly good between the management of Los Bronces and Andina. And then the final bit was to, given the constraints of the constitution in Chile, effectively come up with a mine plan that mines without impacting negatively at all on any of the interpretation of the constitution, the combined resource. So you can imagine that this has been well-trodden by Codelco and by a number of lawyers, constitutional lawyers, etc., etc. The arrangement that we've got in place under the MOU is absolutely constitutional and therefore quite innovative in the context of how it's been set up. So just as a follow-up, are there further opportunities for cooperation between Anglo and Codelco? Well, there may very well be going forwards.
I mean, they're a good partner. I mean, Codelco has been actually a partner of Anglo American for a long time because they're a shareholder in Anglo Sur. And they have excellent operations people, and to the extent that there is more that we could do or would do, we would look to do it. But there's nothing on the table right now.
Thank you. Right. Ambassador Matt.
Hi, Matt Greene from Goldman Sachs. Just on Los Bronces and Andina, first of all, congratulations. I think the industry needs to see more transactions like this. Can you just high level, I mean, you pointed out there's a big old wedge in between the two mines. What are the moving parts here to try to utilize material between the two concentrators? And then just what is your thinking now on Los Bronces underground?
Is this project now getting pushed back because of this MOU?
Yeah, so I mean, if you had to stack up the value of the copper in the wedge and the efficiencies associated with the mine plan, Los Bronces underground naturally gets moved back in that process. I mean, to the extent that copper prices change very materially in the next few years, we have the ability under this arrangement to bring Los Bronces underground into it, and we can use the facilities that we've got for the Los Bronces underground ore as part of this arrangement. So what happens now is that, one, we've got to get to the final definitive agreements, but then we've got to, given that both of us retain the underlying mineral rights to each of our properties, we have to submit an EIA on both sides for the new mine plan.
That then has to get approved, and then we can start actually mining the combined mine plan over the two pits or the joint mine plan, as we're calling it. We expect that the process of all of that happening will mean that real copper starts to come in and around about 2030.
Can I just follow up on the timing of this? I mean, as you say, it's in the 2030s. The last few years, you've been quite constrained with that wedge. Perhaps you could just give us a bit of background as to how those transactions come today as opposed to a couple of years ago or in the future.
Oh, as I say, I mean, it's a transaction that we've been working on for a very long time.
And for a transaction like this to work, it takes the meeting of minds of all of the parties that are involved in it. And so in a large part, that was it. I mean, the industrial logic and the synergies here, for me, were always obvious. And it just took that amount of time to actually get it set up, properly recognized by both parties, and then design an implementable and executable structure to be able to deliver it.
Great. I see Liam's already got the mic, so Liam.
I have the mic. Liam Fitzpatrick from Deutsche Bank. First one on working capital and cost cutting. It's really strong performance in 2024. Do you worry just as the pressure perhaps comes off the organization and you deliver more of the simplification that some of this could reverse?
How much of that $800 million that you're flagging for 2025 is in the remaining coal?
I'm not worried it's going to come out because this is the way we're driving the company, right? Good mining companies are lean. You invest the capital where you need to invest the capital, and this is becoming an embedded philosophy and discipline throughout the whole of the company. We're not going to let that unravel. John, you want to deal with some of the other questions.
Yeah, I mean, likewise, no concern on it unraveling. The focus is there in the organization. The working capital, when you stand back, obviously, we had some significant outflows over the last couple of years, big focus this year on reducing down. Some of what we saw this year, of course, was price and volume.
But when I stand back and look at the level today, is that appropriate? When I look at receivables days, when I look at inventory turns, it feels broadly in the right space. So I wouldn't expect any significant movements in working capital over the course of 2025. Of course, there's going to be many moving parts with businesses coming in and coming out, so the numbers themselves will be a little bit messy. But underlying working capital, I think, is in roughly the right place. The only caveat that I would put on it, of course, in our marketing business, then we've got variation margins that can move around in a timing perspective depending on commodity prices right at the year-end. But fundamentally, I think we've got working capital to a pretty good level, and it should be broadly consistent through the short term from here.
On the cost savings, of course, 300 of the 800 has already been achieved on a run rate basis. So as you look at where is that going to come, then the 300 is probably going to be broadly spread over the same mix that I showed on the slide across the different businesses. The incremental 500 that's still to come is largely going to be in the remaining coal. As I said in my comments, a lot of that is in the corporate center. Now, the only slight caveat to put on that is that, as you know, because you can see the plats results and our commentary on that, there are some small recharges from the corporate center to those businesses that are leaving. But in the case of plats, you can see from what we published earlier this week, that's around $100 million.
So the vast majority of that 500 will stick with remaining coal.
My second quick one, hopefully, maybe not quick, on De Beers. You've made some comments this morning, I think, on the process. Can you share anything in terms of where you're leaning between trade sale or demerger? And do you think this will be a clean single transaction, or could it be similar to what we see with Amplats, like a series of sales?
Yeah, so look, I mean, we're running the dual track really hard at this particular point in time. So there's no real difference between the prep work that we need to do for the dual track or a trade sale. There will come a point where we may have to prioritize one over the other. I don't see us needing to do that much before the middle of the year.
But we would never, in terms of prioritizing one versus the other, you wouldn't actually stop one versus the other, right? So the dual track always remains the base case, and at the last moment, a trade sale could prevail over a listing or a demerger. My preference actually would be to sell to the right trade buyer in some way, shape, or form, but I can't say for sure that that's going to happen, hence the dual track. Is there a possibility that we could end up with a similar sort of structure on exit? I'd prefer not to, is my honest answer on that, but I think it will very much depend on who the buyer is and when that sale happens.
Let's go to Ian.
Thanks. Ian Rossouw from Barclays.
Duncan, it would be good to get an update just on the Quellaveco sort of mine plan and changes. In December 2023, when you downgraded production guidance, you said that production over the five years will go up, and it doesn't seem like that's really coming through in 2027. Can you give a bit of an update on that? And then secondly, just on the QFBS statement and cost cutting, you give a breakdown, but you don't say how much of that gets recharged to the various divisions. John, I wonder if you can give a bit of details on that sort of split. Sure.
I'll leave John to the Q what? QFBS. Yes. That one.
On Quellaveco, what we said is that actually with the resequencing of the mine plan, all of that copper was there, and it will come out over the next five years or so, some of it in lumps because that's just how the mine plan works. But on average, what you should be thinking about is Quellaveco as a 300,000-ton per annum producer. Some years will be slightly higher, 325. Some years will be sort of at or around about the 300. And to answer your question specifically, it's clearly in 2028 or 2029 rather than in 2027, 2026.
Because at some stage, you talked about closer to 400 in some years before the downgrade. So should we see one or two years at that high, or are you smoothing the path a little bit?
I don't think we'll see years at 400.
Okay. Thanks.
Let's go to Don.
We'll take the QFBS question. I think it sort of was addressed in Liam's response, so the $800 million savings, of course, some of that is recharged. Clearly, Amplats, you can see what that number is, which was roughly $100 million. Being one of the biggest businesses, then you can see it's not going to be materially more than that across the group, so again, the takeaway would be, Ian, that the vast majority of those savings would stick with the group.
Good morning. Dominic O'Kane, JP Morgan. Two questions. First one going back to working capital. So it's a really strong working capital release, particularly in the second half. Could you maybe just give us some insight and granularity as to what that looks like in De Beers?
So specifically, what does the stockpile look like? And given some of the market challenges that you've talked to in De Beers, is there a risk that the inventory that you have in De Beers is carried at the correct or the appropriate value? So that'd be my first question.
Yeah. John can speak to the valuation of the inventory, but the inventory in De Beers is still sitting at around about that $2 billion mark. What was really pleasing during the course of last year, given the focus on the management of working capital and the way De Beers managed the business in the context of the market that they were operating in, that that working capital never grew. So last year would have been the perfect year to see working capital increase quite materially, but it never did. In fact, it actually came down slightly.
So that is the way that De Beers is really focused on managing themselves through the bottom of the cycle, and we're doing everything that we can to help them get through that as effectively as they can. It would not be ideal if working capital built. We have no intention of allowing that to happen, neither does De Beers, and hence the actions that they've taken across the board, so not only in Botswana, but across the board in terms of actually reducing production to prevent that happening. John, do you want to talk to the valuation?
On the valuation, I mean, as you will know, we're under very strict rules as to how we value inventory, and the essence being that you have to value inventory at the lower of the cost, what you paid for it, or the net realizable value, what you expect to be able to receive for that when you sell it. Obviously, the cost of our own production is going to be typically quite a bit below what we expect to be able to sell the inventory for, so no concern there. Clearly, on the inventory that we purchase through Debswana, then there's a margin that's applied to that. So we're carrying that. The cost to De Beers is a little bit higher than the true cost of mining.
But what I can say is that on the review at the end of 2024, we did all those tests, and there was no significant movement in the provision for inventory. So the fact we've held inventory flat at the end of 2024, none of that is to do with provisioning. That's a real physical inventory number. And absent any significant falling of prices, then I wouldn't be expecting any material impairment of inventory from a valuation perspective.
And just second question, just turning attention to Minas-Rio and Serpentina. So the announcement this morning on Los Bronces and Andina is really helpful, but of a very similar timeframe. You've talked about similar investigations with Vale. So I just wonder if there's any update you can give on a comparable transaction. And obviously, you gave us a synergy number for Los Bronces this morning.
Is there any estimate that you can share with how you're thinking about that project evolving?
Well, not much to add to what I said at the half of last year. The only thing that has changed, of course, between the half and the end of the year is we actually completed that transaction. The benefits of the combination of the Serpentina resource and the Minas-Rio resource are twofold. In the first instance, it gives us the possibility, depending on market conditions, of moving into softer, higher-grade ores than we would ordinarily get into on the same timeline in the Minas-Rio pit. So there's already, just on the assumption that production stays flat, a real cost benefit with minimal capital investment. The alternative is you increase the throughput, processing, and capacity in the plant to keep the production flat if we're in the same pit.
So that's a real synergy benefit. And then, of course, depending on where DRI markets go, and we are absolutely seeing some proper demand for the high-quality DRI type of products going forward. And to the extent that that becomes a really high premium sector of the market, the possibilities then, given the size and scale of that Serpentina resource, are such that physically, we could potentially double the production coming out of Minas-Rio today. So that's the size of it over a materially long period of time. That, of course, would come with whatever the project costs are, and we haven't got a feasibility study on that at all at this particular point in time. We know that that's what it would sustain. We've got the concept studies that we did prior to getting the deal done, but we haven't taken any decision on that just yet.
But right now, the primary focus is to switch the production from, sort of, five years' time to the Serpentina pit, largely to the Serpentina pit from the current Minas-Rio pit.
Very good. Let's go to Chris. Good morning.
Hi, Chris.
Chris LaFemina from Jefferies. So just first, quickly on De Beers, the new carrying value, I think it's $4.1 billion. Should we think about that as being the price that you would accept for some form of separation? In other words, if the market conditions don't dictate a price that high, do you wait, or would you consider selling at a lower price if markets weaken more than you think?
Chris, they're completely unrelated. So the carrying value of any of the assets in the book are completely unrelated to the value that a buyer would attribute to them at the time that they're buying.
So there's no correlation between the write-down and our perception of what a buyer is going to buy. I mean, I think we value that business very highly. Timing on this thing is absolutely just a function of us getting some more green shoots in the market, I think, and then being able to attract the right buyer at what we think is a fair value for the company.
Thanks. And maybe for John, so basically, the pro forma EBITDA that you showed for the copper and iron ore assets was $6.6 billion. If we assume you get three-quarters of the $800 million incremental cost savings, you get to $7.2 billion. You have this copper growth pipeline, which presumably in a flat commodity price environment, you get EBITDA higher than where it was last year just from iron ore and copper.
So kind of the big picture way to think about Anglo American here is that you get EBITDA at least back to where it was last year, but instead of having $11 billion of net debt, you have no net debt with a higher free cash flow, generative business, and bigger capital returns. Is that kind of the big picture vision for Anglo American?
I'll leave more of that to you guys. You're better at it than me. But yeah, I mean, directionally, as I said, higher EBITDA margins. The pro forma does represent already, Chris, some of the QFBS benefit in there. So I think you're maybe double counting to add that in. But we're believers in copper. And so copper prices, if you run the math through, then I think you're directionally right that we're going to be a strong EBITDA business.
Is net debt going to go to zero? Well, again, you need to form your own views on that. But what I'm very focused on is making sure that we get the balance sheet in a strong place. And you can see from what I've described there with what we've done this year, the proceeds that are still to come, we're heading in a very positive direction. But I'll leave the specific numbers to you.
We'll continue going geographically to Tony, and then we'll get to the Aussie front row in a second.
Thank you. Tony Robson, Global Mining Research. A small question. Los Bronces. Apologies, if I've missed it in the fine print. How do you share the copper tons, high-grade Andina ore goes into your mill? There's always an economic value with the ore, but there's an economic value providing a mill as well. How's the 120,000-ton split?
Yeah. You effectively true it up beforehand, and everything is 50/50 going forward between the two contracting parties, so it's very similar in nature to some of those agreements that we used to have in Platinum, where from the time that you're operating, whatever comes out is 50/50. Thank you.
Bob, please.
Bob Brackett at Bernstein. If we think about the creative things you've done with Serpentina and with Andina, what's the progress on the third rabbit in that hat? No material progress to report, and then a follow-up around Woodsmith. If we think about your 10 meters into the 250-meter sandstone, you mentioned water management issues, which suggests permeability. You mentioned hardness. At the sort of CapEx per meter you're running at, are you happy with that number? Do you have expectations that it will normalize, and how do we think about the last 240 meters?
That is absolutely the right question to be asking, and that's why we're so focused on getting this data and information. The average run rate in the base case here is a meter a day. So that would be the cycle. If we have real water problems, and I mean, they're all going to be manageable, it's just a question of cost and time to be able to do it. That could go to half a meter a day or 0.2 of a meter a day. And that would have a material impact on the scale and size of the CapEx and the time to get the project to shaft bottom. In the first 10 meters, I mean, 10 meters is 10 meters, right? I mean, it's not much to tell, but very encouraging results so far.
Look, I mean, we've changed the picks, the design of the picks in the cutter head. Actually, they have lab-grown diamonds in them. Just cannot think of a better use for lab-grown diamonds for cutting rocks. And the water ingress that we've got, I mean, so we've got a big grout curtaining regime that's happening in that area specifically, all seems to be really, really manageable. I think without declaring victory at all, I think Tom made 0.7 of a meter in an eight-hour shift in the last couple of days, and that was still with tweaking some of the system process parameters and so on. So currently, I'm cautiously optimistic that we will do or better the baseline penetration rates through that sandstone.
Myles.
Myles Allsop, UBS. A couple of questions. Maybe one kind of philosophically. Obviously, you're going through this great restructuring.
Do you see yourself now as a copper company that should trade at seven, eight, nine times EBITDA or a diversified miner that trades at 4, 5, 6x EBITDA? In terms of the way that you're managing this business and taking it forward, how do you see yourself in the market?
We're clearly still a diversified miner insofar as we've got three commodities. In the first instance, what I really care about is that we don't attract a massive discount to the underlying components of the portfolio. But given that the very large proportion of the portfolio is copper, given that the most significant near-term organic expansion options are copper, I'm expecting that it will trade without discount closer to a copper multiple than it will to a conventional diversified multiple.
Maybe link to that as well. You set out the three conditions for Woodsmith.
Is there a fourth condition that you kind of didn't mention around investor kind of approval as well? Would you consult all investors before hitting the button if you've got everything else, all your other ducks in line in 2027 or?
If it's the right project and it's the right returns on the project and we are in a position to be able to effectively execute it, then I believe the investors will support the execution of it. If any of those conditions are not true and are not met, then I don't expect the investors would support it. So we care a lot about what the investors think. We've taken a lot of feedback and input from the investors during the course of our strategy refresh, and we continue to listen very carefully to them.
Alain Gabriel at Morgan Stanley. A couple of questions probably for John.
On the Andina JV proposal, you currently fully consolidate Anglo American Sur. Will you move towards equity consolidation once you set up the JV, i.e., your share of production and EBITDA, or will you have a different structure there?
Well, there's no change to the legal ownership structure of the businesses. So we still have a majority holding in Anglo American Sur, and that will continue to be the case. So I wouldn't anticipate any change to the accounting. Okay.
Thank you. And the second question is on the capital allocation framework. Now that you move towards the new Anglo American, are you having any conversations of revisiting your dividend policy or capital allocation framework at all?
Well, clearly, that's a board decision. We're very much focused just now on delivering on our commitments on the transformation. And the capital allocation policy seems fit for purpose at this point in time.
But of course, that's a board matter that will be subject to ongoing discussion. And to the extent that we're making any changes, we'd communicate that. But no plans right at this point in time.
Thank you.
Richard.
Thanks. Morning, Richard Hatch from Berenberg. Two questions. First one, just to follow up on Quellaveco. Is there a problem with recoveries at that mine? We're kind of running it at about 80%. I would have thought you may have hoped to get a bit more when you first reported it. Or is 80% the right number to be running this mine at long term?
No problem with recoveries. I mean, I think recoveries are very consistent with the geometric model that we see coming through.
It does fluctuate depending on which part of the ore body we're in and relative to the amount of clay that's in the ore body at that particular point in time. So absolutely no problem with recoveries there.
Okay. Understood. Thanks. And then secondly, just on slide 29, just looking at the CapEx profile of the simplified portfolio, $3 billion into the long term. I'm sort of curious that there's no life ex in there. And perhaps that may just be because you've got long-life assets that you don't need to extend. But also, is there some risk that that $3 billion becomes for when you greenlight Woodsmith again? Just interested to see how that profile goes.
Yeah. So there's no capital in that profile beyond next year for Woodsmith. So Woodsmith has to justify its own capital if it goes forward.
There is still $100 million of operating costs that goes into maintaining Woodsmith and the options there. But as I said earlier this morning, there's no chance that that's going to happen before 2027. Okay.
And the life ex?
The life ex on?
Just no life ex in the guidance. Is that just because the assets are long-life, so you don't need to extend?
The stay-in-business is life ex, right? So there is stay-in-business in there. Yeah.
There's $2 billion per annum of stay-in-business. I mean, the billion of growth is where the incremental capital is focused. So you've got in there the Quellaveco going to 140,000 tons. You've got the 185 at Collahuasi.
As we said before, we started to put in a little bit of some of the unapproved projects in 2026 and 2027, $200 million in 2026, I think $600 million in 2027 across Los Bronces Underground, fourth line at Quellaveco. We're trying to give that. I mean, I think the life ex point, of course, nothing major in there. I think well covered within stay-in-business. I think it goes to the quality of the copper assets that we have. They really are good long-life assets as they're set up at this point in time.
Yeah.
Great. Let's go to Ben.
Thanks. Ben Davis from RBC. Congrats on the Andina deal. It's great to see. With Woodsmith, with the progress you're making through the sandstone, has the timing of the study work that you were doing, has that moved at all into the second half?
And will that slow down the syndication process for partners?
Yes, absolutely. So look, I mean, when we made the decision to slow the project down, it slowed the studies down, right? Because what you need is all this data and this information and so on. So the impact in terms of data acquisition for the sandstones was pushed out by about three months as a result of that. To sanction the project, we need a feasibility study. The feasibility study relies not only on the information that we're gathering here for the engineering of the project, but it also requires us to understand the timing of the execution so we can sort of filter through the escalations that we expect on CapEx and so on. So it's very market-dependent at that particular point in time.
So as far as selling a stake in the project, it will be much closer to the time where we have a feasibility study and where we believe that we would be ready to sanction the project, given the fact that it actually did hurdle. We're in a good position to execute it, and we would be able to then get a partner to sign up for it. Now, we started the work of syndication quite a long time ago, actually. And up until May of last year, we had appointed banks. We were actively engaged with potential partners. And that remains true today, right? So the partners that we were soliciting that came to us are still very interested in the project and still looking forward to the point in time where it might be sanctioned.
So we haven't really lost anything in terms of potential partner acquisition in this period, probably only gaining as a result of it because we're getting better information, certainly on the market study side now.
And just to follow up on that, are you able to give any sort of flavor of what those partners might look like in terms of type of investor? And then secondly, is there any scenario given that you're going to be overflowing with cash, net cash position that you would ever do it alone?
We'll never do it alone. I think that's not the right project model for us, irrespective of whether you've got loads of cash or not. I think we partnered on Quellaveco. It makes sense that we find the right partner for something the size and shape of Woodsmith.
In terms of the flavor of the partners, I mean, they are broad-based in this context, right, so there are the potential usual upstream partners, so those that really like the returns associated with mining. There is a small potential of midstream partners. I mean, we have a very unusual setup with Woodsmith here, and it's one of the most unique attributes of this project is that it is in control of 100% of its logistics from mine to port. For a bulk product, that is very unusual, and so there are some logistics partners that are potentially interested in it, and then finally, of course, there are downstream partners, which we are interested in, of course, because we think that they bring more than just capital to the project. They bring their own experience and their own ability to create value in the downstream.
I mean, this is not a terminal market product as far as we believe. It's a real value-in-use type of product. And the higher we can get that value-in-use, the better it will be for all of us at the end of the day. And so hopefully, in that space, there are potential partners too.
Thanks.
We have time for one more question, one or two more questions. Sorry, I see a Grant there.
So just a quick one from me. Going back to the growth CapEx and copper allocated to the currently unapproved projects, in 2026 and 2027, how much have you earmarked for Los Bronces Underground and Sakatti?
Yeah, actually, Los Bronces Underground is in there. And we may have to adjust that post this deal with Codelco. John, I don't recall exactly the quantum.
There's a small amount for Sakatti in there, given that it's sort of in the next three years still very much in permitting phase. We don't expect it to come out of that rapidly in the next two to three years. Therefore, the major implementation CapEx will be sort of post-2027 onwards. It's not in those numbers.
Yeah, I don't have the specific number. I think it's in the order of $1-200 million. So out of the total.
Yeah. All right. Thanks.
Great.
Are you good? Okay. Well, that's all from the analysts. So thank you. Thank you. Hand it back to Duncan.
Thank you, Tyler. All right. Look, thanks, everybody. Just the point I made at the beginning, it's been one hell of a year.
And we took on loads in the context of restructuring this company and setting it up for more shareholder value. We're determined to see it through. I think I hope that you can see that against what many people were suggesting might or might not be possible. We've delivered and perhaps overdelivered. And I think you can expect more of the same coming on. So thanks very much.