Earnings Call: H2 2020

Mar 16, 2021

Good morning, ladies and gentlemen. Welcome to Antrokastor's 2020 Year End Call. I'm Andrew Lindsay. As many of you know, I run the London office. And today, we'll have Mauricio Ortiz, our CFO and Rene Aguirre, our Vice President of Corporate Affairs and Sustainability, answering your questions. If you have any questions, please use the chat facility, which is that sort of in the top right, there's a talk box circle with a question mark in it. If you click on that and type your question there, then I'll ask the question for you. I'll now hand over to Marissa. Can you hear me now? Yes. Thank you. Well, thank you, Andrew. Well, good morning. It's great to be speaking with you today as we announced our strong set of results 2020. As you may know, our CEO Ivan is recovering from a short illness, so I'm covering the results for Antofagasta today. Before getting into the financial detail, I want to say a few words on the pandemic and how we responded to it. For Antrofagasta, the safety is always the most important priority, the safety of our people and our communities. So throughout the pandemic, we have taken precautions to ensure our people are still and safe on-site and also at their teleworking locations. In addition, we are proud to announce another record safety performance this year. On the financials, we are very proud about our 12% EBITDA increase during the year, Reaching $2,700,000,000 as a total EBITDA, yielding 52 percent EBITDA margin. Higher copper price and gold prices lead to a higher full year revenue than in 2019, And we complete 2020 with a $5,100,000,000 revenue. That means 3% higher than the year before. We have also taken actions to continue to improve our cost, our CCP, our cost and competitiveness program, Success and generate benefit for almost €200,000,000 nearly doubling the original target, which was 100,000,000 And in line with our capital allocation framework, the Board has announced a total dividend of $0.547 per share, which is equivalent to a payout ratio of 100% of underlying net earnings. Our balance sheet remains strong. We ended the year with a net debt of $82,000,000 and a net debt EBITDA ratio of almost 0, For sure, amongst the lowest in the industry. Taking all this together and looking ahead, we are optimistic And following the pause that we have in our growth project on 2020, we are now reassumed And CapEx for the 2020 was €1,300,000,000 and we are looking forward to 2021 In order to have $1,600,000,000 as a total CapEx expenditure. In terms of what we are seeing in the copper market, the fundamentals are there. There is a short 30 month increase supported by government stimulus in the U. S, Europe and China. The vaccinexion rollout is progressing well. In Chile, we have remarkable results in that aspect. And that also, as I know, in the entire world is reducing the fears of economical downturns within the next couple of years. And in the supply side, we see a response relatively constrained. So Longer term demand, of course, is driven by the transition to a low carbon economy, and we have seen all these factors Front end loading in the last couple of months as the world is accelerating its movement to cleaner technologies in transportation and energy sectors. So world at the end needs copper to achieve our climate goals. And last but certainly not least, we continue to make excellent progress to decarbonizing our operations by increasing our use of renewable energy and improving the energy efficiencies in our processes. Also, Already 43% of our water that we consume are currently from the sea. And we are progressing very well in the construction of our desalination plant at Los Pelambres, which is part of Los Pelambres expansion project. And the total scope will be done by 2025. So our recycled water by then will be Up to 95% of our total water consumption. To wrap up, we are in a position of strength with high quality asset And very strong growth pipeline and also a discipline about operational cost and financial aspects. I'm proud of Antofagasta and my colleagues for their resilience and continued strong performance during the year. And now I'm happy to take your questions. So thank you. Andrew? Andrew? Sorry. Okay. Thank you for that introduction, Mauricio. I think the we got a variety of questions here. I'll try and keep them in some logical order, but keep sending them in as you think of them. The first question is just a general question about COVID-nineteen. It's just asking what actions We managed to take in 2019 why we think they were successful because in the end, our production seems to have not been obviously affected by that and what our expectations are for this year and again what precautions have we taken? Okay. Well, we have an early response to COVID on back on 2020. We start with all our measures early in February. And I would like to highlight mainly three aspects. The first one was the self assessment, healthy safe assessment before All the people and all our personnel entered to our companies. So that allow us to Rise the level of awareness of all the people involved in our operation, not only direct employees, but also contractors. The second one was the dedicated airplanes and buses In order to isolate our people from the rest of the population as they need to travel from the urban cities like Antofagasta, Santiago, to the mine site. And the third one, of course, we increase all the sanitary measures at our mine sites. For example, Promoting the social distancing that had an that at the beginning of the pandemic had an impact on project development. And now We are we replanned our project development in order to develop the projects with a reduced Number of people on-site, so that help us to promote social distancing and also another sanitary measures such as increase The personal protective equipment. So going forward, in 2021, we are going to maintain this discipline around these three Main areas, and we are also expecting to have better results on the back of the 25% of the population in Chile has been vaccinated so far and the program keeps running very well And the government is targeting to increase that figure going into 2021. Okay, thank you. Sorry, there's a slight lag when we switch between screens here. The next question is another sort of more general question, but specifically about actually relating to the constitutional change and debate which is going on. If you could just describe that in a bit more detail and also set out what we think the possible implications are for us as a company. Well, As all of us know, there is a very organized process running currently in Chile. There is a last October, we had an election in order to a referendum in order to decide if We are going to set an assembly to propose a new constitution during 2021. And the final choice of Chilean people was go for that assembly. The elections to elect the assembly representative will be This April, so 4 weeks' time. Following that election, the assembly representatives, They have 9 month plus 3 month extension. So almost sorry, up To 1 year to write the constitution, to write a proposal to propose a new constitution. And on 2022, we are going to have a new referendum And few people will decide if we go for the proposal that the assembly put in place or we maintain the existing one. So that is a very clear path that we have going forward in term of writing the new constitution. In terms of implication for the mining industry, we can see some discussions about water rights And I think at Antofagasta, we are very well placed in terms of to tackle that discussion and any implication as I described In the opening remarks and also, as you know, we are building our independence from Continental sources I'm basically feeding all our or matching all our water supply requirements from seawater In the northern area, Centinela and Antucoia, rosy water and in Los Pelambres, it's going to be a desalinated seawater. Okay. Now we have a question from Jack O'Brien at Goldman's. Despite higher CapEx In 2021 and expansion programs thereafter, Antwerp Gas' will be in a net cash position from 2021 onwards. Can we expect any surplus distributions over and above your very high payout ratio, e. G. Through a special dividend? Yes. Well, as you know, something that characterize Antofagasta is its discipline, Operational, cost and financial, as I said. So in terms of taking all our financial decisions, the capital allocation framework, It is the core of that decision. So basically, just let me take you through the capital allocation framework. Our main priority is to always maintain the ability of our assets To keep delivering value through the cycle, so sustaining the mine development capital first. Then we pay A very straightforward dividend policy, which is 35% of the payout ratio. And finally, we assess different Development options, we have a very strong development option portfolio in Centinela and Los Pelambres. And any development option must of course fit our economic parameters and our economic returns parameter. And if there is no project, so for example, this year, Los Pelambres, Centinela, Anzaliva project, we are fully funded. Of course, we are going to return excess of cash to our shareholders. So That is basically what drives our decisions in terms of capital allocation. And going forward, what I will say That we are going to follow this capital allocation framework or our capital allocation framework and decision factors are very clear. So we assess the scenario in a with a very clear framework, but of course the scenario will be changing Different every year, but the decision factors are the same and the assessment may change according to the macro environment. Okay. Thank you. So the next question is about the labor negotiations, which going on at Los Palamares. And please, can you give a bit more information about where we are at the moment and what the expected outcome is? Okay, Okay. Well, in terms of labor negotiation, Antofagasta has a very collaborative approach with the unions. So we always looking for The collaboration with the unions in the common benefit and also looking and taking care of our long term Competitiveness of the business. So these are the key fundamental principles once we take once we sit With the units to talk about the future of our company. So in In terms of the specific labor negotiation at Los Pelambres, there's 2 unions, the concentrator and the mine union. We are now in the mandatory negotiation period, which is 5 days extension Following the normal period, this period is going to end Today for 1 union and tomorrow for the other one. Following that, we expect to sit For another 5 days of common agreement extension, that is something that will allow us to close any potential difference between the management and the unions. So I'm positive about that. And of course, we cannot guarantee the success of this. But as I said, Collaboration, it is fundamental and also looking for the long term competitiveness of our businesses, it is the drives that are the main drivers of our conversation. And as I said, we will have we are expecting to have another 5 years extension period Following today and tomorrow for the 2 unions. Okay. And as a follow-up question to that, are we able in any way to quantify what the financial impact might be of the outcome of these negotiations? Clearly, it's a bit premature as we don't know the details yet, but if you can give any help with that. Yes. Well, as I said, the borders of any decision will be, of course, the common benefit For both parties, workers union and the company and always maintaining and preserving And of course, targeting the long term competitiveness of the business. Workers and management knows that this is a cyclical business. So we target rather than a specific impact in 1 year, we target a competitive Advantage during and through the cycle. Okay. And then okay, more specifically on Los Panmurez. We assume that the exchange rate in our guidance is Ps. 780 dollar for this year. Can you talk through what is driving our cash cost expectations higher at Los Pelambres? So before bicro, the credits is going from $1.27 to 1.45 Okay. Okay. Yes. Well, Los Pelambres, as you know, and we were discussing, we have the Los Pelambres expansion project. So basically, This expansion main target are 2, 1 to expand the milling capacity and that Allow us to tackle the declining grade at Los Pelambres. And the other one, of course, is reach the water independency from Continental sources. So in terms of rate decline, we are taking care and we are tackling the long term challenge building the Los Pelambres Thanks. Specific on 2021, we have a change in comparison with 2020 In the copper grade, on 2020, the copper grade was around 0.7% cover and on 2021 the grade will be in the space of 0.64. So that basically drives the cost increase as we need to increase the activity To preserve and maintain the final production. So that is the main driver, Los Pelambres cost increase. But as I said, we are tackling the long term and the main challenge, which is the great decline as we are moving forward in the life of mine With the Los Pelambres expansion that will be fully up and running by 2022 on the second half. Okay. We've got a few questions now on Centinela on current operations and on the 2nd concentrator project. First one is, can you talk around the grade profile and how you see it developing over the next well, 2022 to 2025. Yes. Well, great declines is a fact in the copper mining industry and there is something Of course, Antofagasta is looking forward to tackle that and to Make projects to minimize that variability. So for example, in Centinela, what we are doing, we are opening the Esperanza Sur New open pit that will allow us to maintain a steady state, the grades in a level that allow us to maintain also of course The production from the concentrator. So back on 2019, We have the highest grade on Esperanza Sur, the concentrate or the sulfate mine at Centinela. In 2020, we have a little reduction that explain basically our lower production coming from Centinela. And now back in 2020, we have an increase and we are expecting that in the long run, the grade at Centinela We'll be much more similar to what we have on an average between 2020 2021. So wrapping up, in Septinela, we are taking positive step in order to maintain steady state grades Going forward in a level, as I said, between 2020 2021. And of course, These are the main project that we have in Centinela is the one that involves the building And development of a second concentrator and that will increase copper production to 180,000 tons of copper equivalent. We are doing the engineering of that project on 2021 and the pre feasibility study gave us a figure of $2,700,000,000 And we are derisking the engineering and moving forward with the tail engineering during 2021, and we are going to present to our board during the first half of twenty twenty two for final investment decision. So we have a set of portfolios in a set of project in our portfolio for Centinela, and we are progressing well in term of maintain The production as much as steady state is possible based on the resource base that we have in Centinela. Okay, another question on current operations. This one's from Iain Russo at Barclays. He's observing that we had we did an expansion at Centinela to increase the throughput capacity to 105,000 tonnes per day, but we haven't achieved that very often in recent years. And he's asking when we expect to achieve that on a more regular basis going forward, at least 100,000 tons going forward. Okay. It's a very good question. And I think our Engineers invest time on tackle this. Well, as you know, Centinela, rather than a single pit, is a district. So the variability of the ore bodies, It is something that we need to take care once we operate at Centinela. So what we have done over the last couple of years, We increased the level of flexibility at the concentrator in order to manage different kind of ores. I meant from the hardness Point of view. So what we have now is a flexible layout that will allow us to manage the bottleneck around the concentrator. And that, for example, provides very good result, finish in 2020. So in last quarter, we reached A record throughput above the same capacity. The same capacity or the record throughput that we achieved was 108. And I think the flexibility that we built around the concentrator layout Will allow us to maintain that level of throughput independent of the hardness of the ore that we are going to fit. So answering the question, I expect that with the flexibility that we have built, we are going to manage different kind of ores And going forward, we are going to maintain a throughput around 100,000 tons per day. Okay. A question from Dan Major at UBS. And you partially answered this, but I think a bit more detail maybe. On Centinela, can we get an update on the timing and key items in the critical path for the approval of the Centinela expansion. The CapEx estimate was last estimated at €2,700,000,000 And we're aware of increases in increased cost pressure. Can you give any indication of the potential upside to CapEx? Are you in active discussions on the sale of the water assets at Santo Nemo? Yes. As I mentioned previously, we are going forward we are moving forward with the engineering of the Centinela 2nd concentrator. And just let me tackle or just let me expand a bit more on Centinela's engineering. So what we have done from the pre feasibility study to now, basically we are selecting the most efficient technologies, of course, Proven technologies in order to optimize our OpEx. So for example, we are now Fine tuning the selection of the different equipment and also having an important saying of the decision, The energy efficiency, as of course we want to reduce and minimize our scope 1 emission. As I said, the pre feasibility CapEx is 2.7. We estimate Our estimate so far is that we are going to be in that range. But of course, following a significant amount of engineering, we will have a much more Ravust, Project Engineering. So and in terms of the sales of the water offset, as you know, Centinela Operates under Rossi Water, and we owns 1,000 and 300,000 sorry, 1300 Liters per second pumping system, we need to increase that capacity if we develop the 2nd concentrator. So what we are Targeting is to divest the existing water asset plus the right to build the additional expansion To a 3rd party, in order to have a dedicated developer for the projects and that will allow us to think, to concentrate all our efforts And keep Centinela 2nd concentrator on time, on budget and also get experience From a third party, as an operator of our water system operator and also from the financial point of view, Optimize the capital intensity for the entire project. So we are looking that we launched that process early this year And we are moving forward with that and that decision will be along with the final investment decision For the 2nd concentrator. Okay. I've got a couple of questions from Ian Russo and to Tinder Goll at Exane about actually the primary leach. And it's can you give a bit of an update on what's happening with our primary leach test work, What recovery rates are being achieved? And how does that compare to our expectations required to go ahead with the Zaldivar primary sulfide leach. And the Jitendra's part of the question is, could that be applied in any way at the Centinela 2nd concent well, obviously, not the 2nd concentrator, but the development of Centinela in the future or possibly more widely than Centinela within the group's assets. Okay. Well, in terms of results, we are extremely, Extremely excited about what we are getting in terms of results. Recoveries are Above previous research, so we are extremely encouraged for the results that we have so far. What we are doing on 2020, we completed all the laboratory essays on different kind of chalcopyrite ores and in different scales. And in 2021, we are moving for a pilot industrial leach pad of nearly 40,000 tons of ore. We already built that ore. We are building all the instrument station around this leach pad, We are going to start to leach in later this year. So we are excited about the results that we'll provide. And looking forward, of course, we are targeting to capture the benefit of this positive result. Antofagasta invest significant amount of time and resources on this research. And we have encouraging result with the secondary leaching Our secondary chloride leaching and now moving forward, we expect the same positive results with the primary sulfide leach recovery. In term of where we can apply this, of course, Saldivar is part of the potential users of this technology, once we prove it and we confirm the laboratory results, We need to we have a massive primary ore body on Saltiva. And also the resources at Centinela. But our priority in terms of Centinela going forward, and as I answered in the previous question, It's to develop and moving forward with the concentrator. So we see the potential of this technology Following for the following waves of development in our portfolio. Okay. Now a different topic on emissions. This is from Daniel I recognize that Antoine has a 2022 emissions reduction target, which we've actually just said we've achieved. How is that company how is the company thinking about longer term emissions reductions? And will Antwerp Gasders follow its peers and commit to a significant further reductions over the next decade or 2 to a net 0? Okay. Yes. Well, let me share some general ideas, and then I'm going to pass over to Rene to add some concepts. So first of all, we reached our target 2 years in advance of what we planned originally. On 2018, we plan to reach a target of 300 1,000 tons of copper saving or copper sorry, emission reduction by 2022, but we reach by 2020. So that is, of course, Something that is very important as we reach that. Going forward, the challenges are in scope 1, How we reduce the emissions, because having all the scope to on renewable energy, the challenges will be basically in How we can manage and reduce and minimize our emissions at the mine site. And there, we are working in order to promote new technologies for transport And also our personnel at the mindset. And also on Scope 3, which is definitely something that we need to assess Carefully before we commit a target. So having said that, Rene, happy to add something? Sure. Thank you, Mauricio. I think you are spot on. As you said, we, in 2017, agreed on a target for 300,000 tons of reduction. By 20 '22, we challenged ourselves, and we are very happy to tell that we have achieved the target and exceeded that target This year in 2020, so we ended up with a number of roughly 580,000 tons of reductions in our emission, which is a very good figure that Shows the commitment that Antoine Gasa has when it comes to climate change. So what are we going to do now is that we're going to set a new target. You should be listening very soon from us a new challenging target for emission for both emission reductions And carbon neutrality. So those news are going to be shared very soon with the market. So we are working with the teams on the digits now. And of course, we know that the new challenge will require more effort on both the scope 1 and scope 3 since, of course, Scope 2, it's already addressed by the new countries that we hired on renewals from for all our mining division. So we've started this year with Saldivar starting in July this year. So just because of this year, we have reduced Further, almost 70,000 tons of reduction in emissions just because of that contract. But we need to follow the GHG guidance To provide us credit on those reductions. So we are not considering those reductions until we've got and we complete the whole Process on the certification of those reduction animations as well. So now we're going to be, as I said before, working towards Stressing ourselves in scope 1 and also scope 3. In scope 3, we've been reporting to CDP on the 15 categories. 8 of those We are doing a materiality assessment on which other areas we should consider. And also, As you know, we have started the work, and we have started reporting on TCFD from this year with a special information on that. And also, we have started this year or last year, actually 2020, the war with Sassy. So you should be reading from us on that subject as well. Okay. And then we got another environmental orientated question About one of the most important impacts on Chile of climate change is on water availability or on deepwater scarcity. And we've talked a bit, obviously, about the expansion of the desalination plant at Los Pelambres. But can we talk a bit more broadly about the impact of climate change on the group, particularly as regards water availability? Yes. Well, the same as the previous one, I'm going to share some ideas, and we have the benefit to having here Our Vice President of Sustainability to add more flavor to the answer. So in terms of climate change, what we're doing, as Renee mentioned, we are adopting the TCFD framework that will allow us to assess all the risks around climate change, not only the transition one, But also the physical one. So in terms of the physical one, we see we already shared some ideas of what we are doing in order To mitigate our impact and in terms of adapting our operations, we are now doing the assessment based on physical risk. Of course, water scarcity is the top of the list. And as I comment before, we are moving forward in order to Get full independence from Continental sources. By 2025, we expect to operate more than 95% of our cover with Seawater. And there is also risk that need to be assessed. So for example, The types at the different Chilean ports are also part of the assessment. And we are, Of course, continuously development alternative in that space and also rainfalls, not only the drought, but also the excess of water In some areas are part of the assessment. So looking forward, we are assessing all this risk in a very comprehensive way and following the TCFD recommendations and framework. Ronen? Yes. Thank you, Mauricio. Yes, you're right. When it comes to water in particular, I think the I was asking on water as well. I would say that we are, as a group, in a very good position if you consider where we are a mining company to other players in the country, in our case, 2 out of 3 of our operations that are based in the north are running already on Rossi Water. We've got Saldivar that is running on Continental Water, and we are applying for a renewal in that Permit from 2025 to 2029 and then a little bit of ramp down by 2,030, 2,031 when it comes to water in particular. We are not asking for a huge amount of water. We are in a special basin, which has a recharge capacity of roughly 6 40 liters per second. We are Just asking for 2 12 liters per second for that particular one. We are in conversation, of course, with the authorities. We have Presented the 2nd addendum to our environmental report. We presented that in March this year, at the beginning of this month. So we are expecting from the authorities to get an indication of the new observation that they might have During April, so we are following all the due process to have that permit approval by the end of this year. That will be a good target for us. And at the same time, The environmental service is running an indigenous consultation process. They are the responsible for that. So they're doing that with one community, which is called the painting community At the same time, so both process are running at this time. So we are following due process on that particular one. And when it comes to Pelambres, as you know, we are working in our desalination plan. The final aim of the desalination plan Will be to have 800 liters per second for processing coming directly to the sea. When doing that, we have conversations with the community, with Roundtables with our communities and people that work in the agricultural sector mainly In that particular promise, they were very happy about the decision that was made by Pelambres. Pelambres is going to be the very first Mining company in the central part of Chile going dissolved, which is very good news. And then, of course, we're going to be talking with The local authorities and the communities about the better use of the water rights that we already have in that particular basin. But looking to the future, We are switching into seawater as well for Pelambres and Recyclation. And that will, by 2025, will be approximately 95% of The water that we are using there. So good news in that front. And I think as Mauricio was pointing out, we are well prepared on that because we've got a very strong climate change analysis Before making these calls. Okay. Thank you, Rene. Now another question. This is we're off the environmental questions now. Question about how much of the planned production increase from the brownfield expansions is simply to offset grade decline. Well, Okay. Yes. So in terms of our brownfield expansion that we are currently developing, we have Los Pelambres, which is the largest one, and we are adding from there something in the space of 60,000 tons of copper per year. Following that, we have the Esperanza Sur open pit at Centinela. That will be in a range of 10000 to 15,000 tons Copper per year. And also the Saldivar project, which is related with increased recoveries Driven by our CuproClor technology, the one that I comment before. And also that increase In something like 10% 10% touch point the recovery of the processing plant and that will increase Roughly speaking, 10,000 to 15,000 tons of copper. So summing up altogether, We are in the space of 80,000 to 90,000 tons of copper coming from the existing project, and we will see that production up and running by 2022, especially on Los Pelambres 1 is going to be in the second half. So I'm going beyond that. We have a significant portfolio options or significant growth options at our portfolio. And Centinela, we already discussed and we already went through detail on the large The largest project that we have, which is the 2nd concentrator. And in Los Pelambres, we have also the mine life extension Project that is going to be assessed or is currently assessed and is going to be presented for investment decision on 2023. So There's plenty of projects in our 2 mining district. We are very confident of the rationale behind these brownfield projects And how this project provide returns to our shareholders. Okay. I'll just try and pull together 2 questions on CapEx here. One is observation that our sustaining CapEx Ratio, this is the dollars of sustaining CapEx per tonne of copper produced in 2021, is $3.80 versus dollars 4.97 in 20.20. And can you explain how that difference has risen? And then Based on the fixed ForEx rate that we're using for our guidance, what upside risk do we see for the group's $1,600,000,000 estimate for this year. And if I can add to that, there's a question about what is how do we see CapEx in 2022, not just growth, but total CapEx. Well, I'm going to split the answer in several parts. So let me tackle first one, the one on sustaining CapEx. We see sustaining CapEx As a sustaining CapEx plus mine development CapEx in the range of $600,000,000 to $800,000,000 per year. So and that is as I said according to our discipline that is our priority on how we preserve the ability to keep delivering value through the cycle. And, yes, actually if you realize that the actual figure of on 2021 is slightly lower, but We need to view or we need to analyze the figure rather than a specific picture. This is a movie. So we analyze this over a 5 year period rolling time. So if you put all the things together, you will realize that roughly speaking, the ratio is within the range of $4.50 per ton, plusminus $50 So we are we believe that There is nothing to worry about. So if that was to worry about, I don't know who tabled the question, but there's nothing to worry about. This is part of how the number progressed during the cycle. And as I said, keep the figure within the range that we are targeting and maintaining the discipline of sustaining CapEx. In term of Well, I'm going to tackle the 2020 good 2021 2022 forecast before we jump into the last part. In terms of 2022 forecast, Of course, we provide only the 1 year guidance. So we are not providing detailed guidance for 2022. But I will say directionally that sustaining CapEx, mine development plus sustaining CapEx will be in the range of $600,000 to $800,000,000 And the development CapEx will be the balance We'll be explained mainly to complete the INCO expansion project, the Los Pelambres expansion project and will be explained by the balance of the remaining CapEx to complete the project. So That will explain directionally our 2022 figure. And in terms of upside risk For this year, yes, you realize that the exchange rate that we announced Along with our guidance was $780,000,000 The current price is true is We have a stronger peso than that and there is variability there. But it's also to be it's also important to highlight that most of the project expenditure is already committed. So most of the contract were signed are committed from commercial agreement previously signed. So going forward, there is some risk, but we see it's a confided risk around the $1,600,000,000 guidance As we provide early in the year. Okay. And we have really just building you've sort of explained that inflation impact maybe on the growth CapEx is limited because a lot of the equipment and other materials were already preordered. But got more general question about inflation from Abi Agarwal at Deutsche. Have we seen any signs of inflation creeping up at our operations? And how do we expect this to develop over the coming year? Yes. Well, in terms of inflation, No, no. What we have seen, of course, the scenario that we are leaving now is different to what we have seen on 2020. Copper price and commodity prices are up. For example, commodities that are relevant in our cost structure, Diesel went up and we as we capture the savings when the diesel went down last year, we're also translating That in terms of diesel expenditure. In terms of exchange rate, There is some pressures on the exchange rate. But if we put all the things together, I would like to put on the table our most powerful tool to counter The cost pressures, which is the CCP. So in 2021, we were very successful in capturing structural savings on the CCP. And now on 2021, we are going to deploy full potential of those savings. So savings not only driven by supply excellence and operational excellence as we have seen increasing the throughput at Antoinella Oxide plant, but also drives by optimization and the use of technology. So for example, minimizing the amount of people on-site that will allow us also to reduce the cost. So On 2020, we have the challenge of tackle the, let's say, the COVID inflation. On 2021, we have the normal kind of inflation, I'm very confident that we are going to tackle also that challenge and we are going to deliver within our guidance. Okay. And a question from Luke Nelson, JPMorgan. Within the cash costs, is it possible to break out the year on year effect in cents per pound of moving to 100% renewable power supply? Okay. Yes. Well, for example, I'm going to use the example of Centinela. On Centinela, last year, we had a saving Associated to the energy tariff reduction, mainly driven by our transit From coal fired power station to renewable power of roughly speaking $45,000,000 If we expand that example to the rest of the group, we are going to have an impact of roughly speaking The and sorry, we'd now go to a different type of question from Jitendra, Texan. What are you hearing on taxes and royalties as part of the discussions, which are It's part of the discussions which have started on the constitutional change in Chile. Okay. Yes. Well, in terms of taxation, yes, of course, you may be aware that there's some ideas presented by mainly coming from the Congress. And this is important because in Chile, The taxation and all the taxation discussions must be led by the executive branch, That means the President. So far, the executive power, the President, they are not keen To introduce new changes, remember that only in just February last year, we have the latest update to our taxation regime That introduced interesting benefit for our activity and the current government is not interested in making new changes for in the near term. So having said that, if Any discussion is going to happen. The discussion in Chile is not only around taxation, it's also about How the mining industry, being so important in the country, contribute to the Chile economic development. So and going out to the COVID impacts negative impacts in our economy, the discussion must be around Not only how we increase taxation, but also how we promote and maintain the competitiveness of the country as a mining country. So I think it could be a discussion around the taxation. It's not going to be in the short term. The most probable thing that this conversation will follow once we decide if we are going to change the constitution, The existing constitution on 2022 according to the referendum that I mentioned previously. And in any case, Being a mining country, the lawmakers must keep in mind that not only the taxation, but also how we contribute or Strength the Chile competitiveness in the mining space. And maybe I lost I'm losing the second part of the question, Andrew. Can you please remind me? Because it was about taxation on the second part. That's it. Great. It's just taxation or royalties. I was on mute. Okay. I think we're actually down to our last few minutes. So we'll just finish with one last question actually about Twin Metals, Again from Jatinder. Have you seen much change in the way the authorities are looking at Twin Metals under the new government? And that probably can be expanded to what is going on at Twin Metals at the moment, I think. Yes. That is I will start with that. Well, what we have in Materials, we present the MPO, the Mine, Plan and Operations Permit, which is the backbone of all the permits. Permitting in the U. S. Is complex because we need to tackle not only at the state level, but also at the federal level. Going forward, We are positive about the permitting. And also, we are positive about the projects, about the specific projects. The world needs copper. And the thing that we need to put on the table that operators like Antofagasta with our ESG credentials are only a handful. So we are the most more than a suitable Operator, for that ore body, and we are very keen to pursue the permitting, the necessary permitting on Minnesota and also at the federal level. That is I will comment from the general point of view. And I will open The mic to Rene, if she want to add something on the permitting. Yes, sure. You're right. We're going through the permits in both federal and state levels in relation to 3 metals. And I think that the question was also asking whether we have seen any different flavor coming from President Biden's Administration to mine or to the project. I would say, yes, we've seen good signs coming from the government of President Biden. He issued 2 executive orders some weeks ago. 1 of those orders was in relation to what is called the Americas supply chain. And the government is, of course, working towards having The right trend when it comes to supplying America with any kind of supplies and particularly with the ones in relation To Metals and Critical Mineral Resources. So mining was, again, Put on at the forefront of the discussion. We were we have been listening in conversation on how to enhance The mining and processing capacity in the U. S. As part of this executive order, they're going to be running this Analysis for 100 days, and then they're going to come with some recommendations. So we, as a mining company, are, of course, Very aware about that process happening, and we're looking forward to the conclusions of that analysis. Okay. So I think we've just completed in just over an hour. So if I can just thank you very much everybody for your attendance. And I apologize to people who haven't had their questions answered or not answered as fully as they like would like. And if you do have any more questions, please e mail myself or Andres Vergara, and we can answer you by e mail. With that, we'll say goodbye. Bye bye.