Good morning, good afternoon, everyone. Welcome to our 2023 financial results. Joining us today is Gary Nagle, CEO, Steven Kalmin, CFO, Peter Freyberg, our head of industrial assets, and Xavier Wagner, who's going to be replacing Peter when Peter retires next week. I'll hand over to Gary.
Thanks, Martin. Good morning to those in the room. Good morning and good afternoon. Good evening to those dialing in or via the webcast. Appreciate your time, and thank you for joining us today for our 2023 results presentation. So we'll follow a similar format to previous years. We'll start with the scorecard on how we've done and a very, very strong financial year for Glencore. Adjusted EBITDA of over $17 billion, made up predominantly, obviously, given our business structure of our industrial asset business of $13.2 billion. The biggest proportion of that coming out of our energy business, in particular our coal business. Coal had a very strong year, clearly lower than the previous year after the extreme highs we saw in 2022, given the geopolitical tensions and the higher energy markets, but still a very strong coal year and a pleasing result for coal.
Metals a little bit weaker as a result, largely from weaker metal prices, particularly in cobalt and cobalt payables, and some weaker nickel and zinc prices. Our marketing, once again, achieving above the top end of our range. As you know, our EBIT range and guidance for marketing is $2.2 billion-$3.2 billion, so very pleasing results of $3.5 billion above the top end of the range. We've done that a number of years in a row now, and the opportunities have been there in the market for it. We've seen arbitrage opportunities, we've seen higher vol, and that's allowed us to capitalize on these opportunities and post very good numbers. The other pleasing aspect about our marketing results this year is it's pretty much a 50/50 split between energy and metals.
Metals coming back very strongly, so we're very happy to see all parts of the business contributing very strongly in the marketing business. Net debt at $4.9 billion. Steve will talk a little bit more about that later. Distributions to shareholders during the course of 2023, a little over $10 billion. We've really paid back our shareholders, given back $6 billion in cash, approximately $6 billion in cash, and $4 billion by way of buybacks during the course of 2023. Then lastly, today we announced our dividend. As you all know, we have a very transparent and open dividend policy. We always pay $1 billion of cash from our marketing business and 25% of our equity-free cash flow out of our industrial business. So this is something that has clear transparency for the market.
Much of the street expected this dividend, so it's a $1.6 billion return to shareholders. Now, obviously, in other years, we look at top-ups around our net debt target, but given the EVR transaction, the capital to be spent once we close that transaction by Q3 of this year, and our intention later on to bring net debt down and spin out the business, we are not declaring any top-up, but this is our normal, transparent, and base dividend that we declare. Moving on to our ESG scorecard. On the climate strategy, we continue to keep to our progress and make good progress in terms of our Scope 1, 2, and 3 emissions. As a reminder, we've used 2019 as our base year, and we will run down our coal business as the primary driver in terms of meeting our Scope 1, 2, and 3 emissions.
We're the only major mining company that has these strong reduction targets for Scope 1, 2, and 3. We'll be 15% down by 2026 and at least 50% down by 2035. How are we doing that? We're shutting our steam coal mines. We've already shut five, and there'll be another seven mines closed, at least seven mines closed, in fact, by 2035. We're on course, we're on target, and we're doing our share for the environment. We will come out with a new climate transition action plan in 2024. As you know, we put this out every three years, and we bring it to shareholders. We've had very constructive consultation with our shareholders. Our shareholders have been largely very supportive of the path that we've embarked on, and in March of this year, we'll issue that climate transition action plan.
In terms of our critical minerals, our future-facing minerals and metals, we have huge expansion opportunities, some of it through inorganic growth and some through organic growth. I'll talk a little bit about our copper portfolio a little bit later in the presentation. On the social side, very disappointed to say that we once again have lost four of our colleagues during 2023. It's something that I know is very close to Peter Freyberg's heart, and with his retirement, it's something he wanted to ensure that we were down to zero fatalities because, like him, I believe that we can run and will run a zero-fatality business and send everybody home safely every day. He's done terrific work in the business we all have in terms of strong, visible leadership driving the fatalities down in our business and our fatality frequency rate now below the average of the ICMM.
However, it's still not good enough, and we have more work to do to reduce harm in our business. On the governance side, we maintain and we are committed to being a responsible and ethical operator wherever we operate around the world. We have a couple more investigations, which we hope to finalize soon, and we have two independent compliance monitors in the business. It's been a very constructive process with them. We're working very well with them, and we believe we'll be a stronger and better company through the engagement and work with these compliance monitors. A little bit of a scorecard, which is new this year, a scorecard on what we've done in terms of the portfolio management. As you know, we announced late last year the acquisition of EVR, 77% of EVR for $6.93 billion.
This is a long-life, low-cost, high-quality, best-in-class coking coal business in a terrific mining geography. We're very excited to integrate that business into Glencore. As I said earlier, we expect that transaction to close by Q3 of this year. We also bought out the remainder of MARA, the 56% that we didn't own, to move to 100% ownership in this brownfield copper project. It's a terrific copper project. It is low capital intensity, long-life, good-grade copper project in Argentina, very near the old Alumbrera, very close to the old Alumbrera. The ability to bring this to market when we want to bring it to market is de-risk significantly given the brownfield nature of that business.
Our joint venture with Teck in the NewRange copper-nickel project, we had, in fact, established that joint venture in the previous year, but during the course of 2023, we bought out the remainder of the minorities in the PolyMet company, which we were the majority shareholder in. So now we've gone to a full 50/50 joint venture where we own 100% of our 50% share in that joint venture, another brownfield project, and we look forward to working with Teck on developing that as the various approvals come through. And lastly, an acquisition of 30% of Alunorte and 45% of MRN in Brazil. This is one of the world's biggest and one of the world's best alumina refineries. It's low carbon. It's a terrific operation, very efficient operation. We closed that transaction towards the end of last year.
We're very happy to partner with Hydro, a world-class organization, and this is a tier one asset that fits very well into our portfolio. On the sale disposal side, as you know, we announced our Viterra-Bunge transaction, $1 billion of cash, $3.1 billion of Bunge stock. Again, that transaction we expect to close sometime around the middle of this year, a value creative transaction for Glencore, a bigger, better agricultural business created by putting these two excellent companies together. Mopani is an asset that, as you know, we sold to the Zambian government a number of years ago using a vendor finance loan. That was the structure. The government of Zambia has now entered into agreements or about to finalize agreements with a buyer where we will be able to recover a portion of that loan. So we look forward to that cash flow coming back into Glencore.
Koniambo, as we forecast and foreshadowed during the course of 2023, we said that come the end of Q1 of this year, we would work to ensure that we are committed not to fund ongoing operating losses. Now, we work very closely with the French government. We work very closely with our partners in New Caledonia. Given the state of the nickel market and the significant changes over the last 18-24 months, as you know, we've announced the decision to transfer Koniambo into care and maintenance, warm care and maintenance, from the 1st of March of 2024 for a period of six months. And in that period, we'll investigate the opportunities for a partner to come in and take over our share of Koniambo.
But we've kept to our commitment to the market, to our shareholders, to our stakeholders, that we will not continue to fund operating losses in that operation. Then lastly, Volcan. Volcan is an asset in Peru. As you know, it's a sale process underway, and we're looking to see a result from that process sometime in the coming months. With that, I'll turn over to Steve.
Thanks, Gary. Good morning to those in the room and those that are on the screens and listening through our webcast at the moment as well. I'll spend the next few slides, obviously, running through our 2023 performance. We'll look at balance sheet and capital management as well. Spend a bit of time on the 2024 to 2026 guidance.
A bit more information is being delivered here at the annual results presentation in respect to projections around CAPEX and costs of production over the next three years, which otherwise would have come at the time of the investor update in December, which we held it back for this presentation. And we'll, of course, do our update as we do at regular times during the year in respect to our illustrative spot cash flow generation at spot prices and just looking at a few EVR snippets that we'd look to introduce there on some sort of pro forma basis as we look forward. So on this slide, Gary's spoken to many of these points. We'll get to more detailed slides later on. But at EBITDA $17.1 billion, quite healthy by historical standards.
Not particularly material, but there was sort of towards the sort of accounting adjustments back in the copper business, there was around $200 million of some non-cash inventory-related adjustments that went through at the EBITDA line as well, obviously not cash flow flowing through. So you could arguably add back that sort of $200 million, and I'll talk a little bit about it, impacted costs and reported results on the copper side. So it could have been $17.3 billion before that number as well. We'll get through the EBITDA waterfalls, the EBIT slides as well. Net debt at $4.9 billion. That also in context of having paid out, as Gary said, $10.1 billion of shareholder returns during 2023 and having expended money on CapEx and developing the business.
Readily marketable inventories have come down a bit with some of the lower prices as one might expect, but that's working well within the business given the strong marketing performance and the embedded ROEs within that business as well. Very strong, healthy liquidity levels within this business, $13 billion at the end of December, committed lines. We have increased that in February by signing an additional $3 billion committed one-year facility. So sort of more like $16 billion as we sort of on a pro forma basis as we look at our liquidity position from that. Well, of course, through the cash flow generation, our ongoing refinance activities, that will allow us to quite comfortably fund EVR and generate the cash that we're doing at the moment with a net debt adjusted EBITDA of just 0.29 and still comfortably in that very low levels on any pro forma basis.
If we look at the industrial headline, as I said, there'll be a more detailed waterfall slide, which will run through the different variances. Overwhelmingly, it's down to commodity prices during the course of 2023. Quite a bit on the energy side, just given the leverage we have. Clearly, net business as well producing around 110 million tons. We saw realized coal prices, some of the main indexes were down roughly 50% period-on-period, but good cost containment within coal, and we'll see that as we look at some of the cost analysis going forward. Realized prices across cobalt, zinc, and nickel also had their impacts as well, but still a healthy by historical standard and still quite good percentage margins as we look our way through.
Within the metal side, quite clearly, it can be a differentiator positively or a headwind at the moment is our cobalt business as well. It is a commodity aligned with nickel and maybe lithium on the battery side that is suffering from oversupply and depressed prices at the moment. So that has heavily impacted some of the copper Africa earnings. We would produce 40,000 tons of cobalt production in 2023. And it's not only the 50% reduction in metal prices, also the payability on the hydroxide that had moved from somewhere in 70s to potentially low 50s during the course of the year. So the actual realizations for us on product out of DRC was more like 65% down as opposed to the metal of 50%.
And of the copper earnings, which we'll see later on within the overall metals business, was down $3.8 billion, $1.8 billion of that within copper, and the African business was $1.4 billion of that $1.8 billion, which was our KCC, Katanga Operations, as well as Mutanda. And just pure cobalt was around $600 million-$700 million purely year-on-year in respect of realizations on that business as well. The other big year-on-year variation within the metals business was in nickel, which was EBITDA flat for the year, having generated around $1.3 billion. And in 2023 was -$455 million. Just on Koniambo, Gary's spoken about trying to arrest and reduce that funding and cash consumption, which unfortunately we've been exposed to over the last number of years as we go forward.
As part of illustrative cost and cash flow analysis going forward, we see that nickel business ex-Koniambo at these prices being roughly a $500 million business. So we'll see a nice pickup. Obviously, still a relatively small part of business, but should start turning from quite a material drag in earnings to something that does contribute certainly at the margin while we see how nickel goes more long term. Obviously, energy was the coal story, as we'll see on the next page. In terms of variations, overwhelmingly, you sort of need a magnifying glass to see some of the other bars. If you look at price on the 13.1 as we work our way forward, of that 13.1, 10.3 of that was purely in coal. Other than that, almost explain all of the coal year-on-year variance.
That's across, particularly in thermal coal, where we've seen Newcastle and APR4s down 52%-55% as well. On the metal side, which cumulatively was $2.4 billion down in variance, it was pretty much equal contributions from the copper business, but within that, it was really cobalt. We were $0.7 billion down in the copper business. $0.6 billion was pure cobalt. Copper itself was relatively resilient during 2022 and 2023 and should be very supported and healthy going forward. Zinc was $0.7 billion and $0.9 billion as well. We've shown some of the realized variations in our production report a few weeks ago. We showed the realized price period-on-period in zinc was 27%. In nickel, it was actually 28%, notwithstanding that 16% was the metal price movement during the year. That's the huge discounts that opened up, particularly for the ferronickel product out of Koniambo.
They were just expanding as that product competes, particularly with the Indonesian NPI. So pricing was the main factor as we look although this is obviously a full-year scorecard on volume cost. And volume, we finished flat for the year. We were actually negative at the half-year at -1.3. So there was a positive pickup in volume. We had a strong second-half performance pretty much across the board. You would have seen that in the production report quite recently as well. And finishing the year at zero was positives, particularly in coal, having recovered from some of those weather blockades, other logistical disruptions that we saw in 2022. There was a bit of a pickup in coal volumes and some negatives across the metals business that contributed -0.7 on volume.
That was 5% lower on copper and cobalt, some in Africa, some in smaller businesses and nickel pretty much across the board. We'll see later on in our guidance on nickel in 2023 into 2024, we'll see a pickup both out of Australian and Canadian business, and that anchors a business that at least has some positive contribution at an EBITDA level as well. Cost as well, pleasingly, we have peaked, and we've seen the worst of the inflation cycle through the current cycle at 1.3 cost. 1.1 of that was seen in the first half of the year. In fact, the 0.2 that's just there notionally now for this period is really just that non-cash copper adjustment that I spoke to earlier. So it was flat on cost, and you'll see some of the cost analysis historically in 2023, 2024.
Cost in all of our businesses has been moving down as a function of inflation having peaked, a function of volume and other efficiencies that we've got within the business. So cost zero, that's in local currency nominal cost as well. We've had some sort of benefit from some of the currency depreciation, particularly within Australia and South Africa as well. Over the full year, some of the cost increases that we have seen, but they were really something that we were tackling earlier in the year. As I said, they've peaked, and in some cases, they've even moderated. It was across explosives and freight on the coal side. Of course, in South Africa, we've moved to more trucking, much more expensive within that particular business as well. That does come through the cost line. Reagents and explosives also in the copper business.
We've seen labour consumables in the nickel business. Down in South Africa, electricity obviously is a continuous challenge down there in terms of these local costs. We pick some of that out through the rand depreciation, but that does go through that particular level. That's particularly our alloys business as well. If we then look quite a busy slide, and Martin's done a good job of consolidating. Maybe it might have been sort of three or four slides historically, but this gets all the main commodities as a 2022 to 2023 recap across classic cost volume profit analysis that we have across copper, zinc, nickel, and coal with some explanations at the bottom across all three of those categories. Production, I think we've covered quite well in the production report. We'll see how 2023 obviously rolls into 2024 to 2026 on the upcoming slides.
But in terms of copper finishing at $4 billion with that non-cash, it would have otherwise been $4.2 billion before some of those year-end adjustments, particularly in the African copper business as well. A big impact was clearly the byproducts where we went from a $0.0105 credit across the business to just $0.50 in 2023, $0.48 increase. Headline, you can see before byproduct, $1.85 went to $2.20. Take out the $0.10 non-cash. It really was $1.85 up to $2.10. That was up about 13% year-on-year in terms of cost before byproduct. That was the inflationary pressure coming through the business. That's moderated, and in many cases, is starting to come down as well. As we look forward, spot illustrative for the copper business now is a little bit above $4.
We're at $4.1, slightly declining cost structure in 2024, held back by lower Antamina tons, which impacts our copper business, should then start working its way down as we get through the next two or three years. On the zinc side, 2022 a tough year in the zinc business, particularly exposed to European power prices and the smelting part of the business. That's been part of the reduction in costs from the $3.21, you can see, to the $3.08 during the year. Byproducts relatively flat. Period on period, we were $0.42 a pound in first half, $0.49 for the full year. Price really reduces quite heavily post-byproduct as we go into 2024. We've got the ramp-up of Zhairem, which finished the year ramping up in 2023 reasonably well. We've still got a ramp-up profile during 2024. We'll look at some of those trends going forward.
So at $1 billion of EBITDA for last year, it's the biggest pickup on a spot illustrative to do with costs and volume picking up somewhat. It's looking at sort of a $1.8 billion business as to where we see it at the moment. Nickel having been flat. That's with Koniambo. We'll look what it looks like that business without Koniambo in 2024. That looks or it illustrative at a $0.5 billion business going forward. And coal, of course, $8 billion with still higher margins as we saw an average Newcastle price during 2022 of $360 in 2022. 2023 was $173. We're running spot illustrative at a Newcastle anchor of $122. That's still a very strong business at $4.5 billion of EBITDA, generating a lot of cash because it's really sustaining capex and the ongoing managed rundown of that business over the next few decades, if we like.
So I think that's an historical context. I think more meaningful will be really looking at that business over the next few years and some of the cash flow generation, all of which is very healthy at the moment. On the marketing part of the business, as Gary said, a strong outturn at $3.5 billion. You can see at bottom right by historical standards, it looks strange relative to the 2022 sort of outlier, maybe a once in a X number of years event. We were happy to take that. It certainly contributed both in the marketing and the industrial to those outsized returns, but it shows the leverage and the capability of this business that can out-earn and outperform during particular periods of both energy and other commodity shortages and spikes that we may have as well.
A good even contribution at 1.7 apiece across both metals and energy, and even between first half and second half was very stable, 1.8 in the first half finishing at 3.4. Guidance for what it's worth at this stage, it's obviously early in 2024, is sort of $3 billion of EBIT anchored around middle of the range, a normal middle of the range of $2.7 billion. We're still in elevated interest rate environments. Part of our EBIT is capturing interest that's recovered through our transactional terms. So you are recovering that at some sort of additional spread relative to what would be a more normal interest rate environment. So quite comfortable on that $3 billion. Wouldn't be putting less than that in models at the moment as we look to 2024.
If we then look at the net debt trajectory, we started the year at flat, and we had Funds from Operations $9.5 billion. That is after. Which is part of how Funds from Operations it will be your operating cash flow. That's post-interest, post-tax. There was a very material lag on our tax payments in 2023, H123, in respect of particularly the energy earnings in Australia and Colombia through 2022. Mechanically, you pay provisional taxes. You file your return in Q3 of I mean, in Q2 of 2023, and you pay these big catch-ups in respect of the previous year. That was $2.7 billion. It was $1.8 billion in Australia, $0.9 billion in Colombia. And if you look at page 27 of the financial statements, you'll see the income tax payable line has gone from $4.6 billion, which sort of reflected the fact that we still had to catch up.
It's gone down to 1.8. There was a reduction of 2.8. So that's just obviously had to be paid, absorbed, and we're very happy to do that. The more tax, the better, clearly, within earnings. But you have some mismatches, and you have some timing. The net CapEx cash flow at $5.6 billion went in line. Headline, $6 billion of sort of capital that went onto the balance sheet. There were some proceeds and disposals and a few leases, but net cash was $5.6 billion. We dispersed $0.5 billion on M&A. All items were mentioned by Gary. We bought the Alunorte towards the end of last year around $0.7 billion. We bought out the majority of MARA to take 100% at about $0.5 billion, and we got most of our Cobar proceeds during last year at about $0.8 billion. There are some deferrals that are still going to come through.
We had $275 million deferrals. In fact, one of its already been paid as MAC did their capital raise over in Australia in a few weeks' time. So $75 million, and we've still got different contingency amounts that's still part of that consideration. We released some non-RMI working capital, $2.8 billion for the full year. $2.2 billion was in H1, $0.6 billion was in H2. There's still some float within the overall business that could come back at some point. I would say we're still not quite in neutral. There's still potentially a bias that some of that, even in a normal cycle, should come back within non-RMI working capital. $10.1 billion of distributions and buybacks finishing the year at $4.9 billion, having done a lot of good business and shareholder-friendly payments during the year as well.
What does that mean now with particularly pro forma-wise EVR timing of shareholder distributions and what we've done in terms of capital allocation? The distribution policy mechanically has been in place for three or four years now as Gary went through. It's the $1 billion in marketing and the 25% of industry cash flow. That sacrosanct-based distribution, take it to the bank, that cash is coming each year. And then there's a consideration around top-ups that we do from time to time, at least twice a year. That equates to $0.13 a share, still a sort of 3% cash flow yield on the like. Given EVR, and we're comfortable, and we think that that's a good piece of business that the company's done in terms of risk-adjusted returns, long-term quality business. And we're always considering deployment of capital. M&A is one of those. Buybacks is one of those things.
This definitely competed for the company's attention last year as we went through our sort of capital allocation. What it clearly does do is put a pause on some more sort of distributions. But long-term, we're very comfortable that the shareholders will ultimately be rewarded through cash returns and long-term longevity and optionality and value creation that exists in the business. But we did start at $4.9 billion. We'll spend the $1.6 billion pro forma for the $6.9 billion. And we'd announced back in November last year that the business will now be managed towards that same process of capital allocation, but we've reset the $10 billion down to $5 billion in preparation for the intended demerger within 24 months. That's effectively to say the metals business, ex-coal, is a smaller business. It's got a different profile. It's got CAPEX profile.
It can't necessarily, at the ratings and capital strength that we want, sustain a $10 billion. The coal business of itself is a cash-generating machine, but we've assumed that spin it out debt-free, that can be challenged as to whether it can take on some debt, and we can sort of look at different structures. But in the ordinary course, we said we want to get to $5 billion. What does that require once we've taken on those two yellow bars? We've got to reduce debt down $8.4 billion. As we'll see later on, the business is generating $5.2 billion of free cash flow. That's ex-EVR. EVR, highly cash-generative, will come in at some point. We've just shown illustratively, basis tax numbers, what a 1 July, both in a volume and on an annualized basis, this would be around $3 billion for our 77%.
That, of course, is going to help in some of the de-leveraging. We've got Viterra. There's a cash element, maybe some working capital. That gives us confidence that that de-leveraging towards $5 billion will comfortably happen within the 24 months. And you're going to put in your own assumptions around prices and cash delivery and the likes, but that sort of prepares the business, if you like, for getting to that $10 billion and allowing a demerger proposition that we talk about going forward. That will still be pay the base distribution, have some patience. We think the capital allocations make sense. We think we've done some good portfolio management during the business. Shareholders will ultimately be rewarded in spades. In terms of CapEx, we've shown here the well, where we've spent the money in 2023 is $6 billion in terms of capital onto the balance sheet.
The cash flow receipts after sale of PPE was $5.6 billion, which we saw in the cash flow slide before. We've given different buckets. I think it's quite useful as to where that's being spent across the business, both in commodity and some of the major categories. You can see across processing, across fleets, fixed fleets, mobile fleets, tailings, deferred mining, all the different categories there is back in the appendix of the presentation as well. There's a slide 29. All means peruse it. Bedtime reading maybe later on. More useful and more important goals going forward. What does it mean? 2024-2026, we've got an average $5.7 billion industrial CapEx. We haven't given year -by -year because that is a mug's game within this business as well. The exact timing of cash flow projects, expenses, milestone payments, delivery, and these things, we're very comfortable that that's a good average.
Over 5.7 from an overall long-term business, it doesn't really matter whether it's a six in one year or 5.4 the other year. We've historically underspent. Sort of there tends to be a more lag in some of that as it potentially sort of moves out. So we said 5.7, very comfortable that that's something that's where the business is set up and will support the delivery of production and some growth within the business as well. Separate from that, because we didn't want to contaminate what that base business is, we have earmarked $400 million in aggregate to the key Argentine growth projects, both in MARA and El Pachón. That's cumulative, both projects, over three years. Both is in I'm not saying it's 50/50, but it's both sort of $100 million +, at least in each.
That just shows quite significant effort that the work and the team is doing to get these projects further up the value chain in terms of exploration, studies, engineering, drilling, community work, some civils, various sites and stuff that they're doing at the moment. It's getting more intense. Senior management will be making a trip down there to also Argentina in the next month or so. It's quite an exciting proposition. Gary will talk about some of the copper growth as we look forward. This is ex-EVR. Of course, we don't own the business. Going through the various approval process, expect by Q3. The majority of the CAPEX, as we look over that three-year period, 50% is in copper. Collahuasi's spending quite a bit of money. You'd see that through some of the JV partners as they report some of their own views of that.
There's a processing project to get it to 185 tons per day, ultimately to 210. We'll see Collahuasi starting to increase production through this next three-year period. I'll talk to that as well going forward. There's quite extensive deferred stripping, fleet replacements, which is normal part of the business in these very big open-cut operations. Nickel, completion of the onramping depth, that by the end of 2026, 2027 gets our ex-Koniambo business back towards the 100,000 tons of nickel per year. Coal is just sustaining fleet replacements, mining operation as we go through. Even top right to bottom left, you can see coal is sort of continuing to shrink as a percentage of that overall sort of capital part. You can see that top right, it sort of goes a little bit through a quartile. It's about 25%, and then it keeps reducing as we look at those.
In terms of guidance, I think some important slides just to wrap up, and then I can hand back over to Gary as well. On the production side, 2024, we pre-announced that already at the time of the production report a few weeks ago. Copper-based business is actually slightly growing, and that's before the 2027-2030 trend, as I'll say. We sell cobalt. That's the reason for the 2023-2024. And 2025-2026 is during that period that the Mount Isa copper operation reaches end of life, which was also announced. Mount Isa produced 69,000 tons of copper in 2023. So that moves out of the system in the 2025-2026 period. You do have some increases, particularly Collahuasi, as I said, in 2026, and Mount Isa goes down.
As we look towards 2027, 2030, that period, we see Katanga, particularly having been held back at a 220,000 tons per year, moving to sort of 260,000-270,000. As we get into 2027, some of that is land access. Some of that is sort of advancements in stripping and ore access that we look in that business. Then clearly, 2027-2030 is a period when we should hopefully start seeing some of deployments of capital towards some of those longer-term, particularly Brownfield, ultimately. So El Pachón is obviously there as well. Gary will talk a lot about it, but the trend is higher in copper, where we have that 1 million tons per annum of expansion capability. Cobalt, for now, has been taken back a little bit in 2024 on account of Mutanda, sort of slowing down some of its potential, both in cobalt and in copper.
Then 2025, 2026, that could be brought back. Obviously, still subject to market conditions, but that's a working assumption that volumes step up again 2025, 2026. In zinc, you've got a step you've got Zhairem in 2024 being a positive movement. You've got Antamina having very low zinc variability, particularly in 2024. You'd see it in TAC and BHP to the extent that they provide some of that. But just our share is about 50,000 tons of zinc lower just in 2024. It then bounces back Antamina. So it's very variable, very volatile, particularly on the zinc grades as it moves through its plan as well, and then gives up some of that again in 2026. And zinc in 2026, you've also got the Lady Loretta, a satellite operation at Mount Isa reaching its end of life.
All that culminating, coal fairly steady through this next three-year period and then starting to move towards its decline with five operations having closed in this more recent period. You've got at least seven reaching closure times towards the end of the 30s and then meeting our 2035 part of our 50% production in complete emissions by 2035. Overall production, even ex-EVR, relatively flat. You can see in copper equivalent units, EVR, we put in there our 77% of the 25, so it's 20 million tons or so. That adds 16% copper equivalent volume to this business, reasonably material, as we look our way through. What does that do to what is our cost doing? All of it's heading finally in a positive direction, whether it's through byproducts, whether it's through with inflation.
So on the copper side, this year, as I said, we expect 2024 would have even been lower, but for Antamina, which normally contribute Antamina steps up again in 2025. So if we were to roll that forward, all things being equal, you would have another step down, even with cobalt prices being where they are. Zinc steps down quite materially in 2024 in a post-byproduct. That's effectively Zhairem ramping up a lot of that. So you get the denominator impact as you get more units and additional byproducts out of Kazakhstan, Australia, gold, silver, lead as well. Nickel, big rebasing around non-KNS at a $489 post-byproduct across our Canadian and Australian business. At least we can hopefully start taking brackets away from numbers within the nickel business. And coal continues to hum along at very good cost structure, $66.8, and a strong margin environment as well across our business.
That's obviously ex-EVR as well. Finally, a slide before I hand over to Gary. I think it's probably almost one of the go-to slides as people sort of calibrate this against their own models and thinking. We obviously have the benefit of sort of real-time access to this information and what our business is doing at any points in time. We've got an updated spot prices. This was end of January. As we see prices today, we would think it's probably slightly higher if we were to recut. We've seen metals prices in nickel, copper looking okay as well. So we've got $4.1 billion in copper. I've given you costs. I've given you production. It's just mechanically doing the math around that. Zinc business, a nice step up given both volumes in its business as opposed to the byproduct units in Antamina. Nickel ex-KNS is $0.5 billion.
Coal, $4.5 billion at an anchor, Newcastle forward $120, which is about where it is at the moment. Other is the oil, the alloys. Hopefully, alloys start kicking in a little bit as we move forward, having brought the alloys Naughton business. This is where it would go, our equity pickup of those businesses going forward. Marketing, that's at a $3 billion EBIT. There's $15 billion interest tax, and CapEx at the $57 gets us to $5.2 billion. Within the $4 billion, which is footnoted later on in the presentation, there is a preliminary estimate for KNS care and maintenance costs. So that is in there. Of course, there's some cash that's there to support that business. But we've taken it out of the nickel business specifically and put it down into another category. It's still an estimate, still working with a team on what that might be.
And then EVR, just basis Teck numbers, our 20 million tons or maybe a little bit under 20 with their range of 24-26 at their recent costs and a forward price on coking coal of the $290 at a 92% overall realization across the portfolio gives you a $3 billion, $4 billion out of 77%. So that starts looking at what a sort of pro forma business could look like on a 12-month basis. And then, of course, as you flow that $3 billion, yes, we've got to fund $6.9 billion. Yes, there's CapEx, but it's materially accretive in terms of cash flow as we go forward. So very excited about bringing that into the stable, generating the cash, getting our debt down to where it is, and keeping shareholders happy. So with that, I'll hand back to Gary.
Thanks, Steve.
We've put a few extra slides in the presentation this year just to give an outline of what the portfolio looks like, where we are, where we're going, and probably to highlight the fact that our portfolio is perfectly positioned for the future, where we are today, and where the world is going. So I know there's a lot on here, and we're not going to go through each and every word. But I think really the message and the clear indications in the world today is the world is energy hungry. The world needs energy. It doesn't matter how you look at it. You've got your normal economic growth where the world continues to grow and needs energy. But where else is the energy coming from? You've got electrification of mobility. Clearly, the growth in battery electric vehicles, significant growth.
You have electrification of residential heating and industrial processes. We've seen a huge move towards that over the last 12 months and continue massive growth in that direction. And obviously, the other area where we see huge amounts of energy growth, which is outside of the normal energy growth, is data centers, AI, crypto, those sorts of things. So I mean, looking at the graph and some of the projections out there in terms of the energy need the world or the energy demand the world will need in order to grow and continue on the trajectory we're going is very strong, absolutely very strong. And how is that hunger for energy being fed? Now, a lot of money being spent, as we all know, in renewables, solar, wind turbines, and the likes, and huge trillions of dollars have been spent on that. But there's two elements around that.
One, trillions of dollars being spent, and it's still not enough to meet the growing demand for energy the world needs. And number two, and this is where a lot of the a lot of the world forgets that it's one thing building a solar panel, a solar farm. It's one thing building wind turbines. But these need to be connected to the grid. And the ability to connect them to the grid is massively challenged. By some estimates, the world needs to spend over the next 16, 17 years over $11 trillion on grid spending just to be able to connect that power to the grid. Very, very hard ask. Now, the world has to do that. The world needs to grow. The energy demand is there, and we need to decarbonize. But it's not going to happen overnight. It's going to be difficult. Funding's needed. Capital's needed.
Materials are needed. And in that time, we're still going to need the power. So where will base, low, cheap power come from? It's still going to come from hydrocarbons. It's still going to come from fossil fuels. And if you look at the far left-hand or the far right-hand graph, you can see the amount that's still coming for power generation from fossil fuels. Now, in the Western world, nobody's building new steam coal mines. We're shutting, as Steve mentioned, 12 mines; at least 12 mines of ours will be shut over the next between—well, we've already shut five, and we've got another at least seven between now and 2035. No one else is building big steam coal mines. And it's the right thing to do, to shut mines, to shut steam coal and take it out of the world is the right thing to do.
But what does that mean when you've got a demand for power which translates into a demand for fossil fuels and the supply response is not there because people are shutting mines and not developing new mines? That's got to be bullish for fossil fuel prices going forward. And we believe our steam coal business, as we run it down responsibly, we prefer a value over volume model that the value of these mines and the margin that these mines will generate over time as we run down that volume will be material in our business. So from an energy perspective, supplying the energy needs of the world today as we transition to a low-carbon economy, we are perfectly positioned within our steam coal business. Moving into the forward-facing commodities or the metals required for the energy transition.
I mean, if you look at the top left-hand graph, we've seen China's demand. Everybody last year spoke about China being weak, and we all know property was weak. You can look at equity markets in China, and things have been weak. But ultimately, we go on what the order book looks like, where we see material flowing. Last year, China was strong, particularly in the commodities that we are strong in. Demand for copper in China last year was up between 5%-6%. You can see it for zinc. You can see it for copper. You can see it for aluminum. Very strong demand from China last year. What's driving this demand? It's not a little bit, yes, it's property completions.
But when you look at the other big growth pillars within the Chinese economy, it's solar installations, it's wind installations, it's battery electric vehicles. This is driving its grid spending. This is driving the demand for materials in China. And we see the order book strong this year again. They continue to buy materials as we transition to a low-carbon world. So in the middle, when you look at global growth of these key commodities that we trade, yes, the blue shows some implied demand weakness in the traditional markets. But that's more than offset, more than offset by these new demand growths from EVs, from wind, from solar, and the like. And that's why we've seen growth in China. And we expect continued growth in China for demand in these key commodities.
Moving to the last part of the slide or the right-hand side of the slide, I think the numbers speak for themselves. It's not so much the percentages but the size of the bars where you see solar. Yes, last year, solar was up 100%. This year will be up. Can't read that number on that slide. It's 18%. But in terms of actual units, it's bigger than it was in 2023. This is more units going into China for solar, same for wind, same for battery electric vehicles. The fact is they are producing more and more of these units, which means they need more copper, more nickel, more cobalt, more aluminum. Likewise, when you look at global forecasts and the momentum over the next five years, that's just a 2024 number. But when you look at a global longer-term or medium-term forecast, growth is significant.
The amount of metal needed to meet these targets is enormous. From our perspective, the demand side of the equation is very strong. Let's move to supply. The left-hand side is one of the leading publications on their data on what happened to copper supply during 2023. Now, we know the story of 2023. We started where everybody expected 2023 to be, in fact, a slight surplus in terms of supply into the market. And in fact, the world thought 2024 would also be a surplus because you had the growth of the new big projects, Quellaveco, QB2, Kamoa, all those coming on. But as 2023 progressed, we had issues in Panama. We had issues in Chile. We had issues in Peru. We had issues in Africa. And ultimately, what everybody started the year thinking supply would be was down over 1.3 million tons for the year.
And 2024, again, there are challenges around where copper growth will come from. You now have QB2 at nearly full capacity. Quellaveco's at nameplate capacity. Kamoa is done. Oyu Tolgoi is done. There's nothing more coming. We saw BHP's results the other day. In 2-3 years' time, Escondida starts dropping off again. So where are the new tons? And when you look at TCRCs, you look at stocks in warehouse, that sells you a story. The market is tight, and there's no ability to supply those tons into the market for that growing demand that we spoke about on the previous slide. So that tells a great story where our metals businesses, we are absolutely set up.
I'm going to spend a little bit of time in a slide or two on our copper business because our copper business has really got huge potential to continue to grow and to supply the future needs of the world at very good margins for our business. Before we go there, I just want to talk about one other critical mineral. In some parts of the world, steelmaking coal is classified as a critical mineral, particularly in the EU, and they're discussing it to do the same in Canada. Steve talked a little bit about EVR. When we closed that transaction, EVR is a major producer of hard coking coal, 24 million-26 million tons, our equity share around 20 million tons. That high-quality hard coking coal is absolutely essential in steelmaking.
That steel needed for the transition, whether it be for the wind turbines, whether it be for the transmission grids, whatever it may be, that steel is needed. There's no immediate or short-term replacement for hard coking coal. 90% of the global blast furnace fleet is less than 15 years old. It's a very young fleet of blast furnaces. This will be for a very long time. The demand for hard coking coal looks very strong over the next short, medium, and long term. Those are the three pictures of where our business is: an excellent steam coal business that's running down in an energy-short world, an unbelievable metals business where the demand is growing - and I don't think the world can keep up with that growth - and a soon-to-be incorporated coking coal business with a very good future for steelmaking coal.
So moving a little bit onto what our copper business is - and it's not a full deep dive, but a little bit of more detail about what we have in our portfolio - because this is ultimately where huge value, huge growth is created for our shareholders and for our company through our copper business. What have we done over the last few years? So we've reset our portfolio a little bit. We've disposed of some of the smaller and more difficult mines. Mopani, as you know, is gone. And we'll recover some of that vendor finance loan through the process of a sale process that ZCCM is going through at the moment. We've disposed of Ernest Henry and Cobar. And we've used the cash that's come in through that, recycled that cash very well, some to shareholders and some investment in our business into very good assets.
So our business is now focused on large, long-life, low-cost copper units in excellent geographies. We've spent time during the year updating that portfolio. We have, within our portfolio, nearly 20 billion tons of copper resource at a grade of nearly 0.6%. And I'll talk you through some of where that's come from. A little bit, obviously, come through a joint venture with Teck, our NewRange joint venture with Teck. That's a copper-nickel project. We've now moved to 100% ownership in PolyMet. As you know, before, we were a majority shareholder, but we didn't own the whole of the company. We've now taken out the minorities. And that's added quite a lot of resource to our global resource in terms of units, 1.5 billion-2 billion tons of resource. The El Pachón project in Argentina is looking more and more exciting by the day.
I mean, the more we drill, the more we find. We've added another 2.7 billion tons of resource to that through the drilling. The drilling program is far from complete. Sometimes Peter Freyberg says, "Well, we better stop drilling because we can keep finding more. So when do we stop?" It's a terrific resource base. We continue to grow that resource base, and we've added 2.7 billion tons of resource to that. The other big area of growth within our resource base in copper is MARA. As you know, during 2023, we bought out the remaining 56% of that brownfield project, a very good project I mentioned earlier near the old Alumbrera infrastructure. That's added over a billion tons of resources to our resource base.
That takes us up to close to 20 billion tons from where we were a year ago, reporting probably about 14 or 15 billion tons. Going forward, I talked about the drilling at El Pachón. It's now going to be Xavier's decision if we stop drilling or we carry on. But ultimately, this is a terrific resource base. It's a strip ratio of 0.24. That resource base has so much more potential. We are earmarking $400 million over the next three years. It's not in our capital numbers, but we're earmarking $400 million over the next three years to continue the development and the feasibility studies and early works on those two key projects. Both projects, as you know, in Argentina, a very business-friendly administration in place in Argentina. Steve mentioned a trip to Argentina. We'll be going down there next month.
Ann Edwards and I, our head of corporate affairs, met with some of the senior government officials from Argentina in Davos recently. The message coming from them is very encouraging, very business-friendly. They're looking for investment. They want to give certainty to investors. They want to see investors come and spend their money in the country and be able to take their money out, ultimately create jobs, create opportunities, and do well. The noise coming out of Argentina is excellent. It's looking like a very exciting country. We have two big projects there. For us, excited about it. We're building internal capabilities. Now, we're not going out spending huge amounts of money on greenfield projects right now. Don't get ahead of yourselves. We're just showing you what the possibilities and options look like. We're staffing up, bringing the right resources in there.
But at $8,500 copper, I can guarantee you we're not bringing on any new units. The market, as I said, looks tight, but the price is not reflecting that tightness. As Glencore, we would never bring units into a market in anticipation of higher prices. We want to see higher prices. We need the and we believe the world will have higher prices because of the supply-demand deficit. It's only at that stage will we bring these units into the market. On the final slide, just a quick overview of what we have and what we are. This may be a familiar slide. But just to cover a little bit of what we've spoken about before, in terms of the transition commodities, we have a major portfolio.
We're in all the right commodities, very, very large in copper with huge growth potential in copper, a growing industrial business in aluminum, cobalt. We believe the future for cobalt looks strong despite current weakness. It's more of a supply issue right now in cobalt rather than demand. And a nickel business, yes, a nickel business is a little bit challenged at the moment. But given the geography and the cost structure of our nickel business being in Western Australia and Canada, a good future for our nickel business. We spoke about our copper projects. We have more than 1 million tons a year of potential growth. Of course, no one's ever building any four or five projects at the same time. That would be crazy.
But the ability to bring on over 1 million tons of production as the world needs it, as the price adjusts to require those units in the market, we have that ability within this business. We haven't really spoke much about recycling. I know it's been a topic in many other presentations. That business continues to move along very nicely. We have good tons coming out of that business, cheap, low-carbon. Some of you on the trip to our recycling operations in U.S. and Canada last year, you've seen the quality of that business. And we continue to promote that business, A, because it's the right thing to do, and B, because it's a very good return on investment for us within Glencore. And with that, we also have our current energy needs. We touched on our steam coal business.
We supply the energy the world needs today as we transition into a decarbonized world. And lastly, obviously, our marketing business, which is a terrific business through the cycle, has delivered, continues to deliver, yes, the last few years well above the top end of the range. But regardless of the markets, that's delivered a solid result, which underpins a very good dividend to our shareholders. Steve touched on the spot illustrative numbers, EBITDA and free cash flow of $15 billion and $5.2 billion, respectively. And obviously, once EVR closes by Q3 of this year, that adds an extra $3 billion of EBITDA basis spot pricing. With that, I'll turn it over to Q&A. Good mornings.
Great. Thanks. Thanks, Gary and Steve. Can we just talk a little bit about the coal markets? Obviously, there's a lot of worry about pricing and how low can coal pricing go. Do you think we're getting to a level now in the different regions, like with the sort of Newcastle benchmark, is there much more downside risk if we continue to have lower gas prices and mild winters and so on? Do you think we're getting close to the floor? That's the first question.
Yeah. Look, I mean, obviously, coal price at $120, if we were sitting here three years ago, everybody would be celebrating at a coal price of $120. They wouldn't be able to believe it. So we just need to be a bit measured in terms of what is a low and what is a good or a bad coal price. I mean, $120 out of Newcastle is still not a bad coal price, particularly given our cost structure. What we are seeing, and maybe this will answer your question, is we're seeing, and particularly in South Africa, South Africa struggles with the rail. So a lot of the coal's now being trucked. And through the course of January and into February, we've seen a significant amount of coal not being transported by truck.
With a rand where it is and APR4 or FOB Richards Bay prices, where they are around about $90, it's not making sense. So those trucks are now coming out the system, and that coal is not going down to Richards Bay, down to Maputo, down to Durban. Not going down anymore. So the answer is we're into the cost curve for those in trucking in South Africa. We've seen some small supply response in Indonesia on the low CV as well. So there's no crystal ball, Miles, as you know. But it's the indications in the market of where you see tons coming out and exports not happening. We're seeing it in South Africa. We're seeing it in Indonesia already. So we're confident that we're in a region now where we don't expect much more downside of coal for the remainder of the year.
Maybe just on 32, I'll keep it at that. On cobalt as well, obviously, the market looks heavily oversupplied. It looks like sort of China Moly or CMOC have swamped the market. How much inventory have you built, and how long do you reckon it'll take for that market to normalize again?
So the cobalt market, I mean, you could probably put demand into three buckets, as I'm sure all of you know. You've got electric vehicles. That looks strong and remains strong. And you've seen some of the numbers on there. Of course, the LFP batteries don't use that. But we're talking about the long-range, higher end, and that looks very good. So the demand side looks good for battery-electric vehicles. Aerospace and defense is the other bucket, and that looks very good, clearly, with current geopolitical issues and things like that. Very good. So that's strong. And what's been quite encouraging where it was weak historically but is now coming back is consumer goods, electric goods in homes. And we've seen that spending coming back. So the demand side is looking encouraging. Supply, Miles, you're right. We've got Kisanfu ramping up in the DRC.
You've got the HPAL nickel plants in Indonesia with the cobalt byproduct. So this is an issue not about demand. This is an issue about supply. We think, and we do have stocks, and we're not rushing to sell stocks. These are not stocks that we need to rush them out the door. Cobalt hydroxide doesn't take up much space. It's fine. The carrying cost is not all that much for us. We'd rather hold those stocks and bring them into the market when that supply-demand balance gets back into place. And in fact, the demand continues to outstrip supply. We then have the ability to sell those stocks into the market when we see higher prices. So for us, I mean, again, it's not a crystal ball thing, but there is a period we do see a path to a supply deficit again in cobalt over the coming periods.
Liam.
Morning, Liam Fitzpatrick, Deutsche Bank. Two questions on the coal-co separation. If we look at the slides, it looks like you can have a very cash-generative coal business once EVR completes. So do you still think it's the right thing to do to split the businesses? And should we expect you to really come out and try and sell this to shareholders post-deal completion? And then on the timing, is it really this $5 billion net debt level that we should be thinking about in terms of dictating the separation timing, or are there other areas we should think about? Thank you.
I'll let Steve talk about the net debt. I mean, when we announced the transaction, we said our intention was to spin out. That is our intention. But it's always subject to what our shareholders want. We will consult with our shareholders. It's the decision of the shareholders, ultimately, to do that. But as we sit today, it's no different to when we announced the transaction. Our intention is to spin out.
Yeah, Liam, I mean, the $5 billion is the number that we felt was appropriate to allow the balance sheet separation because the metals business, given it's a smaller business, we've seen some of the margin environment there. We've got the copper sort of growth profile. It would be a level that we don't want to be sort of continuously jumping and changing and moving. We would have felt that their anchor's strong triple B. And we can go back to a capital return framework that we have with the metals business that we previously had at the $10 billion. We'll be at the $5 billion. So $5 billion is sustainable for that business, generate the cash, sort of pay it out.
It would need to, from our perspective, in terms of sort of balance sheet prudence and the right way to separate the business, we want to get to $5 billion.
Just as a quick follow-up, where I was getting to on that, is it really that that will dictate the timing, i.e., you'll do it as soon as possible once you're close to that level, or is it you can get below it just as long as it's within the 12-24 months?
Well, I mean, the within 24 months was always put out there as being a level that we were highly confident and comfortable that would allow one to get from wherever we were pro forma to get towards $5 billion. So depending on what scenarios you run about prices, it'll be I mean, at $5.2 billion, if that number was higher, of course, you're there quicker and various other scenarios. So it just is clearly a number out there that we are working towards. We're managing the balance sheet towards, clearly, now with the fact that base distribution and moving towards that $5 billion. So it's a financial sort of environment that would allow it. Then there's all the work that obviously needs to happen. I mean, this is a massive undertaking when you talk about a large business that needs to demerge and separate.
If you think about all the work, getting EVR in the first place, then you need to start untangling offices, companies, tax rulings, law firms. I mean, this is not a job you do in five minutes anyway. It's effectively a function of time. It's a function of balance sheet. It's a big decision. It's a function of shareholder engagement as well and making sure that if that's ultimately what's put to shareholders, that that is absolutely the right decision. That certainly is the intention. But shareholders own the company. Bob?
Yeah. In terms of MARA, if we think about the $500 million that you spent last year, should we think of that as an option on future copper price? Or when you sanction that $500 million, does that require MARA to show up in the portfolio at some time? And what causes you to pull the trigger on MARA other than, say, $10,000 sustainable copper?
I mean, if you look at the graphs that I put up, I mean, you could call it an option value, but it's not an option value. MARA is one of the lowest capital intensity projects in the world. It's brownfield. It's now in one of the best geographies for projects in the world, to be honest. So it will show up, but we will be absolutely disciplined. So we are here deploying shareholder funds, and we want return for our shareholders. So to bring on copper just because we think it's a nice project or it's low capital intensity, that's not what we do. We bring on copper when we can meet and we're confident we can meet our hurdle threshold returns. So yes, that ultimately will make it to the market. Would we put a time date on it today? No ways, because the market will dictate it.
Now, whatever the copper price is—excuse me, the copper price is—that will dictate a sustained copper price, that dictates the right time to bring that project onto the market, that will be it. And if we need to sit on that project for an extended period of time, it's okay because we'll make it back in spades later when we bring it on in a higher-priced environment. We certainly won't be rushed to bring it on because we deployed this capital, and we think we need to bring it on just because we deployed the capital. The money we make by, in fact, waiting will be significant.
In a follow-up related to the coal potential demerger, does that process of acquiring Elk Valley, generating free cash flow from it, getting the balance sheet fixed, does that keep you in any way from being nimble or strategic for things that happen in the market between now and the next 24 months?
No. We will remain nimble and remain strategic. At the end of the day, I've said before, this company was built through M&A. It's in our DNA. But we only will do value accretive DNA or M&A. So we have balance sheet strength. We have balance sheet headroom. And to the extent the right opportunity presents itself, it doesn't stop us doing it. But we're not out there with a shopping list going to run after something just for the sake of something. The right value, the right proposition comes up, we have the ability, the agility, and the nimbleness to be able to.
I think shareholder backing to be able to back something if it obviously makes sense. I think they'd get it.
Jason.
Jason Fairclough , Bank of America. Two quick ones. First, just on Koniambo. How should we think about a divorce payment or ongoing requirements to write checks?
The commitment we've made, and we're a responsible operator. We've done this thing responsibly. Think about what we've done. We've said we're going to transition this thing to warm care and maintenance while we look for a buyer. So really, there's a nice commitment. We've also committed to keep the workforce, the full workforce, local workforce, on the books for six months. So at the end of the day, we don't want to be penny-wise, pound-foolish here. We've got our reputation to protect as well. Now, Steve can talk a little bit on the numbers, but we want to do this the right way. It's not going to be massively material within Glencore. Our reputation is, in fact, more material. So we'll do it the right way. There are some numbers.
I don't know how much detail Steve wants to go into that, but we're going to do this the right way. So it's not just write a check and run. We do this thing properly.
Jason, can't be specific on numbers because I mean, we're still working through sort of budgets, and there's a partner involved there and sort of multiple stakeholders. But ultimately, it would be a pathway, clearly, towards getting to a level that is much smaller than any if there was longer-term Care and Maintenance. Of course, if there's another buyer and they step in, fine. That would be an elegant solution for all concerned. It would be certainly less expensive than continuing to operate it. And we'll do the right thing by workforce, by environment, by contractors, and everyone who's working there.
I think the key thing is.
Steps down.
I think Steve's point's right. The key point is it will be less expensive than continuing to operate.
Just one other one, if I could. You'd said that you were going to stop buying Russian aluminum, I think, as we go into next year. Is that right? Where do we stand with sourcing Russian products for your trading business? And how do you think that evolves over the next couple of years?
Our policy on Russian material hasn't changed. We have an existing contract with Rusal, which is a volume contract which runs out over time. Once that volume is fully delivered, that's when the contract ends. Our Russian policy is clear is that provided that material or the counterpart is not sanctioned, we are required to in fact, legally, we're required to continue to lift that material for contracts that existed pre the Ukraine-Russian war. We also said we'll not enter any new Russian contracts for any new Russian material unless directed by governments. And we haven't. That contract remains, and we'll continue to perform under that contract as we're required to do until the end of the contract.
So just in the context of that, you're talking quite a bit about aluminum. Your aluminum flow is about to get a whole lot less. So how do you think about that?
Well, once the contract comes to an end, whenever that may be, it will get less. And there's the rest of the world market that we can trade in. But at the moment, that flow still comes because we're required to. And that contract still goes until the end of that volume.
Morning, Ian Rossouw from Barclays. Just a question. Obviously, over the last year, you've talked about the potential synergies between Collahuasi and QB2. Has there been any progress since it seems like the partners are now more aligned speaking to each other?
Yeah. Look, I mean, Jonathan and I have discussed it. Duncan and I have discussed it. And I don't want to speak on their behalf, clearly, but everybody is aligned that there are material synergies to capture across those two operations. There's a piece of work to be done around how one captures that and how one divvies up the spoils. But all I can say is everybody is aligned. I mean, remember, it's not only Duncan, and it's not only Jonathan. We also have the Chilean government as a partner with Teck in QB2. They are Japanese partners across both operations. So we need to be considerate of all partners. And there's many, many people at the table here. But the general consensus and view across the major partners is there's synergies to be captured. Let's get on with it.
I mean, what needs to happen though in terms of is just time to work through that?
Yeah. It's complex. It's complex. As I said, because you've got different partners on all different sides, you need to be sure that all partners are comfortable. We've got to work out exactly what those synergies are. We know broad, big picture, and we did some work on it anyway as part of the Teck proposed transaction during the course of last year. There's a little bit more certainty one wants to get around that and how it would work. There's obviously tax issues, structuring issues, and how you ultimately divide up that path. So this is just a process that one has to go through. But I don't think I haven't heard from any of the partners that nobody's interested in sort of banking or trying to capture those billions of dollars of synergies.
Thanks. Then just on the you mentioned it briefly earlier about the Mopani restructuring and getting some of that proceeds back. Is that still being negotiated, or can you share some of the details?
Look, the negotiation is largely between ZCCM and the buyer. ZCCM did put out a, I think it was a sort of preliminary press release a little while back which put out some of the details of what that transaction looks like. And there, give or take a few changes here and there, about what it would look like. It's largely between ZCCM and the buyer. We're obviously involved given the debt that we have. And there will be cash flow that comes back to us sort of in line with what was already put out there.
Thanks. Maybe just one more, Steve. You showed attributable EBITDA for EVR. Is that how you will report it, or is that just for this slide?
We actually may consolidate it. So we may bring in 100%. But for the purposes of a cash flow analysis, I didn't want to be disingenuous and be throwing higher numbers out there and getting any confusion. So it was all done attributable. Ultimately, it's likely to be consolidated.
Thank you.
Hi, Dominic.
Morning, Dominic from JPMorgan. I just wanted to push you again on the comments about being nimble and the slides that Gary, you talked to at the end about copper growth. Obviously, there's some more creative and more optimistic M&A options available in the market at the moment. Do you see a scenario where a coal demerger is the less value accretive option for Glencore versus things that you might see over the next two years? Or is it something that you're going to be led by shareholders?
We'll be led by shareholders.
Alain?
Thanks. Morning. Just back on Koniambo, I guess one of the factors that'll come into play is rehabilitation provisions and potentially if that's a benchmark for divestment payments. So could you just remind us where we sit on that? And then second question on coal, the coal price outlook. You've articulated a very bullish case for thermal coal. Could you provide a bit more color on the next couple of years and how you see that playing out versus the LNG relationship? Are we going to move to a structurally higher ratio versus LNG potentially because of the supply?
Yeah. I'll let Steve take the Koniambo rehab question. I'll just answer that quickly. Look, it's no secret, and the world knows there's a significant amount of LNG coming to the market from 2026 onwards. You've got the Qataris bringing on their new production, more production coming out of the U.S. So yes, a lot of LNG coming. Where we see the predominant amount of that LNG going, a lot will go into China and will, in fact, displace domestic Chinese production. That's where we see a lot of that going. Now, you'll always have that trade-off between LNG and coal, of course, but you've got a growing demand for energy, growing demand for fossil fuels to meet that energy demand.
And the Chinese, where they will play the economics and the way they set their price for domestic coal because they don't want to run they don't want prices too high for power prices, and they don't want coal prices too low that their mines run at a loss, that they will ultimately start to replace domestic coal with a lot of that LNG. As we play generally into other parts of the market, the higher quality coal. And that's where we see, of course, a little bit of downside from that, but not material, maybe $5 or $10 that potentially brings things down. But that also could displace Indonesian exports, which would then shut because they compete on the lower quality with Chinese domestic coal. So yes, there's more LNG coming into the market, but ultimately, the world needs the power.
The world needs the fossil fuels. We think the Chinese domestic production will be the first reactor to that extra LNG.
I think in terms of K&S, it's a bit premature to start talking about sort of rehab and that like. I mean, it's gone into warm care and maintenance. Clearly, there's sort of tremendous sort of energy and overall, I feel, sort of momentum around seeing if there's a sort of finding another partner. So there is a process. You have the local partner. French State, of course, is very interested in the overall future profile industrial activities within the sites. There's been a lot of money that's been spent on that site, whether it's whether there's some repurposing, whether there's ship berths. I mean, these things could be clearly used for the long term in terms of infrastructure. There's the mining. The resource is clearly there. There is value. There's a whole range of activities that could be done across that site for many, many decades to come.
Anything around rehab and obligations and the likes is highly premature.
Matt?
Hi. Thanks. Matt Greene from Goldman Sachs. Just on MARA, what's your—there's a lot of study, a lot of expense here over the next few years. Has the scope of this project changed relative to some of the prior studies that have been completed by the previous owners? And I appreciate your comments and not wanting to bring this on until the market's ready. But from an approvals or permitting standpoint, when do you think MARA could be shovel-ready?
I mean, in terms of the project scope, it hasn't changed materially. I mean, just a little bit more work done, but the project scope hasn't changed materially. I don't like the word shovel-ready. I prefer shovel-worthy. And it'll be shovel-worthy when the price is right. So that's when we'll bring it on.
Thanks. And then just Steve, on the marketing guidance, you mentioned the elevated rates impacting. The $3 billion you've guided to this year, have you taken a stance on rate cuts, or is that based on where we stand today?
That would be where we stand today. But a rate cut of itself would be neutral to the underlying cash flow. So a rate cut, then if you take $100 million off that, take $100 million off the interest line. So it's sort of neutral from the cash flow.
Sorry, I'll just squeeze one more in. Just on the CapEx guidance for copper, a lot of stripping and upgrading equipment. Would you say there's been an underspend in this division, or are you looking to better capitalize this division with the EVR cash flow?
No, I don't know about an underspend. It's just the waves of the sort of development life of asset plans. They sort of go through waves. You go into different sections. You access new areas. You get your permits. You expand. So it's a cycle that would be for one year or two in copper. It's probably been a below-average cycle over the last 5-6 years across the portfolio. Now you go through a bit higher over the next two, and then you settle into a longer-term low range. So it's just pure you just take the long-term mine plans on these things.
Alain?
Thank you. The first question is for Steve. Can you remind us of the cash inflows that we should be expecting in 2024 in addition to the normal course of the business such as Bunge payment, Mopani, and so on? And as an extension to this question, in a scenario where you had the $5 billion way earlier in the two-year timeframe you provided, should we expect a return of the buybacks?
Certainly, yes on buybacks. I mean, as soon as it's five, it's job done. Notwithstanding timing of any sort of separation, you're at the sort of threshold there. So hopefully, yes. So other than, yes, you've got the $1 billion sort of Viterra proceeds. You'll have some Mopani proceeds. And they spoke about elements of upfront, which is the lion's share of what we are discussing, maybe a few that have a longer tail or exposure installment. You've got some residuals of our previous M&A completion. So on the MAC side, as I said, we've already banked $75 million. You've got some more to go on that through even when we sold the Chad oil business, there's still some sort of deferred consideration on that.
It's not billions of dollars, but there is a few hundred million across some of these non-operational areas that I suspect is not in any of your models. But yeah, so it'll come through.
Okay. And the Volcan sale process, what are the stumbling blocks of that process? And do you have any visibility on timelines?
I mean, there's no stumbling blocks. It's just a process. I mean, you know how these processes take. Obviously, market conditions also dictate sort of the appetite for buyers to transact at the right on the right terms and conditions. Us as well, we want to transact on the right terms and conditions. So this is not something that, again, fire sale, and we just want to shovel it out the door. We want to be responsible. We want to do it properly. There's certain conditions that we need to be met for us to do that. So we will do it as fast or as slow that's necessary to do a transaction that's right for our company.
Sri?
Thanks. Sri from RBC. My question is on working capital. In 2022, there was $14 billion working capital, and $4 billion was released in 2023. With marketing earnings normalizing, coal and gas markets coming down, how should we think about working capital for the first half of this year? Thank you.
Yeah. As I said when I sort of went through the release of the $2.8 billion last year, there still is some capacity and some working capital that is still embedded within the balance sheet that could return in the right conditions and the right economics. That number that you first raised, there was sort of $5 billion in the marketing working capital, and sort of $2.8 billion of that has sort of come down. So I would say it's not yet in neutral. There still is some elevated non-RMI working capital that could come back and would come back, frankly, even if we were to go towards middle to low end of those ranges. Some of it is price sort of correlation. Some of it is just voluntary deployment of working capital where we can take a sort of margin from optimizing it within our books.
I mean, there was a particular counterpart that we in the last sort of 12-18 months, where there was sort of exposure of a sort of $250 amount in receivables where commercial and marketing flows, good security, very healthy returns. We could have chosen not to do it, but I'd take 20% IRRs on some of that sort of business. So that's sort of something that we know is going to be repaid in this next 12-18 months, something like that. There is a little bit of that.
Sorry.
All right. Tony Robson, Global Mining Research. Sorry, stole the mic. met coal, we had a lot of discussions on thermal. What's met coal like this year? I see big price discounts, U.S. West Coast to Queensland. Is that telling us something we should be concerned about in the market? Thank you.
Steelmaking coal still looks good. I mean, you saw the graphs that I put up there on the demand side. It looks healthy. We don't see demand erosion or demand destruction in any material shape or form in the short, medium, or longer term, to be quite honest. It's one of those commodities that is just, A, not really substitutable. There may be, yes, the talk of the green steel and all that sort of stuff. But when you get into this scale, the economics, the produce green hydrogen, produce ammonia, transport it, all those sorts of things, electric arc furnaces, ultimately, the worldview is that steelmaking coal is here to stay. And the need for it and the need for steel is critical for decarbonization. So the demand side, it looks very strong.
The supply side, we will play our share, and we'll supply our material into the market and hopefully feed that growing demand. Like any commodity, you have supply-demand, but prices are still very healthy. You've got spot prices at $310-$315 a ton FOB Australia for the high-quality material. Long term, the forwards are still very strong as well. So sort of if you just look at the forward markets and what consensus is, it looks very good for steelmaking coal.
Three quick questions. Firstly, on the marketing business, has the Red Sea disruptions kind of impacted your marketing business at all, especially in context of the so-called geographic arbitrage you have between prices in different geographies?
I mean, I don't like to think about it that way because obviously, our biggest concern is about the well-being of any vessels and the crew on any vessels that we have on the water. Naturally, as a byproduct of some sort of geopolitical tension, it does create opportunities. I don't sit here and try and identify and say, "Yes, we made a whole lot of money out of these things." Our main concern is that. There has been disruptions. There has been issues. There has been diversions. You've got more sailing rates. You've got higher freights and certain categories of freight, not really dry bulk, but more container. That has created certain arbitrage opportunities, which we have capitalized on, but that's not something that I pay that much attention for. I'm more concerned that through these disruptions, our assets and our people are safe.
And then just on MARA again, have you had any discussions with the new Argentinian dispensation, and would there be any scenario where they could offer some tax incentives for you to pull forward the project other than copper price?
I mean, we have. I think I mentioned earlier in Davos, Ann Edwards and I met with the chief of staff. We met with the minister of mines. We met with a whole bunch of the Argentine administration and really a breath of fresh air. They are smart. They are focused. They are dedicated. They know what's good for the country. They've got plans in place. They're implementing them. Very, very encouraging. And I'm not going to get into specific details of what we discussed. Steve mentioned and I mentioned we're going to go down there next month. And obviously, for us, the driver obviously, we need a risk-adjusted return. The driver will be the returns. We want to see the returns. The other thing that we've got to remember, Ephrem, is that we've got an existing copper business of close to 1 million tons.
You don't want to bring tons on an existing project that in itself is not a bad IRR but maybe cannibalizes your existing business. So we've got to take into account the entire portfolio. So ultimately, whatever time it takes for us to bring on MARA has got to be an incremental IRR improvement for our business, not just an isolated project that looks good, but perhaps it has a flow and impact into some of our other projects.
But some of those stability factors will be very relevant ultimately in sanctioning projects because historically, Argentina's had a checkered history clearly in terms of getting money out and stability and the like. So that sort of overall sort of construct of committing long-term capital. And they've said as much. I mean, in fact, they're sort of extending arms and all that sort of stuff. But ultimately, I don't know if it's tax or whatever else. For us, it's about stability, and you're making decisions based on these goalposts, and you can count on those goalposts being where they are for 20 years. I mean, that's the key.
Okay. With that, I think we'll draw to a close. Gary, concluding remarks?
I mean, I think without repeating the entire presentation, our portfolio is very well positioned. Energy demands of today are being met through our steam coal business, and we'll continue to run that down responsibly with elevated margins on our steam coal business. We have the right commodities for the energy transition and new commodities well, a growing part of new commodities. We already have coking coal in our or steelmaking coal within our portfolio, but a large, long-life, best-in-class, tier-one steelmaking coal business coming into our portfolio along with our best-in-class world-class marketing business, our recycling business we set up for many years of great shareholder returns.
Thank you.