Come to all over here in the room, and also welcome to all of you over there who are attending this over the web. We've titled this "Moving into Our Second Century." As you saw from the film, we did spend quite some time last year celebrating our first century. It's a century that was full of all kinds of achievements, but of course we look forward to a second century with even more achievements to do, and we feel that we have a very strong basis to do that, and that's what we're going to spend time for the next couple of hours to go through and try to show that to you all, what we're doing going forward.
Before we move into that, I would like to pause a little bit about the fact that we are in Bergen and in Norway, and a little bit pause and reflect around probably the greatest cultural personality of Bergen, for sure. If you go around to the city here, you will see his name on all kinds of places and concert halls and other things, but maybe one of Norway's most influential cultural persons. I'm talking about Edvard Grieg, the composer of the 19th century, second half of the 19th century, composer who was composing lots of romantic music linked with the folkloristic traditions of Western Norway.
By the way, yesterday we had the formal inauguration of the Odda expansion, and we were in Lofthus, in a place quite close to Odda, where he actually had a cabin that he spent some time writing some of the music in there as well. He is important, and just to set this setting, he also has a very famous quote where he said, "As a composer's journey is a lifelong pursuit of perfection, always striving to create more beautiful and impactful pieces." I would like to take that as a starting point also regarding Boliden, where we have also always, even though we have been around for one hundred years, for us, we have a lifelong, and in terms of a company, a life can be very long. We have a lifelong journey to always have a pursuit of perfection to get even better going forward.
Now we are in very uncertain times, and just to get a sense of it, where we're standing, we're standing today with a situation where we have actually a war in Europe still going on. We have developments in U.S. trade policies that we do not know where they're going to end, if they will ever end, and where they're going to go. We have developments in China, we have developments in the role of India and other parts of the Global South. We have financial outlooks that are quite difficult to get your arms around. What's going to happen to interest rates, exchange rates, and the gold price in this? There are technical developments that are also going very fast. What is exactly the demand of nickel going to be going forward compared to other battery chemicals, battery chemistries that we can work with?
What's going to happen on a political level, especially in the E.U., since that is closest to us? What is going to happen with the new commission and a new parliament in place? What's going to happen with the transition from a Green Deal to a Clean Industrial Deal? Of course, we should never forget what we maybe spoke more about two years ago or even last year around climate change. Climate change is for real and has lots of related challenges that come with it. Now, Boliden in this situation has a very strong position today. First of all, we are producing the metals that everybody needs for their own transition, both in terms of energy transition and also in terms of the general economic transition away from a carbon society.
We also, and just to make very clear, and we've had that as a strategy for many years, we do have a precious bi-metal production that we have never streamed away. We have full exposure to our bi-metals, which has also proven to be good in the later time, and as we move into the details of this program, Stefan will talk about how that's impacting one of the oldest operations that we have, the Boliden Area operation, and the higher gold price and what it does to it. We have a strong business model. We have a strong business model that has a good integration between the smelting and the mining business. We have the balance between the different base metals, the base metals, and the precious metals.
We are in stable jurisdictions where we feel relatively good about being there, and in the end of the day, we are producing metals in a part of the world, that is Europe, that is in a big import situation and a big need, and whatever is going to be playing out on the kind of global field is probably not going to be bad for somebody who produces something that everybody needs that is a big deficit in the area where it's being produced. On top of that, we're doing all this with very strong ESG credentials, probably one of the strongest ones that you can find in our industry. I dare to say today that we are the European champion in terms of base metals. We are Europe's largest base metals company.
We've been there for a while, and of course, with the acquisitions coming with the two new mines, we will be even clearer that we are the base metal champion of Europe. Now, going forward, it looks potentially even better. We will talk today about the fact that we are commissioning our major investments, so we have large investments that will have gone from cash outlays into cash generation. We will move from times in Aitik with very low grades and also in Kevitsa into times where we have better grades, and we will talk more about that today as well. We are welcoming two new operations into our family that we also feel very good about and good about what we're going to develop around them.
We're not going to dwell too much about that today, but we will have more reasons to come back later regarding that to you. We also have, and we'll spend quite a lot of time with that today, talk about the portfolio of future growth projects that we do have, how we look at them, how we envision them, how we categorize them, and we'll talk quite a lot about Garpenberg and the possibility to potentially have an expansion in Garpenberg pretty soon. We'll also talk a little bit about the cement, or not that they're called cement, the cementitious product that we're looking into producing in our smelters, and we'll come back to that during the day today.
I have with me today the full management team of Boliden, and you're going to listen to them, not so much to me about what is going to be done going forward. We have a full agenda. We'll cover all of Boliden's part, and with this, I would like to welcome our Head of Sustainability and People, Åsa, please go ahead.
Thank you very much, Mikael, and good afternoon. I'm really happy to be here to talk to you about sustainability at Boliden. In a world of uncertainties, as Mikael just talked about, we know that some parts of the market think sustainability is less important. That is not the case for us in Boliden. Sustainability really underpins our business performance, and we are very proud to be so well positioned among the sustainability leaders in the global industry, and that is a position that we intend to keep. You heard? You know, safety always comes first. That, together with the fact that we have been building a very strong safety culture during many years, is the reason why we have been fatality-free for 17 years, which is very unique in this sector.
Protecting people's life and health is integrated in our culture and in our values, creating the right safety behaviors amongst employees and also contractors. Our long history of focusing on the high-risk areas, where we continuously remove people from dangerous areas, has also made us one of the most automated operations within this industry. Keeping our very skilled workforce safe and healthy helps us avoid disturbances in the operations, increase our productivity, and also it makes us much more attractive for the talents we need and the ability to retain them. Another strategic area for us is the climate, and I would say it's twofold. Of course, as you know and Mikael talked about, our metals are necessary for the climate transition, but we're also focusing on reducing our own climate impact to be the most climate-efficient metal producer.
Let's take a look at our climate progress towards the climate targets, which we launched at the CMD 2022. We are on track, minus 13% for scope one and two. We have had a temporary increase related to the dam reinforcement project in Aitik, but the plans are integrated in our budgets and we are keeping the timeline there. For scope three, you can see plus 18%. That is related to increased purchase of goods and services and capital goods related to our major investment projects in Odda and also in Rönnskär. Same thing here, we have roadmaps integrated in our business plans and we are to reach the target here as well, minus 30%.
When bringing Somincor and Zinkgruvan into the Boliden family, we will recalculate the baselines, we will revalidate them with SBTi, the Science Based Targets initiative, and we intend to keep the target levels for all scopes. Let's take a look at the climate roadmap. We have done a lot, as you can see here, and we have many new initiatives coming up. Electrification is one of the main contributors, and here I just want to highlight one of the initiatives that you have in the table, Kristineberg Trolley. The expansion project in Kristineberg, where the ambition is to have the world's first fossil-free mine, is underway, and the trolley line, 750 meters underground, is in place, and all the activities to make it fully electrified are ongoing.
Here I would like to quote one of the visitors. We have had so many visitors from the global industry coming to Kristineberg to look at this project, and I met with the project leader last week and she told me that one of them said that if someone would succeed with a project like this, we knew it would be Boliden. That is good to hear from our peers in the industry. Stefan will talk more about this. Other significant initiatives in the roadmap are energy efficiency and switching to renewables in our smelters' operations, and of course for the scope three, engagement programs with our suppliers and customers. Remember, the more initiatives we complete, the more low-carbon products we produce, and the more premiums we will get. Daniel will talk about that.
We have our operations in quite sensitive areas for nature and biodiversity, and that is why we also have targets and roadmaps integrated in our business plans to ensure increased biodiversity. We are expecting biodiversity issues to be even more important going forward as environmental legislation is getting more and more strict. Being good at biodiversity and being part of those leading in this area, as we are, is a very good position for us for getting the permits we need to be able to continue mining and smelting for at least another century. This leads us into permits. Permits in this sector are, as you know, a challenge, and for those with strong ESG performance, it will be better. For those without, it will be very difficult, maybe impossible.
We have, due to a lot of efforts in the ESG area, been quite successful when it comes to permit processes, and as you see here, 14 permits granted since CMD 2022. There are also some major permits ongoing here, and we have good confidence when it comes to the outcome of these, and these are mainly related to expansions at several sites. A related topic that has been high on the agenda in the whole global sector is GISTM. Many of you know what that means and stands for, and for those of you who are not that familiar with it, it is the Global Industry Standard on Tailings Management. Throughout the year, all mine sites have made significant progress towards full conformance and compliance with the standard, which is a requirement.
Kevitsa and Aitik, which are classified with the highest level of consequence in the event of a dam failure, reached full conformance in 2024. The rest of our mine sites are to be compliant with this standard by 5th of August this year, according to the requirements related to the standard. Talking about standards, this is something that we welcome very much, and I assume that you do as well. It's about a new common global consolidated mining standard, and coming from a world of numerous different standards, which makes it almost impossible to compare companies and performance when it comes to sustainability and ESG-related data, and also requires a huge amount of non-value-added reporting and administration. We have been involved through our membership in ICMM to develop such a global common consolidated standard. We're almost there. It sets high bar expectations when it comes to responsible mining.
We are welcoming it. We are ready to start the assurance process, and we are confident that we will be able to make it according to all the performance criteria that are in place there. Finally, to summarize, our sustainability is definitely supporting business performance. We work with sustainability because we have to. It's our license to operate. It's because we are convinced that it strengthens our competitiveness on the metals market, in the talent market, and in the finance market, and also because it is the right thing to do. Pushing towards our vision is something we strongly believe in. It's important for our role in society and something that we are very proud of.
Just a short example before I hand over to the next speaker is, you can see in the picture here are concrete blocks that Daniel will talk more about, but that is how we are now to create waste-free smelting operations. With that, Daniel, I hand over to you.
Thank you very much, Åsa.
Thank you. Here you go.
Thank you. Good. Nice to be here and see so many curious people to look at our Odda unit tomorrow here. Running a smelter is very much about raw material management, at least if you want to create profitability. A smelter's profitability is really built up on the TCs, the free metals, the premiums on the metal themselves, and of course then the byproducts that we have, for instance, as sulfuric acid. The raw material market has been somewhat volatile during the last years here, and I would like to open up a little bit talking to you about how we have been navigating this volatility. You all know that the TCs have fallen drastically, and that we see also in this couple of graphs. On the top graph, we see the TC development.
The blue line is the spot TC, and the brownish line is then the benchmark that we have had during the last years. Actually, the benchmark for 2025 has been a little bit unclear. There are some benchmark prices set on just about $21, and there are some set on $25. It is somewhere there and in that region, but it is anyway falling quite a lot from last year's levels. The same thing on the zinc side here. We see, however, that the spot TCs are actually increasing. They are starting to gather up a little bit, and this is, we believe, due to quite a lot of new volume coming out on the market. There are, first of all, our own Tara mine that is back on track and delivering raw materials, but there are also volumes coming from Kipushi.
The Russian Ozyornoye mine is up and running. Those volumes are not coming to Europe, but they are going to China, and that means that there are less need of volumes going to China in our view of this. For Boliden's point of view, we are actually not running a spot market philosophy. We are focusing a lot on going on the benchmark, and for 2025, all our volumes for the smelting are actually based on the benchmark. That means that we are not really that low, even if we see also that the benchmark levels are, of course, falling down here. Looking at the market in general then about the metals that we are providing, we see that there is a stable demand both on the metals themselves but also on the sulfur products like our sulfuric acid.
The premiums on these metal and sulfur products are also on a good and attractive level in our mind. Then thinking about the low TCs, even the benchmark are falling. We can see actually that the free metals revenue is supporting this drop, so it is going in the other direction, and of course the free metals are an important part for us and our business. Looking then at our smelters, in Boliden we have five good smelters, two of them located in Finland, two in Sweden, and one in Norway. We can see in the result generation from last year that the smelters in Finland, the Kokkola and Harjavalta smelter, have been able to run with open throttle without any bigger challenges, and the performance has been thereafter. Very good result generation.
In Rönnskär, we had the devastating fire a couple of years ago when we lost the tankhouse, so the refining capacity is not there anymore, and that is an important part for a copper smelter of generating the free metals. I will come a little bit more into details regarding the investment that we have now to rebuild the tankhouse in Rönnskär, but in this picture on the left one, you see that the investment for Rönnskär is actually moving the cash margin position significantly for that unit when we get back on track. The last, or the one to the right, the blue graph is really showing what is going to happen in Odda when we are fully up and running with that unit. We are creating a state-of-the-art zinc smelter and really moving the cash margin position significantly to the left in the graph here.
We see that Kokkola is pretty close in this graph to Odda, and this is, we are not, or I am not completely agreeing about the position of Kokkola since we have actually been delivering a lot of free metals, and the result generation has been just fantastic from the Kokkola smelter during last year. Odda, Odda is an important thing, investment, and we are in Norway, and we are going to travel to, the majority of us travel to Odda tonight, and we see the smelter tomorrow. I would like to open up a little bit what is happening and where we are in that investment. In the headline, we are saying that the commissioning has started, commenced in Odda, and we have done a lot in the site, and it starts from the quay where we are finished completely with the infrastructure.
There are new cranes, new transport equipment, assaying and sample taking is state-of-the-art at the site. We have already started up the tankhouse. The tankhouse is also state-of-the-art equipment with fully automated equipment, a fantastic place for operators to work. It's light, bright, and good work atmosphere. After the tankhouse, the zinc goes into the foundry. What we have created in Odda is really something state-of-the-art with a fully automated robotised foundry, which is also a pleasure for an engineer to look at, and I'm pretty sure that it will be a pleasure also for analysts and other interested people to look at. This is what we are going to look at tomorrow.
For the moment, we are in hot commissioning in the leaching, and the leaching is where we are going to come out with this new product, which is diminishing the waste at the site, turning waste into profit. I will come back a little bit more into details regarding that. We are delayed somewhat in this project, and we see still that we have a bottleneck in the roast and acid plant, and here we are now getting into cold commissioning in this second quarter, and we are getting into hot commissioning in the third quarter and fully ramping up during the fourth quarter to be able to run really full speed ahead from 2026, but ramping up to full capacity during the second half of 2025.
With that in mind, looking at the profitability and the calculations regarding this project, I would like to get into the details here. We say that the EBITDA generation will be strong. We are calculating with our long-term planning prices, and with that, we will generate an annual EBITDA of EUR 150 million. Bearing in mind that we are now, for the moment, in a tougher raw material situation, our planning shows that we will, however, go or maybe diminish from EUR 150 million to maybe EUR 135 million with some 10% down due to these actual raw material prices. This investment is really based on the impact of economy of scale. We are actually generating a lot of like 150,000 tons more of zinc, but the manning is not increasing by more than around 50 people.
We are enjoying today a very competitive long-term hydropower agreement, and the third part here is the Odda Leach product that we will come out with. This is actually where we get now the possibility of choosing a total different recipe for our smelter, which is then allowing us to get into more precious metal containing raw materials since we get an equipment to really recover these metals. The investment itself for the smelter will be turned into state-of-the-art. We will be generating about 1,000 tons of zinc per person and year. That gives state-of-the-art productivity, which we do not see anywhere else. A little bit about this Odda Leach product that we are calling it. This is a Leach product we estimate to get about 40,000 tons per year.
This means that we don't need to put the same amount of volumes into the mounting caverns where we are storing waste today, and we are allowed to capture the precious metals, and what we calculate with on general terms is about 10,000 tons of lead coming out, 50 tons of silver, and about 400 kilograms of gold. These are not exact figures, but these are based then on some average recipe, not really optimized for maybe super gold containing raw materials or anything like that. If we would not have done this investment, we would have been forced to invest in maintenance, in other equipment that would have needed significant maintenance investments. It's like the water treatment plant and other critical equipment for such a smelter. Good. This is something very, very important for us.
Another very, very important investment is, of course, the replacement of the tankhouse in our Rönnskär smelter. This tankhouse was destroyed on the 13th of June, 2023. It was a 400-meter-long building, completely open, where the actual refining was done. We are replacing this now with a state-of-the-art tankhouse with the same capacity, actually, and we have a total investment level of 4.8 billion to replace this. In the picture here, you see that the project is well underway, and we are calculating to have the building complete or tight in the beginning of April. The investment, or when we are back on track with the refining capacity, we will be able to come back to generating about SEK 1 billion per year, and that is mainly built up on the free metals.
Now, since we have changed from delivering cathodes to the market to anodes, we have also been forced to choose a little bit different kind of raw materials because we have not been able to generate the free metals when lacking the capacity of the tankhouse. At the same time that we are now investing in a state-of-the-art tankhouse, we are also looking into the cost level of the site. We have launched a plan to reduce the cost level with about 500 million Cu-runner per year, and that together with an optimized manning and also then an optimized way of running the smelter. We are applying or investing and building a new, as I say here, fit-for-purpose central control room that will be also state-of-the-art, where the whole complete copper production line will be controlled from one single control room in a modern and efficient way.
To come back with the refining capacity allows us also to get a larger part of these low-carbon metals that we have been launching during the years. We have launched the low-carbon copper, the low-carbon zinc, and also lead and nickel during the last year. Copper has a general carbon content of 1.5 tons per ton of copper. The zinc has about 1 ton of CO2 per ton of zinc, and these are kind of the main parts. Also, if mentioning just the nickel, where we have about 5 tons of CO2 per ton of nickel, comparing to the Indonesian volumes that are coming out, which can have a carbon dioxide content of about 70. What we are delivering and producing in Europe, and specifically in Boliden, has a complete different level.
On top, we have also been able to generate a premium from sales of these volumes. Looking into budgets and plans forward, we see that these premiums will actually be doubled going forward. We have a target of being fully on the low-carbon as average by 2030 when implementing the Science-Based Targets Initiative and delivering on that. We are really looking forward to that. The blue star here, that is actually low-carbon acid. That was a part that we see that we are very competitive and very decarbonized also on the acid side. Therefore, we are, of course, going to continue launching new products. Åsa already mentioned something about it. This is a project that we have been talking about for soon one year, I think. A product that we want to call Cementum.
This is a secondary cementitious material that we have been developing based on the iron silicates, which are a rest product from copper smelting. This is also the first step towards waste-free smelting. We see a significant reduction of the climate impact of concrete. This secondary cementitious material has a carbon footprint about 95% lower than ordinary Portland cement. We have been also having the possibility of proving and testing this product internally in our mines, and this is also something that benefits the whole carbon footprint of the product since the carbon footprint is really based very much on what comes out of the mine. If decarbonizing the mine, which we are doing with automation and electrification, but also cement is used in a large content in our mines.
This is a product that has proven to be very good, and we have today also cooperations with other companies around us. For instance, last week we launched a coordination or a cooperation with Skanska, and earlier we have also Thomas Concrete Group testing these products together with us. Less carbon dioxide, but not only that. This is also a way to lift up the recoveries and recoveries of metal from our waste, and earnings will, of course, be lifted due to this. We are planning now an industrial plant for about 300,000 tons of cement, and we expect an investment decision for this investment in the latter part of this year. By that, I would like to conclude my part here, and these are not champagne glasses in the picture here. This is liquid metal. It's zinc, but we feel very happy about what we have achieved.
We are happy about our metal portfolio. We are based our industry based on European metals, European raw materials. We are refining it in Europe, and the final metal is also destined for Europe. We are increasing our low-carbon part here, and we are also generating a financial uplift based on this. With the Cementum, we are reaching actually the first steps towards waste-free smelting, and this is something that I'm proud of. I'm proud of what we have generated before, and I'm also proud of what we have in the pipeline going forward from the Boliden smelters' point of view. By that, I hand over to Olof.
Thank you, Daniel. Ladies and gentlemen, I'm happy to say that we're right on time, right on time for the important Fika pause for our short break. We will start exactly 16:45 again.
We will have presentations by our President in Mines, Stefan Romedahl. We will have a presentation by our CFO, Håkan Gabrielsson, and we will also have a Q&A session, which we will start here in the room. I'd also like to remind you listeners on the web that it's possible to post questions. You can do that already now. They will emerge on my iPad here, and we will also, of course, try to prioritize your questions. Once again, please be back here at 16:45 sharp. Thank you.
Welcome back, everybody. I hope the break has been good for everybody. I'm delighted to be here talking about the mines. It was a few years since last CMD I was presenting the mines. Söder Foundation for Tomorrow and Beyond.
This is really about how we are working with our exploration, as well as how we are operating our mines. Let's start talking about the mineral resource and reserves. To be able to create value in the R&R, it's all based on our strategy in exploration. We are exploring near-mine exploration to generate value here and now. We have the long-term exploration in greenfield exploration with a project coming on stream. The way we are working with this is how we actually create value in a mining company. How are our short-term strategy concerning exploration? We are focusing on Nautanen, close to Aitik. That will help the production in Aitik going forward. Quite sure about that. We are accelerating the exploration towards depth in Garpenberg. I will come back to that later on. We have quite a few good targets around the Boliden Area.
In Finland, we are focusing on high-potential zinc systems, as well as early-stage copper and nickel targets. Here we also have joint ventures. In Ireland, we are focusing on the surroundings around Tara Deep. I will come back to that as well. In Canada, we have a joint venture in Duke, as well as some new startups. The Canadian exploration is about 8% of our budget 2025. The budget, by the way, is around approximately SEK 1 billion per year for exploration. That feeds into the R&R. You will see the numbers that we were launched in the beginning of February. It is good to see that we have good reserves in the Boliden area. I will describe later on why this is just the beginning. It will increase even more. Garpenberg is astonishing numbers, 32 years in reserve life.
We have resources, and then we have potentials. I will come back to that also going forward. In Tara, we have six years. The history in Tara is that we normally could, when we mine out one year, we can add some more time for the lifelengths in Tara. Hopefully, we will be able to do that going forward as well. In Kevitsa, we have been able to take back from resources into reserves, basically based on the new mine plan, where we can mine out stage four and fit it into the tailing facility with a new centerline design of the tailing facility. That allows us a 10-year lifetime. This is the base for how to create value in mining. This is something that we are good at. Going into the business units, starting with Boliden.
This is where it all started 100 years ago. Today, the Boliden Area is three mines supporting one mill. Just look at the numbers from last year: SEK 2.4 billion in operating profit. I think that's quite good for a 100-year-old mine. We have strong operational performance. That's the reason why we have these numbers, as well as, of course, good grades and a high gold price. As Åsa showed before, we have started the production in Revliden, this fossil-free mine that we are starting up. Revliden is a mineralization ore body in Kristineberg. This is great to see that it's now up in production. The ramp and the trolley ramp in the access to Revliden, five-six kilometers. We'll be done with the battery trucks. You can see one on the picture.
We will have deliveries of three more: one at the end of this month and two at the beginning of next month. Then we are there. Then we are there with production. The full project will be delivered during H2 now, H1 this year. It is a good project. It meets the time frame, and it meets the functionality. It is not just Revliden where we are putting investments. We also had investment in the sand recycling in the Boliden mill. This will enable us to prolong the lifelengths of the Boliden area even further because this is a solution for the TMF going forward. With the sand recycling project and dewatering facility at Boliden, we will be able to produce paste for the mining in the mines. That will help the mines going forward.
It's a very good thing for them, as well as we are not pouring out the tailings towards the tailings pond. That will sort out that problem. These facilities will be in full production in 2027. The potential around the Boliden Area is great. I mean, around Kristineberg, we have a lot of targets that look very promising. We will be able to come in with more resources and reserves around Kristineberg, as well as reinstalling towards depth. We have other projects around. Last time I was standing in front of you, I was talking about Strömfoss. This project is now going back to exploration for further evaluation. Still looks promising in the area. Today, I will talk about Eldträsk as a gold deposit very close to Boliden. It's a gold-rich deposit. It's close to surface, so this will be open pits.
The numbers look really good. This is something that we are working with for the moment. This will strengthen the Boliden Area going forward. Quite sure about that. Going from one strong player to an even stronger player in Garpenberg, they grow stronger for each day. Just to remind you of the numbers last year: SEK 3.7 billion in operating profit and record production. This record production, 3.5 million, is what we have done basically by focusing on the mining and continuous improvements. This is really good now. I had a midterm potential of 4.5 million ton. Last week, we put in the application to change the existing permit from 3.5 million ton- 4.5 million ton. Yesterday, the board took a decision to invest in the paste plant, 750 million ton.
This will open up the possibilities to go to this 4.5 million ton. A really, really good investment. The ramp-up time from 2026 to 2030, during this period of time, we need some additional investments as well, around SEK 1,800 million, SEK 800 million that is needed to get up to these 4.5 million ton. Why the paste plant? What's that good for? This is actually part of the mining method. The paste itself allows us to have a stable mine. From a geotechnical point of view, it's very important. It also allows us to mine out more ore and leave less pillars for stability reasons. It's good from that aspect. It's also good because we don't really need to pour out that much tailings to the tailing pond, meaning that we are reducing the CapEx for the tailings facility.
You have other things that also are good with this paste because it is sand from tailing sand mixed with a binder and water, and you take it through a pipe system down in the mine and fill up open voids. This binder absorbs all the water, meaning that you need less pumping in the mine. That saves cost as well. You have a lot of plus with this paste plant. It will enable this 4.5 million ton. By the way, on the picture, you can see an electrical battery loader. That is a part of the electrification roadmap that Garpenberg has. We are working, as Åsa mentioned, with this as well. We will be less CO2 going forward in all things we do. That is a good thing.
If the midterm potential is 4.5, and that's really good numbers around that, what about the long term? Here is a quite busy slide. I know that. Let's try to talk you through what you actually see on the picture. This is a long section over Garpenberg. You see the mineralization ore bodies. What's in red and orange, that's the reserves in Garpenberg, the 32 years. What you see in blue is the resources. In gray, you see what we have mined out so far in Garpenberg. You see two brown lines. This is the position from the hoisting system that we have today. With a capacity of 3 million ton, and we have, with adjustment, put it up close to 3.5 million ton. The capacity of that shaft is too small for the 4.5.
We will ramp up some more to reach the 4.5. You see a yellow line saying potential shaft down to 1,700 meters. That shaft will be crucial for Garpenberg going forward. Why do we not just build it then? It will take five years to build it. As we speak, we are below 1,600 meters with the ramp. What is the ramp for? To come to the position 1,700 meters, of course. It is also to get out with good drilling position for the exploration. As I mentioned in the beginning, exploration is everything when it comes to value creating in mining long term. When we get out in good positions, then we have this high potential, the circles, especially the circles you can see on the right lower part, three circles. Jaspines, Huvudmalmen, and Lappberget. I have high potentials here.
We know that the mineralization exists. It's just that we can't really drill it up in a good way from the positions that we have. That is why it's so urgent to get there. This is outside the R&R. This is outside the R&R. It's not even included in the picture that you saw with 32 and the long life. This is something that we're aiming for. That is why I'm quite sure that this $4.5 million project is so good for Garpenberg as an intermediate step. Putting the shaft in place, five years it will take. We can increase the production in Garpenberg even further. When we are getting the decision for the new shaft, we don't know that, but hopefully quite soon from now, it will take five years.
That shaft we need, even if we stay on 4.5 million ton, which I doubt that, but anyhow. The potential is absolutely fantastic around Garpenberg. Going over to Tara. Yeah, I'm really happy that Tara is up and producing again. The standstill, care maintenance for one and a half year was very difficult for very many people that are involved in Tara. I'm happy that we are up producing again. The new plan that we have is that we actually have to act differently than we did before. That is why we have had a quite slow pace when it comes to restart Tara. We did produce two boats with the concentrate last year, in the end of last year. The new plan, it's about 1.8 million ton this year, next year.
In 2028, we will be at 2.2 million ton with a crew of 405 employees, meaning that we come down to a cash cost around $1.00 per pound. The 3D seismic targets that we are drilling on now, we will be able to get a good indication if we have more or not around Tara Deep. That answer we will have around 2027. At that time, we will be able to look into how should we actually handle Tara Deep going forward. If we hit something, then we have a potential to grow the 27 million ton in resource. That may be a big project. If we do not find anything, we will go for mining out Tara Deep with the existing infrastructure that we have. That decision becomes somewhere around 2027. Going over to the open pits, starting with the Kevitsa.
Here you can see a trolley truck going up the in-pit trolley ramp. The truck here has double the speed compared to the one to the left. It is good productivity in that, as well as reducing the CO2. What I think is very good with Kevitsa is that we have been stable at this 9.5 million ton production. We have been at the permit level around 10, and we will stay there. The low grade year this year will be followed by a year when we are starting to pick up grades again in 2026 onwards. This goes for both copper and nickel. As I mentioned before, I think that the plan to mine out stage four without building a new tailings facility is really good because that gives us some time to evaluate stage five. It is still an interesting project.
We will look into the nickel price, of course, long term, but also how E.U. is looking at critical raw materials and nickel. That will be different things going into that evaluation of a possible stage five. It is still there. Now to Aitik. That, by the way, is an autonomous truck just close to the crusher in Aitik, coming from Luleå. Aitik, my friends, have delivered three key projects in the last two, three years. These key projects have been very important for Aitik. I start with a big one, the SEK 5 billion investment in reconstruction of the tailing pond. We have done this. We have delivered it in time, in the cost frame, and to functionality. You think, SEK 5 billion for that, why? I must say that we have had really open and fruitful discussions with authority from the beginning.
The project team working with the dam project have been very creative, flexible to find solutions. We were very close to have a standstill with Aitik during this process. We have been able to keep it open, keep it in production, and the fellows and the team in Aitik have done a tremendous job. Fantastic job. Everybody that has been involved in this project should be really proud because I'm proud of them. Coming into the next project, Likavara. Here we had a delay of a year, basically based on the permitting process. When we actually get the permit, we have delivered it on time, on cost, and on functionality. Likavara is very important for Aitik. We have a 0.26% in average grade. It will stand for 20% of the production in Aitik. That's an important delivery now for Aitik going forward.
The AHS truck system is actually used now in Likevara to transport all the ore from Likevara to the cross-show in Aitik, so over three kilometers distance. This project has also been delivered during the last two years. That project is very important when we come into a time when we have years when we have high waste production coming up, to be able to remain on a high productivity. Do we have teasing problems? Yes, we have, of course. I think in general, the AHS problem has been good. I do think that Komatsu, together with us, have potential to do this even more productive. We are working on that. Now when I'm talking about these three key projects, big ones, I come into Aitik production situation. During this time, the management team in Aitik have to produce and run a normal operation.
It is a huge thing to run these three projects at the same time that you should deliver as they should in Aitik. They have done it good. I was very delighted to see the figures for November and December because Aitik hit the production record in overall mined tons or end waste. Really good achievement. We come into 2025 in Q1, and you have seen it. This was a bit of a hiccup, of course. We are coming in, starting up a new pushback, south-east corner in Aitik. We knew since before that we have direct in this area, so that is not anything new. We were a bit surprised anyhow at the consequences in the mill. In the graph in the middle here now, you can see the energy consumption per ton of milled ore.
The last two dots on the line are January and February. It's just going through the roof, meaning that the throughput is going down because the grindability is very low because of this diorite. That's not good. What are we doing? We are investigating this, of course, and we will come up with solutions or actions that mitigate a really bad consequence of this going forward. Here we are working on this now. At the same time, when you're starting up a pushback, you always have difficulties. The first layers, the first benches, and that we have in our calculations is you have a problem with drilling, you have a problem with blasting, and that makes the productivity go down. That's always like that when you start from surface.
We have another thing also when the ore is coming up to the surface, you have the oxidation. Even this hit us in the first benches in this pushback. The oxidation is more than we expected and has a bigger consequence on the recovery than we expected. This will disappear when we are going down in the pushback. In Q2, it will improve, and then it will disappear by time. The oxidation is not a really big problem going forward in the long term. This means that in Aitik, we estimate that we are coming close to 40 million ton. Going forward now, the grades will improve during 2026 and onwards. I am really delighted to say that we can see the light in the tunnel.
We have known this low grade period for quite a while before it comes, so this is nothing surprise for us. Now we are starting to get closer to the end of it. That will be really good for Aitik. We have this high waste that we need to move year on year going forward also. We have been mining more ore than waste for quite a period of time, but now we're coming into a period of time where we have to move more waste than ore. It is a one-to-one mine when it comes to that part. What do we have? Do we have anything else? I mentioned something that we can actually get more value into Aitik going forward to make them deliver more copper concentrate.
Hopefully, in the beginning of the 2030s, we will be able to open up a new underground satellite mine. We got a mining concession now, and we're working on the profitability as well as an application for environmental application. That is work that we are doing now. We still have good results from the exploration. We can see that this is open in several directions still. This is something that is growing, and hopefully we will be able to put this in operation in the early 2030s. That will help us out when it comes to the financial situation in Aitik. To summarize this now, solid foundation for tomorrow and beyond. I want you to take with you the way we are working with exploration to increase the value by the R&R. I will say here we are good. We are really good at this.
This is a foundation for a mining company. I think also that we should bring with you the strong profitability that Boliden Area gives, as well as Garpenberg for the moment. I cannot see that that should disappear. Of course, the possibilities that we have in Garpenberg. I am really delighted that we now go for 4.5 million ton when we get the permit. Beyond 4.5 is looking fantastic. This is extraordinary. Of course, I am delighted to get two new mines into our operations. Zinkgruvan that I know quite well since before and Somincor. I think their experience, what they are doing together with our experience, here we can make each other better. I am sure that those will contribute to our success going forward.
And talking about success, here come Håkan Gabrielsson, the next speaker.
[Foreign language] . Good afternoon, everybody. It's a pleasure to be here at the Live Capital Markets Day. It's been a while. I am delighted to go into a little bit more on the financial side. Short story, I feel very good about the financial position in Boliden. I think you've seen from Stefan and Daniel's presentations that we're in good shape in both business areas. We have exciting opportunities. On top of that, we have a strong balance sheet and we have robust financing in place to support us in the future. Let me start on the first slide with a few numbers on our performance. In 2024, we delivered a return on capital employed of 17.6%, close to 18%, and that is above our 10-year average.
If we move from returns on historical investments to the current CapEx projects that are ongoing, I'd just like to give a brief update on where we stand with the current spend. We have guided for SEK 14 billion. That's not a change compared to what we said earlier, and it's in line with what we said about SEK 29 billion for the two years of 2024 and 2025 together. Out of that, SEK 5 billion are strategic projects, and those are the ones that I've mentioned below. That's down from SEK 8 billion last year, so it's a reduction. That is the Aitik dam that was completed on time and on budget towards the end of last year. It's the Kristineberg expansion in Rävliden, and the Odda expansion that are due to be completed this year.
It's the Rönnskär tankhouse and the tailings sand recycling in Boliden Area that are both on track, performing well, and due for completion in 2026. I'll come back to a bit more about potential strategic projects going forward, but I'll come back to that on the next slide. Mine sustaining CapEx, that is stripping in our open-pit mines. It's underground development in our underground mines. It's raising of dams. That is at SEK 5.5 billion this year. It's our expected level. We had SEK 3.7 billion last year. And this is also in line with what we guided for. Looking forward, you know, beyond 2025, what we will see, as Stefan alluded to, is that Aitik needs to increase the pace of stripping going forward. So Aitik will increase a bit.
At the same time, we see a lower stripping in the next few years in Kevitsa, as long as we stick to the Pushback 5 mining plan. The balance between those two, I would expect slightly up for 2026 and onwards. The other is a mix of different projects. We've been stable at about SEK 3.5 billion the last couple of years, and that is ESG projects, that is debottlenecking, and that is replacement investments. There, I think, you know, it will vary a bit between years. Stefan referred to SEK 800 million in debottlenecking that will come in over the next year. Another thing I'd like to highlight is that we will move in Aitik with the mining closer to where we have the old industrial areas. We will take some spend for that in order to develop the mine.
Maybe a bit up on that one as well. All in all, this is where we stand. Going back then to what could be new strategic projects in addition to the one that Stefan talked about in Gap and Bay, we decided to unveil a little bit about our thinking on future projects. See this as a menu of projects that we could decide upon in the next few years. I want to highlight before I go into the details that it's indicative. In many cases, we haven't decided the size of the expansion or the length of the extension. Of course, the CapEx and the timing might vary. Everything here is pending a successful business case, permits, various studies. I think that probably not all of them will be done.
This is the menu, as I said, the opportunities and the options that we like to have. I also like to just point that the scale is logarithmic, so we can visualize the size differences in a better way. The timing reflects the date of decision, the expected time for decision. The spend will, of course, come in later years. What we have been doing the last two years is that we've been working hard to delay the decisions of a Pushback 5 in Kevitsa and a Tara Deep expansion without losing the options. At the same time, given the very successful resource and resources statement in Gap and Bay, we've tried to push that closer in time because of the potentially very good value in that. However, the first one we're looking for a decision in is the cement project that Daniel talked about.
Already in 2026, we are aiming for the first steps in a Gap and Bay expansion beyond 4.5. Stefan talked about some different components in there. In order to reach beyond 4.5 long term, we need several things. We need a shaft, and that's what we're going to need anyway sometime in the life of mine, but it will be earlier if we're going to expand. We will need more dam capacity. Also, that will need some time in the life of the mine, but we will need it earlier if we expand. We will need an expansion in the mill. The first step is probably the shaft, and that could be up for decision in 2026. Of course, it will be an extended period of spend if we decide to go along that route, and it's all pending permits and so on.
Elträsken auton and Stefan talked about interesting opportunities. The next one I'd like to say a few words about is Kevitsa Pushback 5. This is also an investment where I think 80% of the spend is likely to be stripping, waste rock removal, and the remainder is new dam capacity. It will be a number of years stripping to access the ore. The spend profile will be quite distributed over a number of years. We should also say that it is a bit of a challenging situation right now to do this calculation with the current low nickel prices. There are also some discussions on mining taxes in Finland that do not help. Fundamentally, it's an interesting project, and we're working towards a good solution on that.
Further out in time, we've got the big lava project where we're in a mining concession phase and a potential Tara Deep expansion. I'm sure we'll talk about these projects a lot over the coming months or years, so we'll come back to them in several meetings, but it's a strong portfolio of interesting projects. Moving over to a few words about financing, firstly regarding the financing of the acquired mines, Somincor and Zinkgruvan. We're repeating the message that we've given earlier here. We have a bridge loan in place, which will provide upfront cash consideration to complete acquisition. We are always, in this case and always, dimensioning our financing to be able to handle a downturn scenario should that occur.
We intend to finance the bridge, to refinance the bridge loan through 50% long-term debt, 25% to share issue, and 25% by cancellation of the dividend that has been proposed to buy the board. We expect to share issue sometime during the first half of this year, all depending on market conditions. Funding a big acquisition is, of course, better if you have a good starting point, and we have that in place. We have a robust balance sheet. We ended the year at a gearing of 16%, net debt of SEK 10.7 billion, so strong numbers, and a payment capacity of SEK 16 billion. The payment capacity does not include the bridge loan that we have in place for completion of the acquisition. Good shape. I'm going to continue with some nitty-gritty details that are valuable for those trying to understand our company in depth and to model it.
The first one of those is the long-term planning prices. For us, this is an important tool to manage the company. In our planning, we use it for R&R statements, mine planning, investment decisions, etc. Daniel referred to them on a couple of places in his presentation. The SEK 150 million EBITDA for the Odda expansion are based on these numbers, and so is the SEK 1 billion of additional EBITDA in Rönnskär. We update this price tag annually, and this one was updated close to a year ago, and it's the one that has been used in the current R&R statement. As you can see, if you run through the numbers and compare them to the current spot levels, we are conservative on currencies, U.S. dollar, and we are conservative on precious metals.
On the other hand, the spot TCs are a bit lower than what we're looking at over the cycle. All in all, being a bit on the conservative side in the price tag that you put in to the investment decisions is similar; it's one component in the good return that we saw on the first slide. The second area I'd like to highlight is our sensitivity information. We publish this quarterly, and this is, in short, a sensitivity in that if you have a 10% movement in one metal price, currency or similar, then you can see what the EBIT impact on the company is. For additional transparency, we're now providing the breakdown for mines and smelters, and the total column is exactly what we published in the last quarterly report. Now, a couple of observations here.
Of course, U.S. dollar is an important sensitivity because basically all our revenues are nominated in dollars. What is important to keep in mind is that we typically see a negative correlation between metal prices and dollars. I do not think you should add all of these sensitivities and assume that they all go in the same direction, up or down at the same time, because normally you would see some negative correlations there. Secondly, looking at the smelters column, you can see that we have a significant sensitivity to treatment charges. That is important to smelters. It comes as no surprise. It is also clear that the sensitivity to metals is more important. For us, metal prices through free metals in the smelting side are more important than the treatment charges. I think that is a sign of strength, especially looking at the current gold and silver prices.
Before wrapping up, just some words on the near-term development in Q1 and what's happening with the insurance proceeds connected to the Rönnskär fire. Starting Q1, we sent a press release on a lower throughput and recoveries in Aitik. Stefan talked about that, so that has been communicated. We are confirming our full-year grade guidances in all of the mines. I do want to highlight, though, that we expect the Q1 grades in Garpenberg and Boliden Area to be a bit below the annual average, and then we'll catch up in the later part of the year. In the last quarterly report, we also talked about strikes in Finland, and we talked about somewhere just above SEK 100 million in negative impact on the Q1 results. I'm happy to say that we are not seeing any additional impact of strikes in this quarter, so that's it.
There is also a central agreement in place for the key unions in Finland. Something that I always say when we talk about Q1, we have seasonality in cash flow. Q4 is good working capital-wise, and Q1 is typically a quarter where we build some working capital and expect that also this time. Regarding insurance proceeds, we recognized just over SEK 3.3 billion on the P&L last year based on confirmations from insurance companies. We still have SEK 65 million outstanding that is being discussed. The cash flow of that is that we received SEK 1 billion last year, so that's in our accounts. We're expecting to receive SEK 2 billion this year, and that is connected to the speed of the Rönnskär tankhouse project, but SEK 2 billion is our best estimate. The remaining part, a fairly small number, is expected in the earlier parts of 2026.
I want to conclude by saying that we have a dividend policy and we have financial targets that have served us very well for a long period. These have been around for 15 years or more and have been crucial in the development of Boliden to the company we are today. Based on shareholder feedback, the board has proposed to cancel the dividend this year, but the commitment around this policy is very, very strong, and we'll be back to that for next year and the years going forward. Thank you. With that, Olof, I think it's time for some Q&A, right?
Thank you very much, Håkan. Ladies and gentlemen, that opens up our 2025 Q&A session. My idea is to try to moderate all the questions we will have here from the audience with the ones that we have on the web.
Before we start, I have a question which goes then to Mikael Staffas, and it comes here from all over the place on the web. That is, why have you renamed Neves-Corvo to Somincor?
I think the simple answer is we have not renamed anything. If you go to Portugal, it will be called Somincor. The history of it is, and it's sometimes called Neves and Corvo. The Neves and Corvo are two ore bodies in the mine that were the two first ones. They are basically mined out. Somincor was always the name of the total mine, and now they're mining in other ore bodies. We have actually, even though we do not talk too much to them, had a discussion with the local management of what they want to be called, and they want to be called Somincor.
Excellent.
Ladies and gentlemen, I'm happy to say that we have a lot of questions on the web. We would really appreciate it if you could have one question at a time here to start with from the audience here. Also, please remember to state your name and company so that the people on the web can hear that. We start over here.
Yes, thanks for the CMD. It's Johannes Ericson at DNB. I have a question for Daniel, or perhaps all of you, but you were quite thorough here in your guidance on the Odda impact. I think it was SEK 150 million on planning prices, but slightly lower on spot pricing. You also said it's a SEK 1 billion uplift expected from Rönnskär. I assume that's planning prices.
Could you sort of indicate what it would mean with spot prices, given that I saw your gold planning prices close to half of what the spot is?
Difficult to say. I mean, maybe I missed also to say it was clearly shown in the pictures, however, that the startup of this tankhouse will be in the summer of the second half of 2026. If looking into spot prices then, I don't know what the spot prices will be, and therefore we think that it's better to look at our planning prices.
Sure. Sure. I mean, gold must be a big lever if you would assume spot, yeah.
Looking then at the TCs, and as Håkan also mentioned, that free metals is actually compensating clearly on the TCs.
Lowering TC and looking at what we have generated during the last years on free metals, it is really becoming a bigger cake, a bigger part of the cake, the free metals for us, and more important all the time. We are really good at recovering the free metals.
Thanks.
Excellent. We have a question on the left-hand side there, please.
Hello, Ioannis Masvoulas from Morgan Stanley. Thank you very much for the presentation. Just one question on Gap and Bay and the potential expansion north of 4.5 million tons. That's very open-ended, while Håkan shows a slide on CapEx, which is somewhere in the order of SEK 7 billion-SEK 10 billion. What does that money buy you in terms of actual volume uplift beyond the 4.5? Just to get some perspective.
Should I take that?
Yes, please.
Okay.
I think that the shaft itself is needed for the 4.5 million ton going forward as well. Beyond the 4.5 will be a really good project as well. I think that the CapEx that we put in for shaft over the five-year period, during that period, we will go into more detail about how it should look like when it comes to the mill and so on. The exact number around that will come later on. First, a decision about the shaft.
I think it's fair to say that if we build another shaft, the hoisting capacity will be doubled, right?
Yeah, it will be a higher capacity of that shaft than we have today.
Compared to the 3.5 that we have right now, if you add 3 for a new shaft, something like that in throughput.
But again, very early days. I think that you're into the calculations more, so I'll do the guessing then, but just directionally.
You're good at guessing. And we also love to see these questions.
We have questions over there, please.
All right. Thanks, Olav. It's Christian Kopfer from Handelsbanken. A question for Stefan. You presented grade outlooks for both Kevitsa and Aitik for the next five, six years or so. However, to put those thick lines into the Excel model, it's a bit hard, to be honest. But I understand the uncertainty. Is it fair to say that the base case is pretty much in the middle, and then you have the uncertainty surrounding that?
Yeah, I think you should look at it like that. And we don't want to be just exact on this. That's why we have this sickle line.
As I said, I'm really delightful that we now can see the tonner we have coming through this low grade period, and that will help Aitik as well as Kevitsa out quite good going forward.
Yeah, that's fair enough. Thanks.
Okay, I think we actually have to mix a little bit from the web here, please, as well. Hold on to your questions, please. This question is for Åsa. It's from Josefine Johansson. She works for Handelsbanken Fonder. It goes like this. The European Commission has recently stated that it will propose to extend the carbon border adjustment mechanism to more sectors. What is Boliden's view on this? If the Commission were to include copper, for example, how could that possibly impact Boliden?
Thank you for a good question. What is most important and what we want to achieve is, of course, a level playing field.
We work for and promote cleaner practices. It is, of course, also important. We work to get copper into the list. That would be good for us. I would also like to highlight the importance of having nickel on the list. I mean, considering the situation around nickel around the world, that would make a major impact.
Got you. I also have a question from the web for Mr. Peltonen. It is from Patrick Jones. He works for JP Morgan. Do you believe your competitors will close down capacity if zinc treatment charges will be as low as around $60 per ton, as is rumored currently?
What an interesting question. This is speculation, of course, and we cannot see how others are kind of reacting to this. We look at our own situation and we see that we will survive.
We believe that we have a saying internally that maybe the capacity in Europe could decrease a little bit. Long-term, it is maybe only three zinc smelters left in Europe. Two of them will for sure be ours.
We had a question over there. Please. Yes. There we go. Sorry, I did not see that someone was ready here, but that takes only two seconds more. We will be back to you, Amos.
Sorry, Amos. Liam Fitzpatrick from Deutsche Bank. Probably a question for Håkan, and I know you have heard versions of this in the past, but it is around CapEx levels going forward. I think, if I remember rightly, you said if you did nothing, then 2025 CapEx would be around SEK 12 billion. It has ended up being now about SEK 14 billion. Same question for 2026.
If you do not push ahead with any new approvals, what sort of CapEx level should we be looking at? Then linked to that, when you consider what you do want to do and the acquisition assets, what is a realistic level? Should it be SEK 14 billion, SEK 15 billion moving forward? Thank you.
I think you have heard the response in a few different versions. I am not going to quote a number because, but put it like this. If you look at the strategic projects, that bucket, looking into next year, what is left of the ones that were on my list there, the Rönnskär and the tailing sand, it is about SEK 3.5 billion. Then Stefan has some more in the Gap and Bay expansion. That is about SEK 3.5 billion-SEK 4 billion somewhere for next year for the strategic bucket.
I talked about perhaps slight increases in the other two, the replacement CapEx and the other ones and the stripping. That should give you roughly where we would stand for 2026 if we do not take any new decisions or some of the cases change.
Excellent. That was time for Amos. I'm sorry about that. Do not take it personal.
No worries. Thank you. Amos Fletcher from Barclays. Question for Stefan. On Aitik, I just wanted to ask, we have had quite a long time since the 45 million ton project was completed. You have never actually produced 45 million tons on a rolling 12-month basis. Can you commit to a timeline when that will be delivered?
I think that from a long-term perspective, absolutely, we have the target 45 million ton.
As it is happening now with this big project and the challenges we have in the normal production, we have not been able to reach it. We still have that target, of course. I am really in a position that I will not say to you what year it will be now, because what I mentioned with the direct also that we need to have a control of that, and we will come up with a solution to mitigate the consequences of it. Here it is a bit of a challenge for us, absolutely.
It is not that often that our CEO does not get the chance to talk that much. I am happy for you, Mikael. I actually have a question from the web. It is from Jason Fairclough. He works for Bank of America . It goes like this.
How do you think about the balance between mining and smelting? Are your decisions to invest in mines completely independent in terms of the smelters and vice versa, or do you consider synergies?
Thank you, Jason. I think the answer to the question is that, the first part of the answer is that we are agnostic. We are letting all the projects that we can see fly. The ones that fly the highest, they are the ones, and the ones who have the best returns are the ones that we do, irrespective of in which business area. There are other things that come into play. Things like when we have certain resources that cannot easily be deployed to another business area, we need to have enough resources, human resources, and so on to work through this.
Towards the end, yes, we might look at some kind of synergies, but that is a relatively small part. I've gotten the question here in the break, which is linked to this, that for a long time, Boliden has been pushing quite a lot of smelter investments, which is true. We've done big investments in Harjavalta. We then did the big investment in Odda, and then we were forced to do the big investment with the tankhouse in Rönnskär. When you look at the kind of portfolio now, it looks like there's lots of mining there right now, and that's true. That's what you have. Maybe the pendulum is swinging a little bit.
Having said that, even though we have this plan right now, maybe in two years or so, we will have some other great smelter investment that will make it up into this plan that you just saw Håkan show. I suppose the answer is really there is not really a great plan to kind of focus on one business area versus the others. It is the best products that we will push forward.
Thank you. We have a question in the front here.
Hi, Dan Major, UBS. You gave us some details on the expected ramp-up of the Odda smelter expansion, and I guess reiterated the EBITDA contribution guidance, etc. Can you give us any steer on whether there will be a positive EBITDA contribution during the ramp-up of the smelter through the remainder of this year?
Should we assume all else equal, EUR 135 million contribution in 2026 if the terms remain similar to what you base that guidance on?
I think we should focus on 2026. There will be for sure directly when we get up and running some generation, but how that will affect, I do not have a clear answer on that.
2026, we should embed the full positive contribution.
Absolutely. That is how I see it, and we should be for sure up and fully running with this expansion by then.
Great. Thanks.
I actually have a question for you, Håkan, as well from the web. It comes from Richard Hatch. He works for Berenberg. It is, given that the cement decision is first in line, cannot you be a bit more specific on it? Clarify the CapEx spend, please.
We were about as clear as we could be on the slide. I mean, there's a reason why we do not take the decision now, and we take it in probably in six months or something like that. The work is ongoing, and there are a number of uncertainties in that plan. We will have to come back to that.
Okay. Here in the front, please.
Yeah, hi, it's Adrian Gilani here at ABG. A question for Daniel from my side. You threw out a figure of annual cost reductions in Rönnskär of SEK 500 million. As I understood that, it sounded like that was on top of the SEK 1 billion from the new tankhouse in EBITDA increase. Can you just clarify if that's the case? Also, where specifically are you finding an extra half a billion?
That is on top since the $1 billion is really only based on the free metals and the generation of the tankhouse itself. The rest is a cost issue. It's personnel related. We came out the other week with an announcement of reducing manning. On top of that, it is general also fixed and variable costs that we are focusing on.
Excellent. Please.
Hi, good afternoon. Alon Olsha, Bloomberg Intelligence. Given that zinc treatment charges, the benchmark terms probably are set to plummet, what is the break-even TC at Odda now, if you consider free metal at your long-term price assumptions versus the plant prior to the expansion?
I think that you can work that out yourself backwards by the nice cash contribution slide that was shown.
You can see a difference, and you can see that if you work backwards from there, the new Odda will be able to handle quite significantly negative TCs and still be positive from a cash point of view.
Negative decline in TCs versus negative TCs.
Even negative TC terms would still be generating positive cash flow.
Got it. Thank you.
With the present precious metal terms.
We fly back to the web, and it is Krishan Agarwal at Citigroup, and it is a question for Mr. Romedahl. Regarding the Tara Deep possible expansion, has the economics of mine life extension for that project changed post the Tara restart?
No, we still have the same strategy. We will run the existing operation in the way that I explained before. Hopefully, we will be able to extend the lifelines of existing Tara, and then we will bridge it into the Tara Deep.
It is no change in the strategy there.
Thank you. We are in the middle there. Please.
Ola Södermark, Kepler Chevreux. If you can give some more color on the mid-term Garpenberg expansion. I mean, it is a close to 30% volume expansion up to 4.5 million tons. How should we look at it in the first coming years with the initial investment you are doing of SEK 800 million?
I think that you should look at it like this. We will start ramping up ore so that will increase the cost a bit compared to the low cost that we have with just hoisting. We will gradually go to a higher level of production. In 2030, we are up at 4.5. It will be gradually up.
Doing that, we will do the bottlenecking in the mill as well as buying in some new machinery to really get there as well as infrastructure in the mine. It will be gradually that spend of SEK 800 million.
Thank you very much. Also a question on the pending acquisition of Zinkgruvan and Somincor Neves-Corvo. Have you had any communication or contact with authorities, and when can we expect the answer from the clearance authorities?
Maybe that's something that we have not been able to, we haven't said so clearly yet. Initially, we said sometime during the summer, it's going to happen sooner. We've been in contact. We have already gotten five out of the six authorities' approval that we need. We are missing one, which is from the EU.
We've had contacts, and we now believe that we will get that clearance sometime in April rather than the summer. It is moving on faster than we thought.
You do not have any setbacks regarding that you are going to be a dominant zinc player in Europe?
No, there is an old ruling that has been done that concentrate markets are not European, they are global. Thus, concentration in Europe does not matter.
Okay, thank you. That is very interesting.
We fly back to the web, and then it is Alan Spence. He works for BNP Paribas. It is a question for Mr. Peltonen. You had an unfortunate incident at Rönnskär two years ago with the fire. What are the key learnings here, and how will you manage the overall smelter business unit moving forward given that tough experience?
This is something that we are, of course, focusing on not only within smelters.
We are looking into the fire dangers all over the company. Now we have a very clear example in Odda when investing and building the new capacity coming there. We have a totally different setup with much more sprinkling and preventive work, working with the people and the equipment and in all possible ways that we can kind of mitigate the dangers of the fires.
We take another question from the web as we are there. They keep coming in here. It's for Håkan Gabrielsson. It's from Stefan Cederberg. He works for SE Banken Fonder. Have you hedged your currency exposure in the acquisition of Somincor and Zinkgruvan? Also, how will your currency exposure change going forward?
The answer to the first part is yes. The purchase price has been hedged into SEK, so that is done.
The currency exposure, all the revenues is still dollars. We will get the cost structure addition from Somincor, which is then euros. We will have the cost structure addition from Zinkgruvan that is SEK. The balance is perhaps a bit more on the euro side since that is a bigger mine. All in all, that is what is happening.
Thank you. We had a question over here. Thank you.
Yeah, thanks. Will Dalby from Berenberg. Yeah, just really wanting to ask about the Boliden Area in terms of reserves there. Obviously, you have sort of had an 8-10 year reserve life there for sort of the past decade, so continually replenishing, which is great to see. Just kind of wanted your insight as to, is there a point that you see that you cannot continue doing that?
Obviously, based on your knowledge of those assets and the resources there, do we sort of start to see those reserves inevitably starting to taper down over the sort of coming years? That'd be very helpful. Thank you.
I think that it will not vanish now. We have a good potential going forward to continue the way that we have been operating in the Boliden area. Actually, we are stronger now when it comes to the reserve resources than we have been for historical time, I would say. This is looking really promising going forward. We do have some projects around with quite a lot of penalty elements in it. This is a way if we can manage to handle those kind of mines, then it is opened up even more. That we are working on, of course. It is not going down.
The reason why we don't have longer lifelines in the Boliden Area is the way the mineralization looks like. It's normally very narrow and it's steep dipping, meaning that it's very difficult to drill it up in the amount that you need to do to get 15 years or further. It will cost more than you get back from a drilling point of view. That's important that you get in the right position to drill it. Here we know that we will be able to add on more to the resource and the reserves going forward.
That's a very helpful explanation. Just very quickly, one more, just on Neves-Corvo and Zinkgruvan acquisition. Just wondering if you can give a steer on whether you're expecting those assets to sort of be self-sufficient from a CapEx perspective.
Can they fund themselves from their own cash flows, or do you think they will require some contribution from the broader group from a CapEx perspective? Thank you.
Håkan, you can take that one, but I can say, without saying anything, I can say that we do not envision any major CapEx program in either Zinkgruvan nor Neves-Corvo in the sense that they need to do something drastical. Yes, there will be ongoing replacement. Yes, there will be ongoing developments and so on. Given that these two, in any kind of normal situations, are quite good cash generative, we do not really foresee that we will have to put any more cash into it. It is more about getting cash back to cover the purchase price.
Ladies and gentlemen, we have time for two more questions here from the audience. I see we have a question over here.
Before we take those here from the audience, we have a final question from the web. It is for Mr. Peltonen, and it is from Richard Hatch. He works for Berenberg Bank. On slide two in your presentation, there is no indication of where 2025 zinc TCs will actually end up. What is your view of the 2025 zinc TC, please?
That is also, I think, a little bit of speculation. The TCs will for sure drop from today's levels, that we can agree upon. We saw also on the copper side that it is a little bit doubtful, not a clear way of where the copper TC is either. There are some agreements on the Chinese market and some on the Japanese market. Normally, the zinc TC is to be set here in the spring, March, April time. We should soon be there.
Thank you.
Actually, I got a sign here that we only have time for one more question. Over there, please.
Thanks very much. Ioannis Masvoulas from Morgan Stanley again. Question for Stefan. Going back to Aitik, you have presented the mid-term grade outlook, which is very helpful. I get a sense that the throughput challenges around the diorite ore could persist into next year. Could you perhaps comment on how you feel the throughput develops from the 40 million tons this year into 2026?
I can't give you a number, but we do have this, what do you call it, critical size crushers in Aitik to crush down the critical fraction in the mill to increase the production. If we come into a situation where it's building up in the mill, we will put in actions to take out that material. That will be done close from now.
That's one of the actions. Of course, we're looking into blending it with other kinds of material from other pushbacks. We have an action list around this. How much we will be able to mitigate the difficulties with the diorite, I really can't give you now. Sorry about that.
Ladies and gentlemen, that concludes our Q&A session. We will have some final words from our President and CEO, Mikael Staffas. Also, for those of you in the room, please stay tuned because I will be back with some practical arrangements for all our festivities for tonight. Mikael, the stage is yours.
Thank you, Olof. Thank all of you for staying with us for these two hours. I just wanted to quickly summarize from my point of view what I think is important to bring out of here. Olof spoke about sustainability to start with.
We feel that we have a very good sustainability base to work out from. You have seen that we are continuing to deliver on our climate promises. Daniel spoke from the smelter point of view around how the big projects are getting further on and how we are moving on and we are getting closer to a finish around that. He also spoke about the cementitious product project and how interesting that one is. It is clearly an interesting one because if that one works, and I should remind everybody that this is an IP that we have ourselves. Boliden, sometimes we pride ourselves that we have no IP. We are just very good operators at other people's IP, and they own it. Here, we have through R&D gotten our own IP around how to transform slags into these kinds of products. It has worked very well on lab scale.
One reason why it takes some time to get this going is that you cannot go to a supplier and ask for a quote because there is no supplier that produces this kind of stuff. Nobody's ever done it. We need to do a much more fundamental feasibility study. That will take some time. We need to make sure both that the product that comes out works, that it goes into bridges, as it stands for 100 years and not 50 years. We also parallel need to figure out exactly what the CapEx and OpEx will be of running such a plant. After that, you got Stefan talking about the mines. Around that, I think the key issues are we are through the main points, we are through the worst of the grades in our two open pits.
They are all about to turn around and turn better. We are through the care and maintenance of Tara, and we're starting up, and that's also proving to be better. We have a whole set of options where we are playing around. We want to make sure that we keep the options alive, that we don't kill them, but some of them try to push them out. We have been very successful in pushing out without killing both the Tara Deep option and the Kevitsa Pushback 5 options because they are not right now on top of the kind of top of the charts in terms of returns. We rather have pushed forward the Garpenberg situation, which looks much better on a conceptual level. There is still lots of work to be done until we can go all around.
We have decided to take this step towards four and a half with the investment in the Paste facility that you also saw this morning. Håkan has finally gone through the finances, and you have seen around that. I just wanted to once again reiterate that the Lundin closing might be sooner, or it will be sooner than what we said initially. Exactly how soon, we do not know. The financing that we announced when we announced the acquisition in December still stands. With that, I would just like to finish off by going back to our dear friend, Mr. Berg and Mr. Grieg, around the way that he said that a composer's journey is a lifelong pursuit of perfection. I will just reiterate that Boliden's journey is also a lifelong and for a company, life is much longer, lifelong pursuit of perfection. We are moving towards that.
Thank you, everybody.