Ladies and gentlemen, I would like to welcome you to Boliden's Q3 2026 results presentation. My name is Olof Grenmark, and I am Head of Investor Relations. Today, we will have a presentation led by our President and CEO, Mikael Staffas, and our CFO, Håkan Gabrielsson. We will also have a Q&A session, which I will moderate, and we will start here in Stockholm. Mikael, welcome.
Thank you, Olof, and welcome to all of you here in Stockholm and everybody who is listening to this online. It is, of course, an especially pleasant day to come and visit you all. We have presented our quarter results, and it is the best quarter result ever, which always feels good to say. Of course, helped by the fact that we have very good prices and terms, but also from a very good production quarter in general.
Let us jump into the material. More easily said than done, and here it goes. The highlights, as I already pointed out, we have strong earnings of about SEK 4.9 billion. We have a solid performance in general across the mines. I am picking here specifically Somincor, which is doing very well, and also Kevitsa, which is doing well.
The ramp-up plan in Garpenberg is also going very much according to what we have said we are going to do, even though we are of course still much below where we were last year. We also have in our smelters, especially Harjavalta, a very strong quarter. I would say almost exceptional availability of the equipment in Harjavalta.
We also have a new record in Harjavalta in terms of nickel feed. The Odda smelter is moving on at a much better pace than it has in previous quarters. We have come up to an availability in the quarter about 50%, way up from the 17% in Q2. In the last month of the quarter in September, we had 70% availability, so the curve is clearly going in the right direction as of right now.
During the quarter, as you all know, we also announced that we are going to go ahead and acquire, first of all, the Votorantim stake in Nexa, and then after that, also continue with a broader offer for the minority shares. Looking at the financial performance, you can see here very clearly a big uptake around these ones.
We have the operating profit of SEK 4.9 billion. There is a little bit of planned maintenance in this quarter as well, although much less than in Q2. We have a positive cash flow. Håkan will come back in a little while and talk a little bit more about the details. We have the net debt to equity. The gearing is now down to 21% again, and CapEx at SEK 3.4 billion, right exactly how we guided and what we also had planned for. The key projects.
I'll start with the Rönnskär tankhouse because, as we have always said, we intended to start it up in Q4 of this year. Earlier today, we actually had power on in the first of three sections in Rönnskär. So the tankhouse is, as I'm speaking right now, already producing on that first section. The other two sections are intended to have the power on later during the quarter.
As we go into Q1, we should have a full pace of production. The Boliden Area Sand Recycling is working according to plan. The Rönnskär SCMentum is still very early days, but for ramp-up in the first half of 2029. The Garpenberg project, those who read Swedish news will know that we had the official start of the project with the ceremony for the first excavation for the new shaft the other day.
That one is on track as well, although it's very early days, but that looks good. The Odda expansion, the ramp-up is ongoing. The availability of the roaster is increasing. As I said before, we saw 50% on average for the full quarter, 70% in September. This is clearly moving in the right direction.
The mechanical issues that we had in the beginning linked not so much to the actual critical equipment, but linked to things like transports and other thing have now been cleared out to a large extent. On the ESG side, we did not have the best of quarters in terms of lost time injuries. There's also been a fatality during the quarter, or actually right after the quarter in early October. A very unfortunate event.
It's still a little bit unclear to us what really happened, also a little bit unclear whether it is a workplace-related fatality or whether it is a sickness fatality. Doesn't really matter. We've had a fatality. We're working around it, trying to figure out what really happened and how we can get better from that. The other long-term injuries also in the quarter was not brilliant.
We had a higher level than what we had last year, and we continue to work with these issues relentlessly. The sick leave, however, is going towards the right direction. We now had 4.0% in the quarter. That's around the level what we were before the pandemic. We have been on much higher levels, and you can say this is the first time we're back to pre-pandemic levels. The greenhouse gas emissions is going according to our plan.
Market development, I think that you all know that we have good prices and terms. You can see here that when the Boliden index, which is the red line here, has plateaued, but on a very high level compared to before, and just from 2021 we're at index 175, so 75% up for the mix of metals that we have.
The currencies are helping, although a little bit on less scale, but our currencies have also been helpful in this situation. I also must point out the sulfuric acid prices, which are also helping quite a lot in this situation. The prices for copper and zinc, I'm not going to do any detailed market analysis, but you can both see here that compared to the cost levels in the industry, we have high price levels. Most everybody in the industry makes money.
You can see that in the copper side, actually costs are going up, which could be an indication that the margins might get a little bit smaller going forward. This cost increase on the copper side has to do with diesel prices going up, also has to do with the sulfuric acid prices going up, which for many copper mines is a cost.
On the zinc side, also a good margin on this one and more of a flattish cost level development across the industry. If we then go to Boliden and look at our production, as I said earlier, we've had a good production. Aitik has a milled volume of 10.3 million tons, which is clearly better than last year. Also strong mine production when you add on the waste rock production, the stripping going on is very strong.
The copper grade is in line with previous quarter, higher than last year, but it is lower than we had indicated in the guidance, and we will reduce guidance for the copper grade for the whole year in Aitik based on this, but we will increase the guidance for throughput and for the year. Boliden Area, very stable operation, looks very good.
Garpenberg, yes, it's not a good thing that we don't have the Lappberget available, but given that situation, very good production in the quarter, producing according to the plan that we had internally and that we'd given to the market, slightly better grade than we had guided for. Kevitsa, a record volume. Very good. It's a mixed grade, but it's still a relatively good level. Somincor, very strong, particularly copper. We are very positively surprised by Somincor coming into the family.
Tara, a little bit lower than what we had liked to, but still within reason, and Zinkgruvan has stable operations. So mixing it all together, very good mine production. On the smelter side, let me take Harjavalta first, which is outstanding in the terms of equipment availability. It has had a very strong quarter in general, and it's a quarterly record in terms of feed on the nickel line.
Kokkola, also very strong production, which is clear that we also get better production than last quarter. Bergsöe, very strong production. Rönnskär has had a maintenance stop around that and also lower silver production due to a lack of availability of one of the silver furnaces that is now fixed, and so Q4, we're full speed also on the silver line. Odda, as I said, we've had the availability going up, which is much better than it was before.
We have, however, encountered somewhat of a difficulty on the old Odda roaster and the associated acid plant, which means that we have more planned maintenance going into the old roaster and the old acid plant in Q4, and we're also therefore guiding up for total effect from maintenance stops for smelters from SEK 450 million to SEK 500 million. With that, Håkan, go through the numbers, please.
Thank you, and good afternoon. As Mikael pointed out, a strong quarter. We are reporting an operating profit of SEK 4.9 billion, which is clearly up to the comparisons, and it is, in fact, the best quarter so far for this profit level. CapEx, SEK 3.4 billion, in line with guidance. We also, in this quarter, had SEK 219 million payout for acquisition activities.
That is the contingent consideration for the acquisition of Somincor and Zinkgruvan. These two newer assets have had a really good development, both in terms of operational development and also prices. As we have a profit-sharing in the contingent consideration, there is a payout going to the sellers. Free cash flow, SEK 1.1 billion. I will come back to that. Looking then per business area, as you can see both in the charts and in the table, there is a good development in both business areas.
Starting with mines, up to close to SEK 4 billion. Compared to Q2, mines are helped, of course, by the strong price development, but there is also a significant effect from Garpenberg producing in line with the guidance. Also good development in smelters, and there you have to remember that Q2 was, as usual, impacted by quite extensive planned maintenance.
Of course, smelters also has some help from prices. Moving into operating profit deviation, the EBIT bridge year-on-year, starting first on Q3 of this year compared to Q3 of last year. We have a very big impact from prices, SEK 3.2 billion. This is, of course, mostly metal prices, where we have a good development of copper, zinc, and gold to take them in order of importance. It also includes a significant effect from provisional pricing.
It is not only the metal price, it is also a small but significant increase of byproducts. We have in here about SEK 200 million from sulfuric acid. Volumes are down compared to last year, and this is over-explained by Garpenberg. So we have lower production in Garpenberg, and then as a result of the seismic events last year or early this year, but it is partly offset by better production at other sites.
Some that are worth mentioning are Aitik, with a good production, Somincor performing well, and Harjavalta, which Mikael talked about. Costs compared to the same quarter last year are up by about SEK 600 million. In there is an oil-driven inflation that hits oils, it hits chemicals, and it hits transports. But we also have some additional cost in Odda during the ramp-up.
Also due to the fact that we have a strong third quarter, we have had to increase the provisions for our profit-sharing programs that goes to all staff. In the other line, the + SEK 259 million, there are different things, foreign exchange and others, but the biggest individual item there is the sales of excess electricity that we do in Odda.
Of course, when we will get up to full capacity there, this part will disappear because we will consume the electricity ourselves. But for now, there is a significant impact from sales of electricity. Comparing instead sequentially Q3 to Q2, it is a similar story, a good development of prices and terms. Again, it is copper, zinc, and gold primarily, but also about SEK 100 million each from foreign exchange and sulfuric acid. Volumes compared to Q2 are up SEK 900 million.
Getting Garpenberg up from where we stood in Q2 to the current rate in Q3 is about a third of that amount, meaning then SEK 300 million. In addition, we have got better grades in Aitik and good production in Somincor zinc, Zinkgruvan, and less planned maintenance in smelting. So good volume quarter. Costs are lower than in Q2.
That is two parts in that. It is the less planned maintenance this quarter, and then we also have some seasonal effects where we have a little bit of a lower cost during the vacation period that we had in Q3, even if it is easy to forget now when we are in October. Depreciation is up SEK 80 million. That is largely Odda. Odda is not depreciating in full pace yet. We expect another SEK 150 million, roughly, in pace in Q4, and then Odda will be depreciating at the full pace after the expansion.
We had some impact already in this quarter. Then further on for next year, we will of course have an effect in Rönnskär also when that is producing. Moving over to cash flow. I think we commented the operating profit and the investment side. Working capital is minus SEK 1 billion. That is two things that are worth highlighting.
With the price development that we have had, we get a quite significant impact on working capital for better prices. We tie more inventory in Swedish krona than if we have a higher copper price and high zinc price and so on. So that is a significant part. We have not quite been able to reduce all of the working capital that we tied in Q2 either. Looking forward on the working capital side, I would just like to remind you that in Q4, we will tie working capital in the tankhouse in Rönnskär.
We mentioned a number of SEK 2 billion last quarter, and since then, prices have increased even further. So filling the tankhouse with copper and gold and so on, that means that we are going to build some working capital. So for those of you modeling, please include that. Apart from that, I think we have covered the remaining parts in cash flow.
That leaves us with this final slide from my side. It is a strong balance sheet. We have got 20% debt-to-equity ratio, which I think is a good level to be when we look back at the Lundin acquisition and we look forward to the next acquisition. We have a net payment capacity of SEK 19 billion, and all in all, a strong balance sheet. Mikael, you want to continue?
Thank you. First of all, just remind you about the Capital Markets Day that we are planning for March. It is very high time to report your participation if you want to join us. Outlook going forward, I think we touched upon this very much. There is a lowering for this year of the grades in Aitik, but a hiring of the throughput in Aitik.
Apart from that, there is not really anything that changes. There is a little bit of a difference of the classification on the CapEx on the mining side, with the larger part going to mine sustaining and a smaller part to other mines, but otherwise, the guidance is very stable. I should also, by the way, mention, as I said before, smelters planned maintenance is also up from SEK 450 million to SEK 500 million. With that, I leave the floor open to questions and for Olof Grenmark to monitor us through this session.
Ladies and gentlemen, that opens up our Q&A session, and we will start here in Stockholm, and we have Johannes Grunselius from SB1 Markets, please.
Yes. Hi, everyone. It is Johannes here, SB1. Two questions, please. The first one on Aitik. You have lowered the grade guidance for us to 0.16. How should we think about 2027? I know you are going to talk more in depth in December, but could you give us some color at this point?
Not really. You are absolutely right. We are going to talk about it in December, and the mine plan for next year is not finished yet, and until it is, I am not going to comment too much.
Okay. But if we look at the previous guidance, that implied an uplift in second half year, which is not coming through. Should we think that that is basically pushed one or two quarters? Could you help us with that?
I can give you a little bit of light. Part of that is being pushed out, and there is also one thing that we hope is more of a one-off effect of this one, that we are having a couple of benches which have a higher waste rock dilution than we are used to in Aitik. And that is also linked to why we are having a higher throughput, is that we are not trying to separate this waste rock. We are loading it all through the mill, helping on the volume, but being negative on the grade.
We, of course, need to look around this. We have a sense that Aitik should go back to normal, i.e., that we do not have much of waste rock dilution as we come to the deeper benches. We have been trying to check for this as this thing has happened. So it is unexpected waste rock dilution and a combination also that by mining a little bit slower than the initial thoughts, it takes a bit longer to get to the better grades.
Okay. The other question I have is on sulfuric acid. I think you said, was it SEK 200 million+ in delta year-over-year? I know you have plenty of annual contracts in your portfolio. Do you expect more incremental profit from sulfuric acid going forward, given where prices are right now?
To that, I can say yes. If you want to know about how much, I need to look at my neighbor.
I am not going to guide how much, but we see a positive trend in there. I think that we will see a positive number also next quarter. But I am not going to give an exact number on that yet.
Johan Sjöberg, Nordea Securities, please.
Thank you, Olof. Could you talk a little bit upon the EBITDA contribution from Norzink and from Rönnskär now when you are wrapping up that given the current metal prices? Also how we should look at that into Q4, given the positive trends in Odda, and when it comes to Rönnskär tankhouse, when we should start to see the positive impact on EBIT from that?
It's good to hear somebody saying Norzink. It's been a long time since I heard that word last time, but it's a nice name. I will give it back the numbers exactly to Håkan, but just a sense of it. We haven't had anything come through yet in Rönnskär, and therefore it's all ahead of us, the positive impact that we're going to see.
On Odda, it's a little bit more complex. As you saw, we've gotten much better. As I said, we've got a much better throughput. There's more still to come. There also in Odda, we have been holding back on silver-rich concentrates, because until we have everything under control, we don't want to risk wasting silver into tailings. Therefore, there you will get the effect once we will start daring to take silver-rich concentrates in there. Håkan, numbers.
Yeah, well, I'm not going to give you an update on numbers for both cases because there are so many moving parts with sulfuric acid, zinc, and so on. I'd rather refer back to the Capital Markets Day where we gave an update, and then it has moved in the right direction since then. Only additional comment is that for Odda, I think it's important, and also for Rönnskär, there are a few weeks before you sort of put it in until you get it out. For example, in Q3, we had almost no extra effect from Odda, even if it's moving in the right direction. I think there is some lag, but we'll see money starting flowing in Q4.
A follow-up question on Johannes on sulfuric acid and the contracts. How big share of your volumes have been exposed to this price increase? That is, how much is sort of renegotiated next year? The delta between Q1 and Q4.
Well, there are all kind of versions in there. It's a fairly small part that is directly linked to spot. In particular, if you read in the newspapers about global spot prices, that's a very tiny part of our sales. Most is connected to European indexes of various kinds, and then contract by contract, it differs on how often it's reset. If anything, I'd say that 80% of the production we have is connected to European index on some frequency, yearly or shorter.
Okay, but how big share have you seen already being impacted by higher prices?
Well, it-
How much is yet to come next year?
That comes gradually, but I think when we are through with this year, we will have a fairly recent impact on all of the sales. There are a few contracts reset every quarter, so it is continuous, if you like.
Okay. Thank you.
Kaleb Solomon, SEB.
Thank you. In Q2, you expected Odda to reach full production during Q3, and you said roaster availability averaged 50% this quarter. I think you said it was 70% by September. Is that a fair run rate to assume for Q4? What still needs to be resolved before you can sustain full production?
Well, as always, when you have these things. I should say, by the way, that when we run, we run 100%. We don't really run it slower. The question is, how do you avoid having to stop as many times? I think you've had the discussions. We've had mechanical issues.
We've had issue with the safety system that has blocked out at different stages when it should not have, and so on. We're getting better and better at this. I think that 70 should be kind of the new floor, and then moving up towards somewhat like 90%, where the availability should be for equipment like this. I think we're quite close to getting there, to get the ramp-up.
Once we have the ramp-up, just to get everything clear, once we have the ramp-up, when we have the full feed, that's the only time we can start using all the later stages, the leaching and everything else going on full pace. That's when we also need to make sure that we get the recoveries of silver right and start mixing in more silver-rich concentrate. So it will take some time to fine-tune this thing, but I think the mechanical problems that we've had, which has been the problem, especially in Q2, mechanical problems that should not happen, they are behind us. The mechanical issues are solved.
Okay. That's helpful. Thank you. Just on Aitik volumes, when we asked you about the sort of very good development last quarter, you partly mentioned seasonality and less relining. Is it fair to sort of interpret you now as this being a lasting improvement, and should we expect it to carry into next year?
We had a very good Q2. Q3 is a little bit slower than Q2 because of the reasons you just mentioned. But we think we reached a better base level, if you want to say so, in Aitik.
Thank you.
Anyone else here in Stockholm? Operator, then we start with the international guests, please.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Alain Gabriel from Morgan Stanley. Please go ahead.
Yes. Good afternoon, and thank you for taking my questions. I have a couple of questions. Firstly is on Odda. I think, Mikael, you mentioned that 70% utilization is the new floor. Is the ramp-up to 100% going to be a straight line from here, or will it be more of a hockey stick trajectory? And over what time period do you expect it, now that you are over the mechanical issues, to get to 100%? That's my first question.
Here, you should be careful with 100%. You never have 100% availability. There's always some downtime in a roaster. I have said that 90% is probably reasonable, full availability. We hope that we're going to get there pretty soon. Now, our self-confidence is not so strong regarding all that because I said that before, but generally speaking, we should get there pretty soon to get the throughput in place and working with the other parts.
Thank you. The second question is on the Nexa deal. Do you have any updates on the MTO process for Peruvian listed subsidiaries? I believe the last public comment you made, you had given a rough estimate of around $3 billion to take out the minorities there. Does this figure still stand, and what are the next regulatory or legal steps that are needed for you to move forward with the process?
I'm going to have to come back to. I'm going to answer the way I hate to answer, but I'm going to answer that due to legal advice regarding both the voluntary tender offer and the mandatory tender offer, I will refer to what's in the press release and not say anything more.
Okay. Understood. Thank you.
The next question comes from Adrian Gilani from ABG Sundal Collier. Please go ahead.
Hello. I guess, first of all, on Garpenberg, you write that the ramp-up is going as planned, but if anything, you seem to be above the 30% utilization rate that you talked about previously. Is that sort of a normal quarterly fluctuation, or can there be some upside to the ramp-up timeline you communicated before in Garpenberg?
Well, the guidance we've given is the 1.5 million tons for the whole year, right? That's what we need to deal with. Then you can say a couple of 10,000 up and down in a quarter is not really relevant. So we are very much in line with the guidance we've given. Somebody made a little bit of a smart comment that, "Okay, so you're going to go from 100,000 tons to 200,000 tons.
Is that happening on New Year's Eve?" No, it's not really happening on New Year's Eve. It's of course happening gradually. Yes, theoretically, we could go a little bit faster in Q4. We're not going to be at the pace of 200,000 tons per day on January 1 either. So it's going to be gradual pieces, but we're guiding for whole years.
Understood. My second question, could you talk a bit about your view on sort of benchmark TCs for copper and zinc heading into 2027? If they do end up being negative, would you still stick to your policy of locking in 80% of your smelt volume from benchmark terms?
We will stick to that one because we have those contracts already in place, so we cannot really step away to a larger extent from the strategy that we have. We will have roughly 80% on benchmark, even if they go negative. So I'm not going to speculate on what the number will be. The number will be what the number will be. I will just make a general comment that if you add in the very bad treatment charges with the very good value of free metals and the good value of the sulfuric acid, smelter terms as a package are not that bad.
Yep. Understand. I guess that actually answers my questions. Thank you.
Thank you.
The next question comes from Liam Fitzpatrick from DB. Please go ahead.
Good afternoon. Three questions from me. Firstly, on Odda, you mentioned, Håkan, excess power sales in Q3. Could you quantify that number for us? Second question is on working capital. Was any of the SEK 2 billion build related to Rönnskär in Q3, or is that all in Q4? Related to that, we normally see a seasonal reduction in working capital in Q4.
I mean, ex Rönnskär, should that still come through? The final question is a bit of a follow-up on treatment charges. It is tough to model the TCs into next year, given we are now in negative territory. Are you able to give us some sort of number for copper TCs? If we were to see or if 2026 was a negative TC of, say, minus 100, what would that have meant in terms of impact on EBIT this year?
Okay. Do you want to start or should I start?
You can.
Okay.
I think these are most yours, all of them, so you go ahead.
Yeah, okay. Starting with the excess electricity, excess power, I think it's about in the quarter, just over SEK 150 million. Working capital, nothing of the Rönnskär tankhouse working capital that we're going to tie with the SEK 2 billion. Nothing of that happened in Q3. All of that will happen in Q4.
You're right, seasonally, we typically have a good fourth quarter when we come to working capital. I think the underlying development is probably going to be pretty okay, except the capital build in Rönnskär, but perhaps less so than last year. We ended last year on very low inventory numbers, and I don't think we'll be at quite the same level this year.
Then also, I could just mention that in a copper smelter, the value of the inventory is very big, so it doesn't take very much of a hiccup in the ramp-up to build extra working capital in there. So I'm a bit conservative in my estimates for Q4 working capital, but you're right, the seasonality is still there, so that's a fact. Could you please repeat the last question, or did you get that?
What's the impact of negative 100 TC, whatever then? I don't know. We published the TC sensitivities.
Yeah, we have the sensitivity in the quarterly report.
Yeah.
But it's a bit around zero. It became significant. Yeah. I think we'll have to redo those. But what we do see right now is that I think if you just work at the feed level, I think you can get the general idea. But TC is a very small part of the money we make in smelters. In our case, it's positive, though, because we do get payments for complex material in the feed. But I have to come back to some form of sensitivity on those TCs.
Okay. Thank you.
Thank you.
The next question comes from Jason from [Inaudible]. Please go ahead.
Hi, gentlemen. Thanks for the presentation. Just two questions from me. One, any thoughts you could frame for us on how the smelters are under-earning relative to their capitalization and the recent investments that you've made? That's the first one. Second one, Mikael, you seem quite excited about Somincor. I'm just wondering how you're thinking about the optionality in this asset. Is there any option for a low capital cost debottlenecking there?
If we start with the second one, the answer is yes. There are, and we have talked about that many times, there are geographic or geological potential in there. If you read the European Union list of strategic projects, there is an expansion in Somincor in there. Yes, there are clearly options for, as you described, typical greenfield expansions with relatively little CapEx.
I would say yes, the answer is yes. The first question, just to understand, you were talking about the underperformance of smelters, and it depends, of course, where you put your baseline. I am not sure that there is really an underperformance of smelter, but there is an upside of smelters, which I would argue is all of the guided uptake in EBITDA in Rönnskär, because nothing of that has happened as of Q3.
It is most of the indicated EBITDA uptake on Odda, even though some has happened, but as Håkan pointed out, with the fact that there is a timing delay between the time you can feed, which is linked to the availability until you get the product out, most of that has not come out yet. We have also had still somewhat higher cost for adaptations we needed to do. I would argue also that most of the upside, as communicated in the Capital Markets Day in Odda, is ahead of us.
Sorry, Mikael, could you just remind us then what the EBITDA uplift potential that you see in each of the two smelters from here?
In the Capital Markets Day, I am looking at Håkan to remind me if I say the wrong thing, but I think that we said it was EUR 150 million in Odda at the outtake, which was at the time of the Capital Markets Day, EUR 250 million with the price and terms as of March this year.
For Rönnskär, we set SEK 1 billion to start with, that we said, I think, had gone to SEK 1.5 billion, right?
Correct.
With the prices and terms as of March this year. Since March, the prices and terms have improved. These numbers should be slightly higher today, but we do not have, at least I do not have an exact number.
Okay. Overall, we should be talking about call it SEK 2 billion-SEK 3 billion improvement once these things are running properly, fully ramped up?
Yeah. If you add what I said, it was four.
Okay. Sounds good. Thank you very much, sir.
The next question comes from Amos Fletcher from Barclays. Please go ahead.
Yeah. Afternoon, gentlemen. A couple of questions. First one was just on the subject of Nexa. It had a credit rating downgrade to junk earlier this week. I just wanted to ask, what are the implications if we get another agency downgrading them, bonds get put to the company?
You can put this in two ways. There will be the opportunity for the counterpart to ask for a prepayment on the bonds. This particular one that happened is going to have a quite limited impact, and other ones could have bigger impact if they were to happen. Then it's a question whether anybody wants to prepay or whether they would like to stick with them anyway. I would say that this is a little bit of a complicated matter, it has to do with many things, but we feel relatively good about the situation.
Okay. Secondly, I just want to ask, just to, I guess, a little bit more clarity on the working capital side, just whether you have built all of the concentrate inventory at Odda that you are requiring for the full ramp-up, or were there's going to be any more of that to happen in Q4 that we should be aware of?
I think basically we've built all we have to build in Odda, and we haven't built anything that we need to build in Rönnskär. I think that's the easy way of putting it.
Okay. I just wanted to ask on, I suppose, sort of timing on the Odda ramp-up, as you were saying, you're hopeful to get towards 90% relatively soon. I just wanted to ask what's the kind of timeframe for getting the recoveries right and then putting the more silver-rich concentrate feed through the plant? Is that something that happens through H1 next year, or is it likely to take a bit longer?
As I said, my kind of self-confidence in promising things in Odda is a little bit low, but I would say it should clearly happen in the first half of next year.
Okay. I just wanted to ask, you were mentioning about D&A uplift or depreciation uplift from Rönnskär as it ramps up in 2027. Have you got any sort of guidance on the quantum of D&A uplift then to expect from this?
On depreciation, it is about, let's see, SEK 150 million we are talking about, roughly.
Per quarter.
Per quarter.
Per quarter.
Okay. Perfect. Thanks so much, guys. Thank you.
The next question comes from Daniel Major from UBS. Please go ahead.
Hi. Thanks for the questions. Yeah, first one on Garpenberg. Last couple of quarters, you've given us quarterly EBITDA, EBIT, kind of run rate, just to help us model through the year. Clearly, volume's improved. Can you give us the same or frame it a different way? How much of the volume delta in mines quarter on quarter came from Garpenberg?
See if I can I'm starting to think what I should say. I think if we compare Q2 to Q3 and talk about the volume aspect, there was about SEK 300 million in volume uplift between the quarter. That also brought the mine from a slight loss to close to SEK 300 million EBIT profits Q2 to Q3.
Got it. So around 300. Okay, that's clear.
Yeah.
The second one, I think little surprise, both mining and smelting had a positive cost benefit in the quarter, given some of the fuel pressures. Can you just remind us the fuel sensitivity and from a perspective of any time lags, if the status quo for European diesel pricing remain the same Q4 into next year, what would the cost delta be?
Well, there is a little bit of a time lag, but I can give you the overall numbers that we spent in the quarter, and then you can apply various percentages. On oil and diesel, we've spent about SEK 400 million in the quarter. So depending on price developments from here, that's the base.
Power, we've spent about SEK 700 million in the quarter. On other forms of energy, it's about 100. So that's what we have. In addition to that, the diesel also impacts transport, chemicals, although with some lag. So I think if we spend 400 on oil and diesel, I think you can add roughly the same amount on chemicals and transports. So that's the base, and then you can apply the percentages that you want to apply on that.
Okay. Could just follow up on that. You said there's some time lags. If it just were spot, remaining same Q4 into next year, would that be material or have you largely realized-
I think-
-the kind of uplift in the spot price this quarter?
I think we would largely have it in. I'd guess it's a month lag or something like that. We would have most of it.
Okay.
Okay. That is clear. Thanks. What was the provisional pricing impact on the quarter?
Provisional pricing was about SEK 200 million positive. When I say provisional pricing, then as usual, I refer to the preliminary priced volumes at the end of Q2 that were then finally priced in Q3. That had a positive effect of SEK 200 million.
Great. Thanks a lot.
The next question comes from Matt Greene from Goldman Sachs. Please go ahead.
Hi, Mikael. Just a quick question on Garpenberg. You touched on production is recovering as planned, but just more on development meters, it's fallen again quarter-on-quarter. Where do you need to get those rates to support 2.3 million tons next year?
I guess just trying to sort of see if there's any technical personnel or equipment constraints in you being able to lift those development meters, appreciating that you do need to open up new mining areas given 70%, 75% of your working areas were lost with Lappberget. Thank you.
I think we are at around 1,300 m right? 1,300 m, 1,350 m of development, and that's roughly what we need. We are not with a big margin, but we are tunneling at roughly the pace that we need to tunnel in order to be able to meet what we have guided for and also to be able to do the tunneling that's needed for then the new shaft that is also now starting to be put in place.
The next question comes from Krishan Agarwal from Citigroup. Please go ahead.
Hi. Thanks a lot for taking my question. Most of them have been answered. A quick follow-up on the Nexa process. You've announced in the release that you got approval on October 27 for one of the water intends FDI received in the Swedish market. Can you help us with any of the other major regulatory approval that are still pending for the transaction? Also the vote which you're going to held on November 23, that has to be the simple majority or the super majority?
To start in the back, that is a simple majority needed for that in our EGM. Then if you look at the, there are all together roughly 15 regulatory approvals that we need. That is a combination of the ones we have already gotten, the foreign direct investment in Sweden.
There is a combination of the permits that we need in Brazil for owning some natural resources, and then anti-competition rulings that we need from roughly 10 countries. All of them are well in progress and well processing, but it is only one so far that we have really gotten. But we feel that the process is okay for a closing in Q1, but you never know. We do not control the process.
Understand. Of the 10 countries, does that include China?
No, not China. China is not on the list.
Okay. Thank you.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Christian Kopfer from Arctic Securities. Please go ahead.
All right. Thanks very much. A few follow-ups from my side. Firstly, you talk about the guidance in Aitik, and I appreciate that you update on the grades there in second half. I also, if I understood you correctly, it seems that there is some upside to volume guidance in Garpenberg for Q4. If I looked at pretty much all other mine assets, and if I try to square those production numbers to your full year guidance, it seems like there is upside more or less all over the place, including grades. So, are you just being cautious or should we expect pretty much heaven down in Q4?
I think that we've always warned everybody to try to, when you're standing at Q3 and you get a full year number and you're trying to kind of work out what Q4 is by taking the full year minus the three quarters that have been presented, there is always a big kind of risk in taking that too long. I would also say that don't take that too seriously. When we don't change the guidance, that means that we're more or less going to continue the way that we have guided before, and don't take that too long. So it looks pretty good, but don't overdo it, Christian.
All right. Just a small detail, perhaps, in that you present. I'm sorry if you already talked about it, if I missed it, but you had some minus number on metal premiums.
Where is that coming from? Also, pretty big minus number on TC/RC. Is that spot-related or what is going on?
Well, Håkan, I will let you go into detail, but TC/RCs must be spot-related. We do have some spot in the mix that will go through there. The premiums, Håkan, help me.
Well, as you say, the TC level or the premium level is related to spot during vacation periods. The TC, I will have to get back on that. We are following the benchmark, but then you have quarterly variations depending on the amount of complex material, the amount of, for instance, mercury and similar that we get extra payments for. So it is a variation, and given the ramp-up of Odda, the flows have been a bit more volatile than usually. I will come back to you separately on that, I think.
That is a good point. If you are comparing premiums Q on Q, we always have lower premiums in Q3 because of the vacation period, and thus selling more overseas with lower premiums when industry in Europe take vacation.
All right. Fair enough.
The next question comes from Erik Rougier from Fearnley Securities. Please go ahead.
Hi, Mikael, and hi, Håkan. Thank you for presentation and for all the questions. I had a few questions. On Tara, I see unchanged full-year guidance. This approximately 500 kilotons milled in for Q, which is roughly 60% above 3Q and subsequent other previous quarters. What supports this implied acceleration going forward?
Once again, I will refer to what you just said. You have to be a little bit careful exactly how you look at the guidance and exactly what kind of conclusion you draw for Q4 individually. Also pointed out by Christian just a way ago, I think that there is some upside to certain numbers that could be downside to certain numbers as well in terms of guidance, and we have not overspent going into the exact details of certain mines. In general, Tara is continuing more or less where it is, maybe slightly better in Q4 because things are sorting itself out, but it's in line with what has happened before.
Thank you. Much appreciated. Also, following the proposed Nexa acquisition, should we expect the balance sheet and deleveraging to take priority over additional growth in investment? I am thinking, for example, a project such as Laver.
Well, it is a good question, but it is a little bit difficult to answer right now. We will answer capital commitments to projects like Laver or Nautanen as they mature and take a look into what the balance sheet will look like in every time. Having said that, you know that those two big-ticket items are a couple of years out, which means it gives us a few years of hopefully good positive cash flow to make sure that we have a balance sheet where we want it to be.
Thank you. That is a perfect segue for my last question. On Garpenberg, you reiterated the 2.3 million tons production target for 2027, but I saw mention of an ongoing permitting process for additional waste rock storage following the seismic event. How confident are you that the necessary approvals can be secured in time, and thus your 2.3 million tons guidance assumes that the new shaft is operational for the first half of 2027?
You are referring to, and I will just for everybody's clearance, there has been some discussions in Sweden that we have asked for a permit to store more waste rock above on surface for our plan going ahead in Garpenberg, and that the county board who can give an exemption have decided this is too much of a change to give an exemption.
We need to get an altered environmental permit from the court, and that is what you are referring to. I think just to be very clear, we do not have any issue to handle the waste rock. There are many other ways of doing it, including the kind of very simple one, to just put it through the mills and put the tailings out in the tailings facility because we have full permit for that.
It's a little bit stupid to spend energy on grinding waste rock just to put it in a tailings facility, and I think everybody's aware of this. I don't think that in the end of the day, this is going to be any issue whatsoever. There are lots of plans that might not be the perfect plans if for some reason this permit gets delayed.
Thank you for the clarification and for the encouragement in the guidance.
Yeah.
The next question comes from Boris Bourdet from Kepler Cheuvreux. Please go ahead.
Hello, gentlemen. Thank you for taking my question. It's a follow-up on Garpenberg, following your comments on the SEK 300 million sequential improvement. I just wanted to check that's an EBIT figure, as far as I understand, and that compares to something that was close to zero in Q2. I would be interested in getting if that's actually EBIT contribution, how much is the related depreciation? Thank you.
Well, it is an EBIT number, but the depreciation is not very variable, so it is fixed, so it would be the same in Q2 and Q3. The variable cost is very limited in this situation.
Okay. Last year, the depreciation was SEK 650 million, so we would divide that number by four and get the depreciation by quarter, right?
That is correct with the addition that we wrote off a few hundred million SEK, and that goes away from the depreciation base. But apart from that, you should be pretty close with what you are saying.
Okay. Thank you.
With that, it looks like we are coming to the end of the questions. I would just like to wish all of you a very happy All Saints' Day if you are in the part of the world that celebrates All Saints. I wish you also then a very good end of the year. I look forward to seeing most of you in. Well, some of you we will talk to at least through a press release in early December with the guidance. Otherwise, we will see you all in this setting in three months from now. Thank you.