Ladies and gentlemen, I'd like to welcome you to this Boliden Press Release Presentation. Here on the line is Olof Grenmark, Head of Investor Relations. Today, we will have this presentation led by our President and CEO, Mikael Staffas, and he's also joined by our CFO, Håkan Gabrielsson. I remind you that we are in silent period, so this analyst call is intended for this press release that we released this morning only. We will not answer questions about the last quarter that has just passed, neither about current market conditions. You will find a short presentation regarding today's press release at our webpage, which you can follow as Mr. Staffas speaks. Finally, I'd like to remind you about that this presentation is intended for the financial community.
That is, of course, journalists and private persons are welcome to listen in to this presentation, but we ask you to be preferably in a listening mode. Mikael Staffas, the stage is yours. Welcome.
Thank you, Olof. I hope that you will now be able to, if you want to, look at the website on the front page to the right there. There will be a little exhibit deck. It's literally two exhibits, so it's not that you're gonna miss a lot if you don't find it, but if you find it might be easier to follow what I will say. The background or the information that we've gone out with today in the morning is that we, as most other global mining companies, have committed to follow the global tailings standard, the new global tailings standards being implemented. This new global tailings standard has lots of elements to it, but the element that is most interesting for us has to do with Static liquefaction.
This is a phenomenon that was not included in previous tailings standards, thus it wasn't in the calculations for the stability of dams. We have over the last two years intensively.
Okay. Thank you so much.
Thank you. Our next question comes from the line of Liam Fitzpatrick at Deutsche Bank. Please go ahead, your line is open.
Morning. Yeah, just on Aitik, I guess a few questions within this. The first one is just the level of confidence that you have that production won't be impacted. Because as you say, this is a fairly big project in terms of CapEx size, and you're having to move infrastructure. Then linked to that, does this have any impact on, I guess, Likavara and the mine plan for Aitik? And finally, just in terms of the permitting, do you foresee any kind of challenges in getting the necessary requirements through for this? Because I guess if you don't, then potentially in two years that could have quite a material impact. Apologies, the final one.
In terms of CapEx, so you said SEK 1 billion in 2022, will the remaining SEK 4 billion all be in 2023, or could that also creep into the out years? Thank you.
Let me take them from the background. Regarding permits, you know that we are constantly at a risk, if you want to say so, because we only get permits at 10 years at a time, and we have a new permitting renewal coming up in Aitik in about two years time from now. Given that we're doing this, I would say if anything, the likelihood that we will be able to continue in Aitik increases with the fact that we have, if you want to say so, the dam stability issue, which is always a main, major part of any renewed environmental permit. That issue should be much easier to be resolved now than it would have been otherwise. Regarding permits in other sense, we are not too worried.
There's always a little bit of a risk that you can't get a permit exactly what you want and that there is something happening. The main issue normally with permits in Sweden is that it takes a long time. As we have the right to start and to do actions while the permit process is going on, that should not be too much of a risk right now. The CapEx timing, I should say generally that there will be things also happening in 2024. So it's not gonna be all in 2023, but it's, you can maybe split those last four between 2023 and 2024. There is, as you highlighted pointing out behind this, of course, in an ideal world, we would have liked to have much more planning to do these things.
We are now forced to kind of make a speedy start from standing still, which we are normally not used to. Of course, there are risks into this one, but we try to build in margins enough to be able to handle that, both from a timing point of view and from a CapEx point of view. As we have pointed out, it is critical that this moves on swiftly for us to be able to hit this 24-month period in order to secure that we have production. The last one on your question was Likavara. As of right now, we do not see this impacting the Likavara expansion.
It might be that we need to reconsider that over time because, of course, we haven't been able to do a full calculation of where we, for example, best utilize the trucking fleet and whether there are some things that needs to be rescheduled because trucking capacity will be a bottleneck at this time, since we need to move lots of rock around. It shouldn't really impact. That's my best estimate as of today.
Thanks, Mikael. If I could just have one follow-up. As you say, this is kind of a short notice, big project that you didn't expect to have to do. In terms of how you're thinking about where the risks are, is it labor availability that could be a challenge? Is it equipment? Are there any particular pinch points that you see with this?
I would say it's a little bit of all of that. There could be a labor challenge, there could be an equipment availability challenge that will play into this. Maybe not on time, but on cost, there is, of course, a general inflation situation that could hit on this one that we don't really know. That's both kind of a global inflation with diesel prices and everything else, but also kind of local inflation, whether we, you know, how we can get the local economy to absorb a relatively large product like this. Yes, there are risks, but life is full of risk, and we think we're gonna be able to manage them.
Understood. Thanks very much.
Thank you. Our next question comes from the line of Alexander Pearce at BMO. Please go ahead, your line is open.
Thank you and morning all. You've mentioned that a key part of the cost for this lift is actually due to some of that infrastructure. I wondered maybe you could provide some guidance for the next phases of the dam. Obviously, we can see the green cross-section there in the presentation. Is that likely to also have some kind of lumpy spend, or is that going to go back to a smoother CapEx profile through the life of mine?
That's gonna go back to a smoother. The lumpy part is to get that, bluish, pinkish, whatever, bluish thing going, and that's what needs to be done. Maybe the size of it, if you look at it, doesn't really reflect, but that needs to be done in two years. The greenish that might look big is actually over 25 years, so it's not so much every year, and it's not moving infrastructure the same way. That greenish thing, exactly how much it is and how it will play out, we'll come back to. We haven't done the detailed planning for that.
Okay, thank you.
Thank you. Our next question comes from the line of Johannes Grunselius of DNB Markets. Please go ahead, your line is open.
Yes, hi, everyone, it's Johannes here. Just a question on your thinking about grades and perhaps also volume output from the Aitik mine. Is this impacting your planning whatsoever for the coming years?
I would say it's a little bit premature to answer that because I said we haven't done a detailed mining plan yet as how we're going to manage this thing. You know that grades are going to be impacted with the low grades for the next few years, and that's been communicated well before. I don't think that shape is in any kind of major way being changed. We still have these low-grade years. In terms of volume, yes, there will be risks in terms of volume because of this, because there are additional constraints that come into play. Trucking capacity will be one of them. But as I said, our best estimate as of today is that we will be able to also get the volume through as planned.
My second question is about overall CapEx in the rest of Boliden here for 2023, 2024. Do you foresee that you will push out some other projects in the group because of this? Or is this sort of independent on what's happening here in the Aitik dam construction?
This we haven't looked into. We haven't gotten so far. This is really just a hunch at the top of my head. I would estimate that there could be a chance that we would postpone some projects, because of the simple fact that, of course, this will also take quite a lot of resources from the internal project resource that we have, which means that it will be difficult to do other projects in the same fashion as we maybe would have done otherwise. As I said, this is really prematurely, and we have not looked into our investment plans in that detail yet to do this.
Understood. Okay. Clear. Thank you very much.
Thank you. Our next question comes from the line of Christian Kopfer at Handelsbanken. Please go ahead, your line is open.
Yeah. Thanks, operator. Just a few questions from my side. Firstly, I think you talked about that this substantially opens up for longer life length of the mine. So just trying to understand there what kind of magnitude we're talking about in terms of that. Secondly, on the CapEx, I mean, obviously it's huge amount of CapEx from my perspective. How sure are you about the CapEx? What kind of contingency have you included in this? Yeah, those are the question. Thanks.
Regarding CapEx, I don't wanna go through exactly how we've done the calculations. You know, I will phrase what I said before that, yes, there are some uncertainties regarding the numbers because they've been done quickly. On the other hand, we've also you know, done the best estimates as far as we can, also taking into account that there will be costs coming in that are difficult to see. Regarding life of mine, it's a little bit tricky to give a clear picture on this one, but you put it this way, with the old dam construction, even before we found out anything about Static liquefaction, with the old dam construction, for it would have been challenging to go more than 20 years on from now.
In kind of the early 2040s, we would have needed to have another tailings facility. As you know, in the Swedish context, new tailings facilities are really difficult, but it's not impossible. We could have continued after that, but it would have been with some challenge and also by the way, some investment. By using this Centreline dam method, without going into details, it feels that we, you know, probably can gain in the existing tailings pond a couple of years, maybe even up to five years compared to what we would have been able to do previously. Now, nobody knows what's gonna happen going forward. As you know, there's lots of mineralization around Aitik, and we have no ambition to close this facility in 20 years either.
I think it's gonna be around for much longer, but that's, of course, it all depend on where copper prices go in the future.
Right. Thanks.
Thank you. Our next question comes from the line of Viktor Trollsten of Danske Bank. Please go ahead. Your line is open.
Thank you very much, operator, and good morning, everyone. Just thinking of what you write in the presentation, prepare for long-term move to Downstream dam constructions. Could you just elaborate a bit on what that means in terms of timeline and what you think about that? I know that basically all your tailings facilities across the group are Upstream and quite old ones. When I look at a construction year in Aitik, it was 1968. We're talking 1967 in Harjavalta, et cetera. For the coming 10 years, could we see an investment phase where you change all your tailings to Downstream?
We're not gonna change anything to Downstream just because of the word Downstream. We will look at every individual dam and make the assessment based on that. As I said before, yes, we have looked into this in Garpenberg, and there is a section of the Garpenberg tailings pond that we know that we want to change to making it Downstream. It's not all-time critical, but we need to do that over time to secure life of mine on Garpenberg. We have also looked into Kevitsa, so far not found any reason to change dam construction in Kevitsa, as far as we've gone so far. Otherwise, Harjavalta actually has a brand-new dam, and Harjavalta doesn't have these kind of issues as it is, a much smaller facility.
The other potential issue could be in the Boliden area, the tailings facility there as the present one as we're working with is only up until 2028 anyway, so we need to find another solution in the Boliden area for tailings in a few years anyway, and that will potentially also include change of dam raising methods, but that we don't really know yet. I don't know if I answered your question. I think that in the context of Boliden and the context of dams, Aitik is by far the biggest one. It is, as you pointed out, a relatively old dam. This was built in 1968 at times when, number one, Aitik was not supposed to become 50 years old.
Aitik was maybe supposed to be around for 10, 20 years, so nobody could foresee at that time that the dams would be raised as high as they've been raised already. Secondly, it is by far the biggest one. I mean, these dams today raise over 60 meters tall from the base, and as we move forward at the end of life of mine, they're gonna be well over 120 meters, which is much bigger than anywhere else in the group.
Okay. No, that's clear. Just thinking about Tara Deep, just looking at the Tara Tailings facility, also relatively well, and also our current storage is quite close to the planned total storage for the coming five years. Just does this make you also consider an investment in a new tailings facility if you go ahead with the Tara Deep? Or is that already included in your previous, let's say, thinking? Does this change anything, how you think of future projects?
No. By the way, the dam in Tara is, by the way, not a downstream dam. It's a Centreline dam. The present Tara tailings facility reaches until the late 20s. It was always perceived that in order to do a Tara Deep, we will need a new tailings facility in Tara.
Yeah. Okay. No, that's clear. Just finally, maybe more hypothetical, but are you know, is it way too early to start think about these tailings as assets rather than liabilities? I or do you see any, or let's say, potential for actually extracting metals out of, let's say, the tailings facility in Aitik, as it should include some metals? Is it way too early to you know, commercialize that?
This is also on a case-by-case method, and I would say that we are already doing this. We have used some old dams in the Boliden area that we've had around for the last few years. We have a dam in Kylylahti which contains cobalt that we are interested in doing, and so on and so forth. We are constantly looking into this. Regarding Aitik specifically, I would say that the chances are relatively low because the Aitik recoveries have always been relatively high, which means that the metal content in tailings is relatively low. We will always have this as a potential and look into it, even though I would say Aitik is a relatively small chance.
Okay. No, that's interesting. Thank you very much.
Thank you. We currently have one further question in the queue. Just as a reminder to participants, if you do wish to ask a question, please dial zero one on your telephone keypads now. That question comes from the line of Alain Gabriel of Morgan Stanley. Please go ahead. Your line is open.
Hi, thank you. I just have one further question with regards to the infrastructure. I think you mentioned about SEK 2 billion of the CapEx will be needed to move that and just create space. Could you elaborate on what type of infrastructure you need to move?
Well, the biggest part around this is that we need to have another water storage facility because we will need to encroach on the existing water storage facility that is next to the dam. This one needs to be built new, and with that comes the whole water infrastructure, piping, water cleaning, pump Stations and so on. That is by far the biggest piece of this. We also have the electric cabling that is going right in this area that needs to be moved, which is also a substantial part. We have part of the rail infrastructure, which is in a place that we will need to use for increasing the dam, which is also part of this number.
Those are just to give you, but the water piece is by far the largest.
Okay, great. Thank you.
Thank you. As there are currently no further questions lined up, I'll hand back the floor to our speakers for the closing comments.
Okay. Well, this is a situation that in some way is of course unfortunate. It is an investment that we didn't think that we would have to do, at least not in this timeframe. We as a company have gotten the information. We've taken the information very seriously, and we've acted very quickly to make the best out of the situation, to make sure that we can get into a situation where we can continue to produce in Aitik, and we will also future-proof the mine for the next decades. It is, as I said, it's a quick one, but we feel good about the assessment that we've been able to pull together in a very short time. With that, if there are no further questions, thank you, everybody, and have a good day.