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Edited Transcript of ACL.J earnings conference call or presentation 6-Feb-20 10:59am GMT

Q4 2019 Arcelormittal South Africa Ltd Earnings Call

Gauteng Feb 13, 2020 (Thomson StreetEvents) -- Edited Transcript of ArcelorMittal South Africa Ltd earnings conference call or presentation Thursday, February 6, 2020 at 10:59:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Avinash Maharaj

ArcelorMittal South Africa Ltd - Executive Director

* Hendrik Jacobus Verster

ArcelorMittal South Africa Ltd - Director

* Jake Olivier

ArcelorMittal South Africa Ltd - Chief Operations Officer

* Tami Didiza

ArcelorMittal South Africa Ltd - Senior Manager of Stakeholder Management & Communications

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Conference Call Participants

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* Kabelo Moshesha

Renaissance Capital, Research Division - Junior Research Analyst

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Presentation

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Tami Didiza, ArcelorMittal South Africa Ltd - Senior Manager of Stakeholder Management & Communications [1]

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For us to make profits from now onwards. We showed that our event's on time and it's 1 minute to 10. A very good morning to all of you, and welcome to the ArcelorMittal South Africa Financial Results Presentation. Last year, we're here in August, we announced our not-so-good results. And this year, around this time, we are here again to announce the results, which I'm sure all of you have already seen, and you are not expecting any miracles. I think of importance is what are the interventions that as a company we are going to embark upon so that we make this company very sustainable.

On that note, my name is Tami Didiza, responsible for stakeholder relations and communication at ArcelorMittal South Africa. On that note, I'd like to take this opportunity to introduce to you our Chief Executive Officer; Mr. Kobus Verster, who will be taking us through the presentation. Accompanying him is our Chief Financial Officer; Mr. Desmond Maharaj, who will zoom in, in the detailed results. After that, please ask them as many questions because if you don't ask them question, you'll be fooling us. On that note, Mr. Kobus Verster.

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Hendrik Jacobus Verster, ArcelorMittal South Africa Ltd - Director [2]

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Thank you, Tami, for that introduction. Good morning, ladies and gentlemen, and once again, welcome to our results announcement. A difficult set of results in a challenging environment. The format is, I will take you through an overview of the results in the form of key messages. Thereafter, I will look at the steel markets locally, internationally and operations. Desmond will deal with the finances, after which I will come back and talk on some strategic interventions that we have done and are planning to do, and I'll take questions.

Looking at the key messages. The 2019 financial year represented one of the most challenging years since the global financial crisis for the world steel industry and an extremely difficult year for the SA steel industry as well as for our company. Domestically, numerous downstream businesses have disclosed being in financial distress. The downturn in the world cycle was -- has been a lot faster and deeper that -- than could have been anticipated. The international steel companies, many are struggling to respond fast enough to the dramatic change in the business environment since 2018.

For ArcelorMittal South Africa, this has necessitated an intense focus on cash preservation, having realized less -- just less than ZAR 2 billion from working capital, sustainable cost reductions in controllable costs, which we will discuss a bit more in detail later. We've also launched a strategic asset footprint review, targeting the establishment of an affordable asset footprint with an enduring competitive advantage and long-term sustainability. I will also give you some detail on that.

For 2019, liquid steel production fell by 13% to 4.4 billion tonnes, while sales volumes decreased from -- by 8%, and that was mainly due to weak domestic demand. In line with lower sales volumes and at ZAR 41.4 billion, revenue was 9% down against the previous year. Our cash cost per tonne increased by 12% on the sharp rise in iron ore prices as well as increases in electricity, rail and port tariffs.

The business transformation program that was launched in the second half of 2018 and we're targeting more than a $50 per tonne sustainable cost savings and EBITDA improvement. I'm proud to report that in this financial year, we have realized ZAR 1.5 billion in savings, which equates to $24 per tonne. So cumulatively adding the continued savings of 2018, we are now at an improvement of ZAR 2.1 billion or $36 per tonne.

In response to the difficult trading conditions, a significant 12% or around ZAR 1 billion of fixed costs were saved compared to 2018. Of that amount, around ZAR 460 million is included in the above ZAR 1.5 billion. For the year, a ZAR 632 million EBITDA loss was recognized against the ZAR 3.6 billion profit in 2018. Once-off and impairment charges of ZAR 2.3 billion were booked. That was mainly on severance packages for the Section 189 as well as costs under the closure of Saldanha Steel Works and the impairment of fixed assets for Newcastle as well as the template at Vanderbijlpark.

Compared to a ZAR 968 million headline profit in '18, the company posted a headline loss of ZAR 3.3 billion. Despite aggressive focus on cash generation and the net debt increased by ZAR 2.9 billion from ZAR 475 million to ZAR 3.4 billion. Importantly, ZAR 1.5 billion of that increase represent additional support provided by the parent company in converting or capitalizing viables to date.

A large-scale labor reorganization announced in July 2018, that was largely completed in the end of the year. Some of the activities spilled over to January. During the strategic asset footprint review that we've announced at the end of September, Phase 1 conclude the closure, the ordering and commercial wind-down of Saldanha Steel. On the second phase, that was mainly focused on long steel production businesses. This space has also been concluded and the conclusions and decisions that was reached is that the closure of significant long steel product plants is not anticipated in the foreseeable future subject to the achievement of targeted cost savings in those businesses. The primary steel-making operations will continue at [Vanderbijlpark] Newcastle, although only focusing on servicing the domestic and the Africa overland market.

During this process, a company-wide operating model reconfiguration was identified. That would target additional reduction in fixed cost and will be affected during this year. Balance sheet will be strengthened through certain targeted corporate initiatives.

Looking at safety. Safety remained the company's #1 priority. Notwithstanding our intention to achieve 0 harm and injury, regrettably, we had a fatality at Newcastle Works in October last year. The Board and management have extended their deepest condolences to the family and the colleagues of the deceased.

Creating a consistent safety culture with clear accountability is one of the driving themes for the coming year. On the positive note, though, is our lost time-injury frequency rate, improved from 0.53 to 0.44, and our all-injury frequency rate improved from 6.91 to 6.57. Both of these matrixes has recorded the best-ever performance in the history of the company.

Looking at the global markets. Internationally, the geopolitical landscape have changed significantly from 2018. The EU and the USA are seeing the -- contract -- contraction, especially in the engineering, machinery and automotive sector, while Brazil's growth is beginning to fall. Safeguard duties in the EU were unsuccessful in curbing imports and we saw Turkey and India have significantly increased their levels of export. The correlation between steel prices and the raw material prices has broken down. The size of the dislocation is very unusual, and although we've seen some moderation recently, the dislocation continue.

Despite the challenging demand situation in the world, global crude steel production increased to 1.8 billion tonnes, which is 3% higher than 2018. Of that, China steel production increased by about 7% to almost 1 billion tonnes and increasing China's market share of the world's steel production from 51% to 54% year-on-year. The EU's output has declined by some 5%, while the U.S. remained fairly flat year-on-year. Benchmark, China -- Chinese rebar and hot-rolled coal prices declined by 10% and 13%, respectively, while international raw material basket has increased by 5% with iron ore in that basket rising by 54%.

Turning to South Africa. Falling net exports, marginal real growth, higher real interest rates and rising national debt levels all resulted in a forecasted 2019 real GDP growth of a mere 0.3% for the domestic economy. So unsurprisingly, our balanced steel consumption decreased by 6% to 4.5 million tonnes compared to 4.6 million tonnes in 2018. Interesting, if you look at the last 10 years, in 2018, just before the global financial crisis, since then, local steel consumption has decreased by 27% off a base of 6.3 million tonnes at the time.

Total steel imports for the year increased by 15%, with major countries from which imports are being made are China, Europe, Japan, Russia and Taiwan. In September this year -- last year, ITAC made an assessment that Russia no longer qualify for exemption from the safeguards on hot-rolled products. This decision is still not been or gazetted or implemented. Imports now constitute 20% of South African's partner steel consumption, up from 16% in the previous year.

In this context, our liquid steel production fell by 13% from 5.1 million tonnes to 4.4 million tonnes, reflecting the -- mainly the weaker demand in the domestic market but also a planned repair in Vanderbijlpark. Total sales volumes fell by 8% to 4.1 million tonnes. That was mainly due to an 11% reduction in domestic sales. Export sales, largely flat year-on-year.

As I've already mentioned, benchmark China rebar and hot-rolled coil prices fell by 10% and 13%. In dollar terms, this contrasts to a 9% fall in the company's steel prices across the entire product range. In rand terms, however, prices remained stable year-on-year as the dollar-rand exchange rate weakened on average by 9%.

Turning to the major input costs. Our raw material basket represents 51% of our total production costs, slightly up from the 50% in the previous year. Pleasingly, in dollar terms, our basket increased by 3% against a 5% increase in international basket. However, it is -- in rand terms, it increased by 12% and that was mainly, as previously stated, as a result of a substantial increase in iron ore prices.

Unaffordable increases in electricity, port and rail tariffs resulted in an additional cost for the year of ZAR 439 million against 2018, let's remember this is often already inflated and uncompetitive base price.

Looking at our flat steel operations, liquid steel production decreased significantly by 19% to 2.9 million tonnes resulting in a substantially lower plant utilization at 69% against 85% in 2018. This is due to the company adjusting production volumes to align with local demand. Blast furnace B at Vanderbijlpark, interesting, that's the largest blast furnace in Africa with a capacity of 5.1 kilotonnes of liquid steel per day. That was successfully repaired. The major repair in the first half of last year to extend the life of that furnace by another 10 years.

Despite having to reduce production levels, several significant efficiency improvements were achieved while inroads were also made in new product developments, notably in the area of thin gage rolling and coating. For flat, local sales volume decreased by 8% to 2.1 million tonnes, while export sales fell by 31% to 594,000 tonnes. The loss-making template plant was closed in Vanderbijlpark. That was because we could not reach an agreement on sustainable volumes and sensible prices with stakeholders. So that's unfortunate that thin plate production in South Africa will disappear.

Long steel side of the business. In January '18 -- '19, we've successfully restart the electric arc furnace at the Vereeniging Works. We were also able to keep it operational despite major challenges from electricity load shedding as well as high increases in tariffs. At our long steel business, liquid steel production fell marginally by 1% to 1.5 million tonnes. And as with flat, plant capacity utilization decreased to 66% from 81% in the previous year.

Local sales volumes decreased by 18% to 902,000 tonnes, while export sales increased by a significant 85% to 551,000 tonnes to reduce inventory and to generate cash especially in the last quarter. Significant breakthroughs has been made in Newcastle to enable the blast furnace to responsibly operate at lower production levels. These were previously thought to be impossible. Newcastle also pilot a new outbound logistics process in H2, improving on-time delivery by 14.5%. A problem for Newcastle is that due to its geographical location, it remains severely impacted by unaffordable high logistical cost, and addressing that from a sustainability perspective is vital for us.

Looking at the Coke & Chemicals side of the operations, commercial market coke production increased by 4% to 191,000 tonnes, while sales volume decreased by 4% as the ferrochrome smelters were negatively impacted by load shedding, amongst other factors. Weak steel market conditions and the resultant lower steel capacity utilization allow the redirection of metallurgical coke-making capacity at Newcastle to supplement commercial market coke production in the second half of last year, and this will continue for the full year. Byproduct monetization will also be a key focus for this year, and I'll explain a bit more on that later. Desmond will now take us through the finances, and I'll come back to conclude.

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Avinash Maharaj, ArcelorMittal South Africa Ltd - Executive Director [3]

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Thank you, Kobus, and good morning, ladies and gentlemen. Compared to the corresponding period, revenue was down 9% to ZAR 41.4 billion. Lower sales volumes, together with the sharp rise in raw material prices, resulted in an EBITDA loss after once-off items of ZAR 632 million, representing a ZAR 4.2 billion reduction over 2018. Domestic volumes declined 11%, while exports reduced by 1%, negatively impacting our EBITDA by ZAR 1.3 billion. Weaker steel prices, after stripping out the impact of exchange rate movement, impacted profitability by ZAR 3.4 billion with higher raw material prices having an impact of ZAR 2 billion, mainly driven by the higher iron ore prices with an increase in electricity, rail and port costs contributing ZAR 439 million, as alluded to by Kobus. This was partially offset by an exchange rate that softened from 13.24 in 2018 to 14.45 in 2019, contributing positively ZAR 2 billion to profitability. Cost savings from the business transformation program contributed a further ZAR 1.45 billion. Included in the total EBITDA loss after exceptional items of ZAR 632 million is a Saldanha loss of ZAR 757 million.

The EBITDA loss of ZAR 632 million is unpacked as follows: Flat steel products reported an EBITDA loss of ZAR 574 million. This represents a decrease of ZAR 3.4 billion over the corresponding period. Total shipments declined by 439,000 tonnes with domestic shipments reducing by 177,000 tonnes and exports by 262,000 tonnes. Average net sales prices, in rand terms, increased by 1%.

Long steel products reported an EBITDA loss of ZAR 369 million, representing weaker performance of ZAR 1.2 billion over the corresponding period. Prices in rand terms decreased by 3%, with exports declining by 9% and local prices, again in rand terms, increasing by 5%. Total shipments increased by 60,000 tonnes, of which exports increased by 253,000 tonnes partially offset by shipments -- by local shipments, which declined by 193,000 tonnes.

Our Coke & Chemicals business reported an EBITDA of ZAR 250 million substantially lower by ZAR 120 million. Sales volumes of market coke declined by 6,000 tonnes, while sales prices were lower by 10%. We report a headline loss of ZAR 3.3 billion. This is weaker when measured against the previously reported headline profit of ZAR 968 million. The loss from operations of ZAR 2.4 billion is lower against the previous operating profit of ZAR 2.8 billion.

Included in the operating loss are once-off items relating to the wind-down of Saldanha Works to the value of ZAR 396 million, restructuring costs in completion of Phase 1 of the business resizing to the value of ZAR 234 million, net realizable value adjustment on inventories of ZAR 267 million and normal depreciation charges of ZAR 819 million.

The net borrowings of ZAR 3.4 billion increased by ZAR 2.9 billion when compared to December 2018. We utilized ZAR 1.5 billion in operations in 2019. Strict working capital management resulted in a release of ZAR 1.9 billion, mainly from inventories being lower by ZAR 3.4 billion, receivables lower by ZAR 1.2 billion and lower payables of ZAR 2.9 billion. Metal stocks reduced to a low level of 464,000 tonnes, a reduction of 287,000 tonnes during the year, adjusting to weaker market conditions.

We incurred ZAR 244 million in finance costs, which is lower by ZAR 237 million against the prior period, mainly due to lower average net debt. ZAR 1.4 billion was utilized in capital projects, which I will cover a little later.

The group, the ArcelorMittal group, our parent company, continued to support us with the conversion of various group charges to a long-term limited period noninterest-bearing loan.

Capital expenditure of ZAR 1.2 billion is ZAR 132 million lower than the corresponding period, with 78% being spent on sustaining operations, 13% on environmental projects and the balance and strategic projects to enhance quality and margin.

Key investments completed in 2019 relate to the blast furnace, the interim stave repair at Vanderbijlpark, the coke oven battery v4 bracing, end flue and roof repair, coke oven V8 waste gas channels repair and the galv line 3 and 5 quality improvements related to coating and finishing. Further, several environmental projects were completed, while the waste gas coke cleaning plant project was initiated in 2019.

In Newcastle, the coke oven battery N2 through-wall rebuilds were completed while the Vaal Melt Shop was restarted in Vereeniging. Capital expenditure will continue to be guided by the business transformation program, adhering to the discipline of operational sustainability and securing our market strength to targeting high return and niche opportunities.

And finally, before I return you back to Kobus, who will elaborate further on our area -- on our focus areas for sustainability and growth, I'd like to just express my appreciation to the various members of the finance, strategy and other commercial teams, together with the plant, for the extraordinary effort in preparing the financial results and various documents. Your efforts are commended. Thank you very much. Kobus?

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Hendrik Jacobus Verster, ArcelorMittal South Africa Ltd - Director [4]

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Why didn't you thank me for something? Some more detail on Saldanha. As I said, we've took -- taken the difficult decision to wind down the operations there and place the plant in care and maintenance. So the labor consultation was completed in January. We've already shut down the -- part of the upstream operations, and we believe that the full operation should be closed by the end of the first quarter. We've also started to look at feasibility of relocating all or parts of the steelmaking melt shop and rolling mills to Vanderbijlpark. All serious and viable commercial options for the future of the plant will be considered.

Just also some more detail on the longs product. As I said, we've done a study in looking to concentrate all liquid steel production at Vanderbijlpark, closing the upstream at Newcastle. The conclusion of that was the disruption to the market will be substantial in many products not being produced in South Africa, and we've taken the decision there not to close any plant and to continue with the upstream liquid steel production. However, during the process, it became evident to us that the sustainability -- longer-term sustainability of Newcastle will still require additional compressing of cost.

It also assisted us in a company-wide process to move to one organization, which we will implement in this year, targeting additional fixed-cost savings. As we said, previous year-on-year, we've already compressed fixed costs by ZAR 1 billion. And remember, this is sustainable and continued savings. Key for Newcastle, obviously, is to continue to discuss with stakeholders how to address the structural disadvantages that the plant have.

Looking at the raw material cost base and some corporate initiatives. There are pockets of opportunities for cost-linked raw material supply, and we will continue to pursue that to reduce our longer-term dependency on expensive raw materials. During the second half of '19, we began the process of reclaiming iron ore volumes from the Thabazimbi mine. Although small volumes, the removal of materials also help in the process of the rehabilitation of the area, and it gives us time to look at potential opportunities for long-term supply from the Thabazimbi area.

In the last quarter of last year, the company also began a structured process to identify co-investors for its commercial market coke business. We have received nonbinding offers in this regard, and we'll progress that in H1. We also hope to conclude a partnership with interested parties to cap and reduce the byproducts generation and disposal footprint. These initiatives target the monetization of byproducts such as blast furnace and steel slag.

Good progress has been made to the conditions precedent associated with the acquisition of the Highveld Structural Mill. We're also in discussions in -- with regard to mainline production. However, it's still too early to assess the prospects of success on those discussions.

Important to note that the company's strategy of becoming cost-competitive in the short term with a medium-term objective of sustainability and growth has not changed. Market conditions and other macro circumstances have necessitated realignment and reprioritization in the immediate and short term. We have demonstrated real and sustainable cost savings, and these actions will continue with specific focus areas in 2020.

In 2020, cash, costs, customer, collaboration, climate, communication, the 6 Cs, as we refer to them, will be vital enablers for our now familiar transformation for sustainability and growth. Achieving our business transformation targets, implementing the one organization initiative, progress on the structural cost-link and developmental pricing initiatives and enabling with key shareholders to -- engagement with key shareholders to normalize some of the regulated prices. That will be supportive of the cost drive. Service, quality and differentiation to competitors characterize some of the focus areas on the customer.

Strategic alliances, product development, platforming and knowledge sharing and the collaboration initiatives and then straightforward mature and regular communication with all us, the company's stakeholders, importantly, including our employees, will be key to create an engaging environment, especially post the Section 189 environment, also vital for the implementation of the one organization. And all of these factors will assist us in generating more cash, allow the company to improve its balance sheet.

On the outlook, internationally, margins have been tightly squeezed, though elements of normalization are becoming evident. Expect that low growth domestically will require some additional short-term interventions. The initiatives we've mentioned earlier that will place the company in a better position when the next upturn come. As always, the dollar-rand will have a significant impact or can have a significant impact, either positive or negative, on our results.

So in conclusion, I can say that we have implemented actions that we've guided previously, and we will continue to do that. And thank you for joining us today, and I will now take questions. [Jan], where are you? You have one. Okay. Do you want a mic?

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Questions and Answers

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Unidentified Analyst, [1]

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The amount of closures in operating areas has been really quite significant, and it's continuing the pace by the look of it. You've had inventories run down. There has to be a time at some stage, where we've got to have a turnaround and start-up and a ramping up. Hasn't so much been closed down, that ArcelorMittal may, in fact, have been putting itself outside of future production potential.

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Hendrik Jacobus Verster, ArcelorMittal South Africa Ltd - Director [2]

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All right, [Jan]. And I think if you look at -- I mean, Saldanha is a specific case in point. So it's designated for export market. It's structurally impossible to make money with it if there's no change in the fundamentals. So that will have a fairly limited impact on production -- on servicing the local market. For the immediate -- for 2020, Vanderbijlpark is increasing volumes. So trying to maximize the footprint of that and service the domestic market, which was previously serviced by Saldanha Steel.

So flat products, we will still service the domestic market, and as well as Africa Overland, and we still have within our assets some capacity, or ability to increase, should the market improve. So I don't think it's a question of shorting the market. It's a question of not directing production to exports, which is not profitable and size the organization according to that capacity.

From a Newcastle perspective, as I've said, the team there has been able to adjust the operating philosophy and run the plant at 60%, which was previously not thought possible. So we're servicing the domestic market. We're servicing the Africa Overland market. We have a bit of capacity available if we want to grow that, and we redirect some of the coke-making capacity to the more profitable commercial coke market.

So from a supply perspective, we still supply, and we've actually increased through starting the electric arc furnace, where that thing can also be ramped up from 100,000 tonnes to 300,000 tonnes. So there's some room if opportunities arise.

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Unidentified Analyst, [3]

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May I ask another question? It's a social question. With the amount of closures that there have been, and I couldn't quite calculate the total number of workers who are looking for alternatives now. What do you feel about your social conscience? And are you really able to do anything about reemploying these people? And at what cost if so?

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Hendrik Jacobus Verster, ArcelorMittal South Africa Ltd - Director [4]

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Yes. I think if you look at the first Section 189 was a corporate-wide restructuring where we've affected just over 1,000 positions, and we've released 700 own people. We calculate on an indirect basis or subcontractors -- not indirect, subcontractors. It was probably another 800 people. In terms of Saldanha, the impact would be, own people, about 450, about the same number of subcontractors.

Difficult decisions to make. If you look at the performance of the company and if you look at the performance on the profitability over the last 10 years, we have to look at the sustainability in creating employment for the remaining 9,000 people. Also important is, to the extent that we have social investment programs like our soup kitchens, our training and all of those things, we largely continue with those activities and interventions around our operations despite not making money, but...

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Unidentified Analyst, [5]

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Interesting priorities.

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Hendrik Jacobus Verster, ArcelorMittal South Africa Ltd - Director [6]

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Thank you. Anything else?

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Kabelo Moshesha, Renaissance Capital, Research Division - Junior Research Analyst [7]

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This is Kabelo Moshesha from Renaissance Capital here. I just have a few questions, first one being on your PCI technology that you're implementing at both your flat and long steel operations. Is this using thermal coal? And at what rates are you getting these volumes at?

And at the same time, what is the potential savings you're going to see from this? On your payables, the question would be what -- in the current -- when your cash generation was under pressure, what was the drive for you to reduce your payables? Was there forced shorter terms at your creditors? And then the last one, given the announcement on -- around Mr. [Montage's] provision to generate your own electricity, given the backdrop of rising tariffs and carbon taxes, do you have any plans or any initiatives around that?

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Hendrik Jacobus Verster, ArcelorMittal South Africa Ltd - Director [8]

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All right. I'll talk to the payables and electricity and I'll ask Jake to talk to PCI. This is higher grade stuff for me. I think from a payable perspective, over the last 18 months, most probably, we had a program of extending payment terms that was shorter than 30 days to 30 days and mostly 60 days. So we try that, and we'll also put in some supply of finance intermediate between us and other suppliers to create that extended terms, but not specifically then impacting us or them directly.

I mean, we had a -- we had and are continuing with the drive of all subcontractors to review all contracts and to drive out a targeted saving on all of them, which include also extended payment terms. You will see in our note, we've also had discussions with the competition commission on a different repayment profile for our obligation to them. In terms of electricity, I think we are one of the heavy energy users. I think most probably at a place like Vanderbijlpark, we will have the potential to increase solar maybe by 75 to 100 megawatts.

We've got the space around the plants available. So typically, I think those are the investments that we might pursue. And then obviously, I think our drive from an energy perspective is to reduce our consumption to improve our efficiencies, and we have also, subject to availability of capital, the potential to add another 30,000, 35,000 megawatts from own generation through gas and those type of opportunities. Jake, would you try and explain the PCI?

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Jake Olivier, ArcelorMittal South Africa Ltd - Chief Operations Officer [9]

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Firstly, PCI is not something new. It's something that's been in operations and in use for almost 2 decades now. I think Newcastle started with it in 2006 where it was implemented. Our aim is to improve the use of PCI, because PCI in terms of your fuel rate, it supplements coke -- the use of coke. So the more PCI you use, it's cheaper than coke. But also, it gives us more coke available, which we that -- channel to the market coke in terms of market coke production and seller's market coke.

So the improvement is typically at Newcastle. They struggle to get about 140 kilograms per tonne of PCI use. They're now at the levels of 165 pushing for 170. Vanderbijlpark actually achieved some benchmarks on blast furnace C when blast furnace D was off. They reached for a week, 220, which is in the group actually now the new benchmark. But the trick is to have it consistently high usage of PCI.

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Hendrik Jacobus Verster, ArcelorMittal South Africa Ltd - Director [10]

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Any last question? If not, once again, thank you for making the time. And enjoy your time in traffic going back. Thank you.