Summary of Conference Call Notes Industry Overview - **Industry Focus**: Greater China Materials, specifically alumina and copper smelting industries [1][2] - **Regulatory Body**: National Development and Reform Commission (NDRC) [1] Key Points NDRC Policy Initiatives - NDRC has released a document promoting the development of traditional industries, including basic materials and major equipment [1] - The report emphasizes the need to strengthen management and optimize the layout of the alumina and copper smelting industries [1] - Encouragement for leading industry players to engage in mergers and acquisitions (M&A) to enhance production scale and competitiveness [1] - Promotion of new mine resource investigations overseas and improved scrap utilization in the domestic market [1] Alumina Market Insights - Current alumina prices are under pressure due to higher supply, with constructed capacity at 110 million tonnes (mnt) and a utilization rate of 84% [2] - Demand in China is essentially capped, leading to expectations that the new policy may constrain new planned alumina capacities [2] - Anticipation of capacity consolidation benefiting industry leaders such as Chalco and Hongqiao [2] - Despite consolidation, large approved capacities in the pipeline may continue to weigh on alumina prices into 2026 [2] Copper Smelting Market Insights - New copper smelting capacity is expected to be impacted by tighter policy controls [2] - Lower annual Treatment Charges/Refining Charges (TC/RC) prices and long-term contract concentrate volumes may lead to production cuts for refined copper in 2026 [2] - Solid demand is expected to support copper price fluctuations at high levels, benefiting companies like Zijin, CMOC, MMG, and JXC [2] Additional Insights - The report indicates a cautious outlook for new investments in alumina and copper smelting due to regulatory constraints [2] - The potential for M&A activity in the industry could reshape competitive dynamics and market leadership [1][2] - The overall industry view is considered attractive, suggesting potential investment opportunities in leading companies within the sector [4]

Group 1 - The core viewpoint of the article highlights the expected production timeline for alumina in 2026, with a total of 11.6 million tons projected to come online, primarily in the first half of the year [1] - Guangtou Beihai is set to produce 2.4 million tons of alumina, expected to start production between February and April 2026 [1] - Dongfang Hope Beihai will also produce 2.4 million tons, with production anticipated from April to June 2026 [1] - Other significant projects include Guangxi Nanning and Thai (2.4 million tons, April-May 2026), Xinjiang Tebian Fangchenggang (2.4 million tons, June-July 2026), and Chalco Shanxi New Materials (1 million tons, expected in May 2026) [1] - The second phase of Jinjiang Indonesia is expected to produce 1 million tons, with production starting between March and April 2026 [1] Group 2 - In 2025, overseas alumina production capacity is expected to increase by 3.8 million tons, with Indonesia contributing 5 million tons, including 2 million tons from Nanshan, 2 million tons from Jinjiang Phase I, and 1 million tons from Mampa Wa [1] - This increase contrasts sharply with the previous reduction in overseas alumina production capacity observed in 2024 [1] - Alcoa's alumina plant in Kwinana, Australia, will permanently cease operations due to high costs, impacting 1.2 million tons of capacity in 2025 [1]

Core Viewpoint - Rio Tinto plans to reduce output at its Yarwun alumina refinery by 40% starting October 2026 to extend the plant's operational life to 2035, amounting to a reduction of approximately 1.2 million tonnes of alumina annually, while ensuring customer supply commitments remain unaffected [1][2]. Company Summary - The decision to cut production is described as difficult but necessary, aimed at preserving future options for the site and maintaining its economic contribution, with substantial investment required for the refinery [2]. - High costs related to power, labor, and capital are challenging alumina processing in Australia, compounded by increasing low-cost supply from Indonesia and China, which is pressuring margins [2]. - The current alumina prices are significantly lower than the peak of $800 per tonne experienced last year, with Rio's production cut representing only 1% of the global alumina market, which is approximately 140 million tonnes [2]. Industry Summary - Alumina prices have been under consistent downward pressure due to increased domestic capacity in China and other parts of Asia, with the CRU's Atlantic Basis Price index recently assessed at $340 per tonne, nearing its low of $334 per tonne [3]. - The reduction in output at the Yarwun refinery is driven by tailings-storage constraints, with the existing plant expected to reach capacity by 2031 at current production rates [4]. - The cost of constructing a second tailings area is deemed unviable in the current market conditions [4]. Operational Impact - The output reduction will provide Rio Tinto with an additional four years to explore alternative technical solutions for the refinery, as previous studies on site engineering improvements have been financially daunting [5]. - The reduction will not affect the company's bauxite mines or aluminum smelters, which will continue to operate at full capacity, although approximately 180 of the refinery's 725 jobs are expected to be impacted [6]. - The company plans to utilize the time from the output reduction to test various tailings-management options to extend the life of the existing storage footprint [6][7].

Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: Aluminium and Alumina - **Geographical Focus**: Indonesia, China, India, and global markets Aluminium Market Insights - **Supply and Demand Outlook**: - Primary aluminium demand growth is expected to be around 2.5% for 2024/25, slightly below the trend of 3-4% [2] - Supply growth is anticipated to match demand, leading to a modest surplus in the global aluminium market [2] - Limited supply growth is expected due to China smelter run rates being at the 45 million tonnes (mt) cap, with potential projects in Indonesia, India, Middle East, and Africa contributing modestly over the next 2-3 years [2][8] - The LME price is above the cost curve, indicating an improving supply and demand outlook [2] - **Investment Recommendations**: - Preferred stocks for aluminium exposure include Hydro and Press Metal (BUY) while Alcoa and S32 are rated Neutral [1] - **Medium-Term Price Risks**: - Limited scope for the industry to quickly lift supply when demand improves, resulting in tighter markets and medium-term price risks skewed to the upside [2] Alumina Market Insights - **Price Trends**: - After a sharp decline in the first half of 2025, alumina prices have bounced back, trading between $370-380 per tonne [3][41] - Prices are expected to remain anchored to the cost curve due to significant overcapacity in China and additional supply from Indonesia and India [3][41] - **Supply Outlook**: - China is expected to add 7-10 million tonnes of new capacity in 2025, contributing to overcapacity [3] - Approximately 6 million tonnes of projects are ramping up in Indonesia, with an additional 2.5 million tonnes in India [3][35] Indonesia's Role in Aluminium Supply - **Capacity Additions**: - Indonesia is expected to be a significant contributor to global supply growth, with 2.2 million tonnes of new aluminium supply projected over the next 3-4 years [10][22] - Current projects in Indonesia are constrained by insufficient land and power, limiting overwhelming growth in supply [10][15] - **Power Constraints**: - Aluminium smelting is power-intensive, requiring approximately 15 terawatt-hours (TWh) of power for 1 million tonnes of capacity [11][13] - The planned 2.2 million tonnes of aluminium smelters would consume about 40% of the power currently used by the nickel industry, necessitating a 10% growth in national power output over 3-4 years [13] Risks and Considerations - **Alumina Supply Risks**: - The combination of additional supply from Indonesia and overcapacity in China is likely to limit sustainable upside in alumina prices [3][41] - Potential disruptions in bauxite supply from Guinea could create upside risks for alumina prices, but sustained tightness is not the central case [34] - **Market Dynamics**: - The aluminium market is closely monitoring the evolution of Indonesia's industrial parks and smelter project pipeline, with measured growth in aluminium supply expected rather than overwhelming growth [15] Conclusion - The aluminium market is characterized by limited supply growth and a positive fundamental outlook, while the alumina market faces challenges from overcapacity and price volatility. Indonesia's role as a growing supplier is significant, but power constraints and project development challenges may temper expectations for rapid supply increases.

ZESTY Technology and Funding - Calix has secured a grant agreement with ARENA for $44.9 million to fund up to 50% of the ZESTY Demonstration Plant Project in Australia[43, 46] - The total project budget for the ZESTY demonstration plant, including commissioning and initial testing, is estimated at $90 million[44] - ZESTY is protected by 12 patent families[132] Market Opportunity and Drivers - The iron and steel industry accounts for up to 8% of global CO2 emissions[76] - Countries representing 78% of global GDP have net-zero commitments, driving demand for low-emission technologies[76] - The estimated total addressable market for ZESTY is projected to grow to approximately 790 million tonnes per annum (MT pa) of DRI by 2050[137, 162] ZESTY's Competitive Advantages - ZESTY's technology targets a low hydrogen consumption approach, aiming for the theoretical minimum required for reduction[132, 143, 161] - Pilot testing of ZESTY has achieved metallisation degrees ranging from 70% to 98%[143] - The estimated production cost of green HBI using ZESTY is between US$390 and US$500 per tonne[143]