Rana Gruber ASA (RANA) Earnings Call Transcript

Yes. Good morning, and welcome to our Annual Capital Markets Day and third quarter presentation. My name is Vegard Nerdal, and I'm Investor Relation at Rana Gruber. I'm happy to see all of you here today. And we also know that we have several attendees online, and a great welcome to you as well. Before we kick it off, I will run through the agenda and the logistics for today. To start, our CEO, Gunnar Moe, will give you an introduction to Rana Gruber and our new ambition for the upcoming years. Then our CFO, Erlend Høyen, will give you an update on our third quarter results and then go more into detail on our capital allocation and our strategy for our shareholder value creation. Following this, we are very happy to yet again, host our friends from Cargill, who will give an update on the global iron ore markets and their view on the changing dynamics for the industry. After that, we will take a 10-minute short break so we can have some coffee and light snacks before we leave the floor to Stein-Tore, our Chief Operating Officer. He will take us through our resources and key operating -- operational updates, before Gunnar will round it off with our strategic rationale and implementation for a new high-grade ambition. At the end, we will open for questions. If you're watching online, you can submit your questions through the player. After the event, we have some light lunch just outside, and you have the opportunity to talk with the management in Rana Gruber as well. So with that, I will leave the floor to you, Gunnar.

Thank you, Vegard, and good morning to you all. I want to start by welcoming you to Rana Gruber's Capital Markets Day and also the update on the third quarter results. As Vegard has already mentioned, my name is Gunnar Moe. I'm CEO and have been CEO for maybe too many years. And I'm very happy that we have our strategic partners from Cargill here as well, that's important for us. It's a pleasure for me to see you here today and to have the opportunity to give you a deep dive into our company, our strategic priorities, operational development plans for the future. There is a key word that I want you all to remember when you leave this room today, and that is high grade. Today, we announced our vision to become a producer of high-grade iron ore, above 67% Fe content, and we will do this before the end of this decade. Throughout our presentation, we will showcase our strong operational capacity, the attractiveness of our unique and local iron ore and why moving to high-grade iron ore production is the only path forward. I look forward to tell you more about all this today. As an important supplier for European steel mills, Rana Gruber's high-quality iron ore plays an important role in building the world. No doubt about it, the world needs steel as instrumental building blocks in modern society as we know it today. Our product is a key input factor in the process of making cars, buildings, bridges and other essential infrastructures. However, the steel industry is one of the biggest emitters globally. It accounts for up to 10% of global emissions. Both steel mills and the entire value chain must work on reducing the carbon footprint to meet critical decarbonization targets. The most important thing we, at Rana Gruber, can do to enable this transition is to supply the steel industry with iron ore with higher iron content. This makes it possible for steel mills to substantially lower their emissions. Delivering high-grade iron will position Rana Gruber as a preferred partner for the steel industry, creating long-term value while supporting a more sustainable industrial future. Many of you know us well. Rana Gruber has been listed on Euronext Oslo since 2021, and we remain the only iron ore producer in Norway and also the only listed company in our segment. In short, we produce 2 types of iron ore concentrates, hematite and magnetite, with an annual production capacity of 1.85 million tonnes. Our operations are based around the city of Mo i Rana with operations both underground and in open pit mines. In over 60 years of continuous operations, we have consistently worked to advance a more sustainable mining and steel industry. This is also why we are now moving toward high-grade production. The transition to high grade is happening now, and we are in a pole position to capitalize on the shift in demand from lower grades to higher grades. I'm sure our friends from Cargill will share some more insight into what we often refer as to the race to grade. Put simply, demand for high-grade iron ore is expected to grow rapidly as it becomes a must-have input for green steel production. So how does this work? To reach net zero emissions by 2050, steelmakers must switch away from traditional coal-based blast furnaces and shift toward more efficient and sustainable direct reduced iron technology, or DRI, as it's called. However, DRI technology requires a higher grade iron ore than what is used in the blast furnaces today. And our ambition is to move up amongst the top-tier iron ore producers in the world. As you can see from the chart on the right-hand side, the majority of volumes are lower and medium grades. We aim to be amongst the single-digit lead offering high-grade iron ore. Rana Gruber has already started the journey toward higher grades. Our main strategic priority in the past few years has been to lift our iron content to 65% or Fe65. And I'm pleased to announce that we now are producing iron ore above 65%, and we do this on a stable pace for the first time ever. I also want to take a moment to explain how this impact our pricing. The standard benchmark for iron ore prices today is the Fe62 index, reflecting the quality of the iron ore. For every percentage point our iron exceeds this benchmark, we earn a premium of around USD 1.7 per tonne. This has lifted our realized prices in a volatile market and strengthened our financial position. To put it simply, the investment of Fe65 is already paid itself back in full and then some. But there is still a gap between our current realized prices and the next benchmark, the Fe65 index. We expect the majority of our volumes to be linked to this index during 2026, which will significantly improve price realization. And while reaching Fe65 is a significant milestone, we are not taking our foot off the pedal. As I mentioned earlier, we set the bar high and our ambition is clear. By 2029, Rana Gruber aims to be a world-leading producer of high-grade iron ore. This will meet the evolving needs of our customers and make Rana Gruber a key strategic partner for European steel mills in the years to come as they transition to greener production methods. I will go more into the details of this later in today's presentation. But to summarize, we are taking advantage of a segmented and split iron ore market, while at the same time, responding to the needs of our customers. Also, the global iron ore benchmark will shift from Fe62 to Fe61. This reflects a broader trend. The average quality of iron ore globally is declining, largely because of grade degradation among major iron ore suppliers, especially in Australia. At the same time, very few miners are actually able to supply high-grade iron ore, simply due to the nature and character of their resource. This means that supply is very limited, while demand is set to grow. So this is a clear opportunity to strengthen our competitive position and supply the high-grade iron ore that steel makers need for new low-emission technologies. And even though the global supply of iron ore is already limited, it is especially the case for high-grade supply near European steel mills. At Rana Gruber, we are very fortunate to have the geographical location we have. This positions us within just a few sailing days from our customers in Europe. We have, over time, strengthened our customers' relationship with European steelmakers, enabled by our high and improving quality, close proximity and reliable supply, supported by our strong partnership agreement with Cargill, which is a leading global commodity trader. So how -- who are our customers and where does iron ore from Rana Gruber end up? Rana Gruber covers the mining, transportation and processing part of the iron ore value chain. However, our 2 main products follow 2 different routes. Our hematite product follows our offtake agreement with Cargill, with customers among the European steel mills. Magnetite rich on iron is sold by us to specialized industries ending up in the water purification industry. With this backdrop, let's look at how this translates into performance. Our capabilities and value proposition have materialized in solid results over time. On the production side, we deliver close to the production capacity of our current infrastructure. At the same time, and I want to emphasize this, we have been able to increase the quality of our product significantly by increasing the iron ore content. Most minors face a trade-off between product quality and volumes. But our efficient production, combined with the properties of Rana Gruber ore, as Stein-Tore will tell you more about later, has proven that we can increase production volumes and quality at the same time. This has also generated good profitability. And while we're exposed to shifting market prices of iron ore, we have delivered solid financial results which also have yielded good returns for our shareholders. With that, I want to hand it over to our CFO, Erlend Høyen, who will take you through a brief summary of our third quarter results. Thank you so far.

Thank you, Gunnar, and good morning, everyone. My name is Erlend Høyen, and I am the CFO of Rana Gruber. I will first take you through the Q3 highlights that we presented earlier today before we move on to taking a more detailed look into our financial strategy, including capital allocations and our commitment to continued shareholder value creation. First, let's have a look at the Q3 results. We are pleased to report a strong third quarter where we see improvements across many areas and with important milestones reached on our strategic projects. We delivered solid operational results, with 472,000 tonnes of iron ore concentrate produced. And we saw cash costs continue on a positive trend in the quarter, supported by efficient operational performance. During the quarter, we also installed the final equipment for the Fe65 project, which has now lifted our current production output to above 65%. The Board of Directors has decided a dividend of NOK 1.6 per share for the quarter, corresponding to a payout ratio of 70%. And this marks the 19th consecutive quarter with dividends since our listing in 2021, highlighting our commitment to shareholder returns. Looking more closely at our operational figures for the quarter. We continue our strong track record with stable production volumes, producing 470,000 tonnes of concentrate in total. This is, as Gunnar has mentioned, in line with the previous quarter and in line with our annual capacity. Magnetite production is also increasing, and we are on track on reaching around 175,000 tonnes of magnetite this year. This is also in line with our strategic initiative to increase our magnetite production, and Stein-Tore will come back to this and give a bit more insight later on today -- in his presentation later today. We sold a total of 450,000 tonnes during this quarter. And the chart on the right-hand side displays the price development of our 2 main products. While magnetite prices have remained at a stable level, hematite prices have rebounded from the second quarter this year and lifted the revenues through the lagged price effect. Our revenues increased by 9% compared to the same period last year and ended at NOK 425 million, up from NOK 389 million last year. This was driven mainly by higher price achievements for both the hematite and the magnetite product as well as slightly higher sales volumes. Our total cash cost was NOK 262 million for the third quarter, which corresponds to NOK 556 per tonne produced. This is a notable decrease of 4.7% from the same period last year, which is a result of continuous focus on cost discipline. We reported adjusted earnings per share of NOK 2.28. And as mentioned, this resulted in a DPS of NOK 1.6 for the third quarter of '25. With that, I would like to present some more insight into our financial outlook, capital allocation and commitment to shareholder value creation. But before we move on, please note that the full quarterly report and the presentation will be available at our website. Starting with taking a closer look at our cash cost. Cost control has and will always remain a key priority for us. It is essential for us for delivering strong returns on capital and for supporting both our cash flow and our dividend potential. At last year's Capital Markets Day, we introduced a cash cost target of staying between $50 to $55 per tonne over time based on a fixed foreign exchange rate. Over the past 12 months, our actual cash cost landed at $56.3 per tonne produced. However, by correcting for the assumption of the fixed FX in our target, our cash cost for the last 12 months were $51.9 per tonne, a strong improvement from approximately $56 we had last year and well within our target range, driven by our cost improvements in Norwegian kroner. The reduction like-for-like cash cost base comes from several initiatives. We have brought more core activities in-house, such as tunneling and several maintenance tasks. And at the same time, we have been able to reduce the use of over time. We have also made many small step improvements and optimizations across our operations. And looking ahead at 2026, we are aiming to stay within our target range. This will, of course, be supported by the improvements already made over the last year, but also by continuing to fine-tune our production to improve our costs. Going over to CapEx and looking at our investments. Running a successful mining operation over time requires that we constantly invest into development, exploration and maintenance. This is to ensure that we minimize downtime and maintain our production levels as well as optimizing operations for the years to come. Over time, exploration enables us to uncover and develop new mining areas, such as the new open pit mine at Stensundtjern, which will be important for us moving forward in upholding our production output. We will also continue to explore and develop plans for other mining areas for both hematites and high-quality magnetite ores. In this graph, you see the recurring investment level that we expect to maintain over the upcoming years. And this is a sustainable level that allows us to deliver on our capital allocation priorities and maintain financial discipline, while keeping the flexibility to pursue additional strategic projects. A key priority for us in the next 3 years, as Gunnar had mentioned earlier, and which will be covered in more details in the last section of this presentation is, of course, the high-grade project. This project will enable us to secure a strong competitive position in the market, becoming one of the very few producers of high-grade iron ore globally. At the same time, we need to balance investments with our current operations to maintain production, while we gradually work to reach a higher grade, just in the same way as we have done in the 65 project. This means that we have to gradually phase in investments as we reach the necessary operational milestones. We will also continue to evaluate how the market evolves and adapt accordingly. The market and the demand for high grade will evolve and grow as our customers prepare for a more efficient production, which requires high-grade input. Importantly, just as in the 65 projects, as we deliver gradually higher production quality, our price achievements will also improve. High-grade iron ore sells at a significant premium. This means that the project is both strategic as well as financially appealing, with an attractive return on investments and short payback time, depending on the level of premiums that eventually we will be able to achieve. Another important strategic project we are pursuing, and which we presented in our Q2 presentation is the reactivation of the infrastructure at Storforshei. This infrastructure was used for the mining operations until the early '80s, where it was replaced by the infrastructure at Ørtfjell, which now supports both the underground mine and the open pit mines in that area. Now with the new open pit mine at Stensundtjern starting in early 2026, there are optionality -- operational benefits to bringing this infrastructure back online. Most importantly, it will reduce the transportation distance from the mine to the crusher, and it will lower the risk of disruption due to factors such as weather conditions. Longer term, having this infrastructure in place also provides us with strategic optionality related to other high potential deposits and smaller ore bodies in this Stensundtjern area. However, this infrastructure does not need to be in place immediately. When we start operating on the new mine, we will start by transporting the ore from Stensundtjern to the existing crusher at Ørtfjell, using the existing fleet that we have in place for the open pit operation. Stein-Tore will also provide some more details on this later in his presentation. Currently, we are waiting for clarity on potential public funding. This might reduce the total investment needed and improve the economics of the project. There are also some remaining uncertainties related to the integration of a new national rail signal system called ERTMS, a factor that may also influence the project time line. We have secured financing for the whole project, but we will not start until we have a clear picture of the total investment and outcome with regards to public funding. Still, this is an attractive and valuable option for us, which we will continue to pursue and hope to move forward with in the upcoming months, with more clarity expected on public funding by the end of this year. Moving over to cash flow. We continue to deliver strong operational cash flows driven by efficient operations and a stable production. Over time, we have been able to consistently fund our recurring CapEx needs over the cash flow, while we are able to maintain consistent dividend distributions. At the same time, we have the flexibility to fund additional strategic projects over our cash flow. And as we have shown in the Fe65 project, we have been able to finalize this project without compromising our financial position or shareholder returns. Looking ahead, we see additional upside when we get the full price realization of our 65 project, which improves our overall profitability and supports both our long-term value creation and our ability to continue delivering attractive returns. Looking at our balance sheet. We continue to maintain a very robust financial position and low leverage. Leverage remains at a low level, currently at 0.4x net interest-bearing debt to EBITDA over the last 12 months, while we have delivered on both our operational goals and capital allocation priorities. This gives us flexibility, both from our cash flow and our balance sheet, to increase leverage, if needed, to fund strategic projects that improve costs and create long-term value. At the same time, we stay fully committed to prioritizing shareholder returns in line with our dividend policy. Rana Gruber has followed the same dividend policy since listing to distribute between 50% to 70% of adjusted net profit on a quarterly basis. Over time, we have demonstrated our commitment to this policy by consistent quarterly dividends, distributions in the higher end of this policy range. And in total, since listing, including share buybacks and extraordinary dividends, we have distributed close to NOK 1.6 billion to our shareholders, representing a total payout ratio of 73% of adjusted net profit since listing. Moving forward, and backed by stable production of high-quality products, cost control and a strong balance sheet, our policy stays firm, and will, of course, continue to remain a core priority for us. Then to sum up, we have delivered cost improvements, and we will keep focusing on maintaining efficient cash costs in line with our target to support both cash flow and dividends. We have a clear sustaining CapEx program to support long-term production of both hematite and magnetite. And we have clear strategic investment opportunities to capture additional flexibility, but also to position ourselves as one of the leaders in the high-grade iron ore segments in the years ahead. To support these efforts, we have a strong financial position that gives us flexibility to increase leverage, if needed. And importantly, we are in a very good shape to continue delivering consistent and attractive shareholder returns in line with our policy, continuing to follow the same strategy as we have been doing for the last couple of years. So with that ending, I think I will leave the word back to you, Vegard, and our friends in Cargill. Thank you.

Thank you, Erlend. And next step, I would like to welcome our great partners from Cargill, Sijin and Paulo. The floor is yours.

Thank you very much. All right. I think there is a -- thank you. All right. Great. Thank you very much, and I really appreciate the opportunity to come back and talk to all of you. I think many of you I have met last year. And we have about half an hour. I will take some of that time to talk about Cargill's view about iron ore and, of course, the overall steel markets, and also touching on very important macro trends before I hand over to Paulo to talk about some of the trends in European steelmaking investments and kind of broadly speaking, kind of this view about the higher-grade direction that Rana is taking that we're very excited about. All right. So well, we were here almost exactly a year ago. And I think we spent most of the time talking about the China stimulus. I think I believe we probably talked about the U.S. presidential election outcomes a little bit as well. Little did we know, right? And I think looking back, one very interesting kind of reflection is if we had a time travel machine, and we would have gone back and knew about all the tariffs announcements, right? There's -- at some point, we learned a year ago that U.S.-China tariffs are going to go up to 145% or whatever the actual number is, right, and we're going to have a global trade tension for quite some time. We're going to have a lot of movements on geopolitics. We're going to have in China, DeepSeek, right, in the U.S., an AI revolution and all of that. What would we have predicted iron ore prices to be? What we have predicted U.S. equities to be? And I think the answer is probably, maybe we don't need a time travel machine because we might have gotten the news, but we wouldn't have predicted the outcome. And I think that's actually quite an important takeaway for us. Iron ore prices have been very resilient, right? Pretty tight range bound, I would say, for most of the year. Even though at the same time, if you look at some of the other risk assets, they were going in opposite directions, right? And again, not necessarily in the direction that we would have predicted either. We had a rally in U.S. equities that really continued for about 8 months of the year, right? We did have a pretty important wobble back in April. U.S. dollar was another very important trend for us as well, but for global risk asset pricing. And then if you look at our ferrous complex, the big mover was actually China's coking coal, right? I think many of us probably follow that as well. But if you look at iron ore and steel prices, they were kind of in lockstep with each other, but what was quite remarkable was what happened to Chinese domestically produced coking coal prices in the past year. And we're going to talk about why that is an important factor. That could be transient -- never say transient, I suppose, but it could be something that was more characteristic of 2025, but we are getting past that stage at the end of the year and into '26, which is a positive development for iron ore, actually. So another important event I highlighted up there is supply-side reforms. Again, not sure how many of us actually follow this day-to-day, but it's a fancy way of saying China wants to address the deflation problem, right? China has been struggling with low prices for more than a year now, maybe even longer, if you think about it in real terms. And when China sees the problem as upstream overcapacity, then it talks about -- they talked about restricting supply, which is the supply-side reforms. And that had a material impact, as you can see, in coking coal prices, right? And they actually kind of lifted up the entire ferrous complex, and it was a very important event for all of us. So what really -- going back to all of these developments, what really explains the fact that iron ore, among other commodities, our complex was very range bound. I would say that for us, the important -- we always want to get a bit of tailwind in everything, right? We want macro to be turning. We want the economy to be strong. We want the fundamentals to be reflective of that macro. So everything going in the same direction. But I think what happened in 2025 was actually we had a pretty big divergence between the macro, the risk sentiment versus iron ore fundamentals. And that is actually very clear if you sort of take the year into 2 halves, the first half versus the second half. So there is no one-size-fits-all explanation for any of this. And we often hear kind of casual commentary about how iron ore prices were maybe range bound because demand in China was on the weak side. The economy was not doing well, property sales was poor. All of that description of facts is probably correct in some -- to some extent. But actually, if you just count the tonnes of iron ore coming into the market and then being taken out of the market to be consumed, the first half of 2025 was actually very strong, right? There was a proper cyclone in Australia that took out a lot of supply from the market. China's hot metal production, which we're going to talk about in a bit, was actually very strong, right, the strongest in many years. There was -- in kind of year-on-year growth terms, there was less supply of iron ore than what was being consumed. And then the reverse was actually true in the second half, right? You sort of see more supply coming into the market because that cyclone is going to be normalized a little bit. You have some of the newer -- or brownfield projects ramping up kind of properly. And then demand, I would call that maybe relatively steady, right, how metal production was turning. But then you cast your sight from iron ore fundamentals, which looks fairly strong on paper, to what China macro is doing, to what overall macro was doing. And that actually, it was very strong in the second half versus the first half, right? So we look at the currency very closely. This really sets the tone for everything. For iron ore, I think the pricing is still quite reflective of the overall sentiment regarding China. And you, again, see kind of this very distinct demarcation between the first half and the second half. You kind of had markets being skeptical about China stimulus or DeepSeek happened, but how important is it really, right? And then the tariff -- the reciprocal tariff, the U.S.-China trade war. So that just led the market to kind of not really know what to do with China. And it took to about middle of the year for the markets to say, "All right. U.S. is importing. Nothing really stopped. China is exporting actually very, very strongly overall, right? Nothing really stopped. Liquidity is coming back. U.S. dollar is weaker, flows are going to all the emerging markets to the rest of the world. All right, China looks quite cheap, right?" So you actually began to see valuation really pick up for China assets. And if we go back to the previous slide, that is actually very consistent with what the ferrous complex was doing in the second half. So when you have macro stronger in the second half, fundamentals may be a little bit weaker on paper, we actually saw macro driving more of the iron ore prices trends. Of course, you could say, without the deficit in the first half, where would iron ore prices happen, probably a lot weaker, right? So we see fundamentals is acting more of a support, but we see macro repricing really taking us into a stronger territory in the second half. So just putting some numbers on paper in the form charts, hot metal production, they're all very green. I realized that. It's sometimes a little hard to see the year-on-year. But 2025 was a strong year in hot metal production. And where is it going, right? Where is the steel going? China steel demand was actually growing in year-on-year terms, right? China, if you recall the news, producing massive number of cars, right? There is an incentive program for people to get tax back on their -- or essentially to get sort of a cash subsidy when they buy consumer durables, not just cars. So there was a lot of that going on. Chinese exports to all of the world was growing very rapidly. But then if we drill down to steel, steel exports, both in finished products and also in semi-finished products, we're also quite strong, after a healthy or very high 2024, '25 was actually still stronger. Now we begin to see iron ore port inventories pick up just in the past couple of weeks, and I think that's reflective of a higher supply coming into the market. But even the fact that the inventories grew at all in the first half, that was quite remarkable. I think at the beginning of the year, everybody was projecting more supply coming to China, China consuming less and that inventory is building. Now I talked about coking coal previously. That is actually a very, very important trend for -- a very important driver for iron ore prices. And then also for some of the 65, 62 premiums that maybe -- if you follow that or the low-grade discounts, a lot of the sort of higher Fe or lower Fe premium discounts have also been fairly narrow versus the headline prices, and a lot of that has to do with coking coal. Now what exactly happened to coking coal in China, right? This is a product that we knew from a few years ago that China was quite short of, doesn't produce a lot of hard coking coal, right? Australia has high-quality stuff. Also other suppliers, but Australia being a primary one. So you sort of have an impression that, that was constantly constrained. And when Chinese coking coal prices are higher, it incentivizes steelmakers to use less coke, and therefore, to use higher-grade iron ore and sort of drive up that premium. Now what happened is actually China became too successful in energy security, if you want to put it in a positive way, right? So in the years after 2021, China really just tried to expand its coal supply as much as possible. China had a massive energy shortage a couple of years back. And when you expand overall coal production, you get coking coal production as a result of that as well. So you had a collapse in coal prices -- coking coal prices as a result of that expansion, and that really just made the Chinese steelmakers a lot more competitive in the first half of this year. Very good for steel exports, very good for hot metal production, but maybe not so good for the cost floor for the entire steelmaking complex, right? China being the cheapest tonne, and that tonne is being a little bit cheaper over time drags everybody down a little bit. So it's actually quite rare for China to both be able to export and be able to maintain a margin, because China usually export the tonnes that they can't sell domestically, right, that there's too much of. And you have to sacrifice margin for that export. But actually in '25, because of very low coking coal prices in the first half, China steelmakers had margin, could export, use more iron ore, but just maybe wasn't that willing to pay up, right? So I would say that this helped with the overall tonnage, but it wasn't so helpful when it comes to the cost. So this is beginning to reverse as a result of the supply side reforms we were talking about earlier. There is sort of this pressure on deflation. The leadership came out and said we want to crack down on overcapacity, too much competition in a sort of killing margin sense, and coking coal began to rally, along with a lot of other upstream products. So you sort of have that come back and you have China now trading at parity with Australian hard coking coal, and that is going to be over the medium term, positive for higher grade. We're talking -- we're not talking about 67, we're talking about sort of higher grade within the last furnace usage, right, but it's still positive because that forces steelmakers to be a bit more selective in what they use. Now is that sustainable? That is a big question for us, but it is one thing that the leadership has said they're going to do for the next 5 years. And I think that, that very rare sort of collapse in coking coal prices was probably -- is probably behind us. So what are some of the key questions for 2026? I think one question is -- of the 3 questions we have, one is really how demand will hold up, how much demand can hold up in the next year. And a bit of a controversial opinion because we had a very big difference between vibes and actual data on the ground, right? Vibes are very negative, right? It's poor everywhere. If you ask U.S. consumers, Chinese consumers, European consumers and maybe some industrial players, they're going to say, "The economy is not doing so well, right? We're not so sure about the future." And that is actually very important to know. On the other hand, if you look at actual manufacturing PMIs, if you look at actual household spending, retail, housing sales, in developed markets, they're actually better, right? European construction is up, U.S. housing sales, you could argue that it's a little bit frozen, but it's now responding to lower rates. In China, also exports are strong. So if we look at current indicators, bearing in mind, the vibes are poor, manufacturing has actually been an upswing since the beginning -- and actually late '24, beginning of '25. And if we look at our projection of steel demand, again, it's a little bit tough sometimes to sort of model your demand forward. It's -- at the end of the year, you don't really have a lot to go on. China will have an important meeting in December to talk about next year's targets. But judging from the 5-year plan that they came out with about a month ago, they actually have an aggressive target to hit. And that aggressive target is 2035, which to us, it's a long time away, right? But they have identified their target to become a midsized, mid-level developed country in per capita terms. So that's $20,000 per capita by 2035. That's quite a stretch goal. And it also wants to double its GDP per capita, its own GDP per capita from 2020 levels, right? So these are aggressive goals that President Xi himself has set back when -- about 7, 8 years ago. And these are targets that according to the leadership, would require a growth rate of over 4% in the next 10 years. And that target -- and that the first 5 years will have to be higher than the low 4s. It would have to be the high 4s, right, or maybe close to 5. So judging from that, we think that it doesn't really -- you can set a target, right? You can -- you still have to do things to get there. But I think for China to so publicly set a fairly ambitious target, means that it's going to be there to support the downside, right? If things really begin to wobble, we know that they're going to come in and start financing infrastructure, maybe promoting more exports. So that's why we are fairly optimistic on the demand side or at least steady. Now second question for 2026. Will iron ore supply come to the market as people have been anticipating for years and years? Now we know that the big sort of elephant in the room is Simandou, so that is the big really massive landmark project in Guinea that is going to begin -- I think the ceremony was actually yesterday, where they had first ores. And we have all the publicly announced information about 2025 and '26. We know that infrastructure is being built on a very aggressive ambitious scale, right? But the production would have to prove itself. Now these are obviously our estimates, our forecast and market has other forecast potentially. But we're kind of in that range, I would say, as maybe market consensus. And that is around 65 material, give or take. And the initial production, according to public information, is going to be, you're still sort of in that ramp-up stage and that quality might be sort of different from what ends up being produced on a consistent basis in a few years' time. So this is still to be tested. We all know that there are lots of issues with producing consistently and shipping consistently from Guinea, right? The heavy rainfall is an issue. So very, very seasonal shipment schedule. There is still additional processing to be done. So there are operational challenges that I'm sure the operators have thought about and will sort of begin to sort of smooth out in the next few months, but it's something that I think will be key to how the market writes down the supply forecast for next year. But even if you just take the aggregate, a lot of the -- and look at the headline numbers, it's not a big incremental increase, it's actually quite similar to the scale we saw in 2025, and -- in the beginning of 2025, the actual 2025 was lower because of the cyclones and what not. So we still have the weather question as always. We also have a couple of projects that are kind of recoveries, so just making up for '25 losses. We are also -- we also have major players like [ Vale ], who is really looking very actively to optimize their portfolio to respond to market conditions. So it's going to be a very interesting market as sort of everybody maneuvers around the big projects, the big supply coming in. But I think it's probably not a materially different year for '26. And finally, I think a very important question for us is and it has to do with how selective will steelmakers be. And that is -- the steel market is changing. We have been spending all this time talking about iron ore, Chinese steel markets, but a lot of developments have been happening outside of China as well. And that had to do with U.S. tariffs as we know, right, you had the [ 25 ] tariffs with no exemptions, and the no exemptions part is the important part because it directly hits U.S. steel imports from Canada, Mexico and so on. And then that got elevated to 50%, right, over the summer, and you saw prices, of course, react before the actual tariffs were passed. But you saw sort of U.S. steel prices rally really hard on the back of these tariff announcements. Now you begin to see a little bit of a similar scenario play out for Europe as well. So Europe, of course, has multiple considerations, right? It has the emissions -- the border adjustment scheme for emissions, right? Basically, putting a carbon surcharge on steel imports and other industrial products imports. Starting '26, you have the emission trading scheme, which affects the carbon costs for steelmakers, basically raising the carbon -- the embedded carbon costs of steel produced and coming into Europe. And then also you have the safeguard, so that's the import quota, essentially. That is being cut. The tax free, the tariff-free quota called the safeguards quota, that is being cut by almost 50% in 2026. Now that still has to be adopted. Markets are talking maybe April, maybe July. But we're talking about a substantial cut, right? Europe actually imported about 30 million tonnes of steel in '25, and that potentially -- according to the quotas, right, not to say that it's going to be right away, that could potentially come down from 30 million to 18 million on a 12-month rolling basis. So that is more than 10 million tonnes of steel that they're trying to produce domestically, right? If you look at the documents that they used to explain the safeguard duties, they were talking about raising the capacity utilization of European mills from about 65% to about 80%, 85%. So more European production, more positive for higher grade, sort of within that middle range Fe content material and sort of lifting up the complex for the rest of the grades. So obviously, we want to know how this is going to play out. But if you look at some of the hot metal production, crude steel production figures from Europe and the U.S., you can see that in the U.S., especially, that crude steel production is really picking up. U.S. imports have really tried to come down in the past couple of months. And even with or without that import cut, you see domestic production really ramping up as a response to prices and higher margins. So if all of these trends are going to have an impact on our markets. But altogether, we think that some of the cost deflation trends in '25, maybe behind us. And we're looking at a fairly balanced market but with potentially higher sort of cost floor and higher margins potentially for European and U.S. makers. So with that, let me hand over to Paulo.

Just the switching. Okay, cool. Good morning. I'm Paulo. I was not here last year, but I work in Cargill Metals in our investments and strategy for the Atlantic region. It's a pleasure to be here. I think just moving on from Sijin, I'm going to focus a bit more on the European situation. I think in general, we see that the European situation is very similar to what it was a year ago. I think there's been some obvious headwinds in Europe. But fundamentally, I think what we presented last year is still the same. We're seeing an industry that has an aging asset base. We've got a lot of regulation that's coming in around ETS and CBAM, that's a big driver for change. And therefore, we're seeing an industry that has to change its technology. And the technology choice is still the same. It's still a move to DRI and EAF, and consequently -- and going back to Gunnar's initial intro, the high-grade space is very important in Europe. We're seeing a situation where we're going to -- we're forecasting a decline in demand for BF grade material and a consequent increasing demand for high grade. So I think the name of the game in Europe is high grade. And I think as we look globally at the high-grade space, we still see supply being very tight. I think Gunnar's figure of 3% of seaborne iron ore in the high-grade space is -- matches sort of our predictions. And I think generally, why is that space very tight? I think it's a number of factors. But firstly, it's to produce high-grade iron ore, you need quite unique ore bodies that only exists in certain parts of the world. I think regulation and permitting around tailings facilities is a challenge in a number of countries. So countries like Canada, which do have the ore bodies, that is a challenge to permit new mines. I think also the general funding for high-grade iron ore projects is fairly scarce. I think a lot of the capital in the mining space is flowing. I mean, finally, capital is flowing into the mining space, but it tends to be going more towards critical minerals, non-iron ore critical minerals. So there's still a scarcity going into the iron ore space. I think the other challenge in iron ore as well, I mean, we're talking about Simandou and there's some other projects in West Africa, but it's the geopolitical aspects as well and the capital in general is not willing to take risk in that part of the world. So I think our view is high grade is going to remain tight. In terms of the transition in Europe, look, I think there's -- it's perhaps happening slower than we were predicting a year ago. There's been some slowdowns in project decisions. But I mean, recent news about ArcelorMittal Gent, for instance, but I think in general, the change has to happen, and it is happening. I think for the most part, some companies are perhaps playing politics here as well, looking for further government support on some of these new DRI plants and so forth. But I think very much the change is happening. I think also, just touching on the high-grade space. I don't have a slide on this, but the Middle East, North Africa is also a very, very important region. We're continuing to see expansion in the Middle East, North Africa. We're forecasting a demand growth in that part of the world of sort of 5% to 6% per annum over the next 5 years for high grade, that there is continued expansion of pelletizing capacity there and DRI projects are moving ahead there. So I think that's a very, very important market and also in reach of Rana Gruber. So I think, yes, this is just really reemphasizing some of the points I've made here. So 2025 -- I think at the beginning of 2025, there were 55 operating blast furnaces. That number has already come down a few. But we're certainly seeing -- we're forecasting that these DRI plants are going to start appearing in -- by 2030, we should see a number already in place. We've got Stegra here. I mean there's been some funding issues there, but I think, ultimately, I think pretty much every European bank has invested in that project. And I would be surprised if it doesn't continue to move forward, and I'm sure they will find a solution on the funding. So -- and I think the other important aspect I mentioned earlier is the European ETS, CBAM. This really is driving that change in Europe. I mean without transitioning to this new technology, the cost basis of the blast furnace will not be sustainable. I think we see this trend continuing. So by 2030, there should be approximately 10 DRI plants operating in Europe. That's come from a basis of pretty much 0 a couple of years ago. So I think good progress for this transition. Yes. I also want to touch on freight. I think this is a very important space and very important for Rana Gruber. We're seeing, I think on the demand side, fairly stable on the freight aspect. I think the key area to focus on is supply. We've got an aging fleet of ships. So there's a lot of investment needed in the fleet, and that tends to be quite a long lag in terms of responding to the supply need. So we're generally going to see a situation where further investments needed into fleets. Costs are rising. There's a lot of regulation, which is driving the need to look at different fuel sources on shipping, and labor costs are also going up. So we're seeing a lot of pressure on general freight costs. And I think layering into that some of the other regulation and taxes that are entering the space. So I mean, in Europe, we have the ETFs on shipping, which is already coming into play now this coming year. So that's going to start to increase the cost of shipping for a product that's either leaving Europe or entering Europe. And I think that, together with the supply cost pressures, is going to lead to a widening freight differential in terms of shipping to proximal markets versus further away markets like China. So it's going to reward flows that are moving to more proximal customers, which I think in the case of Rana Gruber, is obviously going to favor material that's going into Europe or even the Middle East. So I think that's the general theme on shipping. And yes, I know we're kind of just over time. So do you want to round out some conclusions there?

Yes. No, I think we covered a lot of the conclusions here. So we think that for 2026, just watch for any sort of shift in that underlying economy, the strength of that economy, watch for any sort of smooth operations, seasonality in Simandou and some of these other supply sources. But then very, very importantly, kind of steel trends in Europe, I would say, whether hot metal production can actually ramp up as a response to all of these different regulations. And yes, no, that's, I think, our market views for '26. And thanks very much for your time.

Thanks.

Thank you, Sijin and Paulo. We will have 10 minutes break now. So I think we're starting 10:15, and please grab some coffee and some light lunch. [Break]

All right, I think we'll start again. And I hope you had some time to get a coffee and something to eat. Let's move on to the next section. I will leave the floor over to Stein-Tore Liljenstrom, our Chief Operating Officer. He will explain more about our resources and operational developments.

Thank you so much, Vegard. Good morning, everyone. My name is Stein-Tore Liljenstrom, Head of Operations. I'd like to take you through Rana Gruber's key operational developments and priorities that are shaping our future. Our operational priorities going forward are clear. We are transitioning into new mining areas, in the western part of our resource base, and expect to start ore production very soon. This marks a strategic shift as most of the production has been concentrated at Ørtfjell in the East in the recent years. Secondly, in the mining business, the key asset is our resource. Over the past years, we have invested substantially in exploration drilling, and unlock future value. We will continue doing so to ensure a long-term and sustainable perspective in all of our operations. Finally, and as touched upon multiple times in this presentation, quality matters. Increasing the iron content of the concentrate remains a top priority for us. It is the foundation of everything we do nowadays. But reaching high-grade production requires dedication and therefore, we need to manage our resources strategically and make the most of what we have. Building on the priorities from the previous slide, it is important to state how to deliver and maintain our solid position as a frontrunner in the industry. Rana Gruber has a vast resource base, giving us stability and flexibility for decades ahead. Our 4 main deposits are located around the area of Storforshei and Ørtfjell, as shown in the right-hand side of the map, you can see here. With mineral rights covering large areas, we have enough fuel to support high-quality production for generations to come. The resource base is also potentially even greater than the current reports indicate, with several deposits showing great and promising upsides. In 2026, we will publish an update of the resource potential that exists in our land. Today, most of our operations are centered around Ørtfjell. But with the opening -- the open pit there nearing its end of life time after a long period of efficient production, we are transitioning from this deposit to the Stensundtjern deposit very soon. I'll come back to that later. What really sets us apart is our highly efficient operations. Our mines and infrastructure processing facility and harbor are all located within short distance of each other. And transportation is connected via railway and most of the route is downhill. This means we can cover large volumes at low cost and with minimal emissions. Moving to the next slide. I want to show you one of the main reasons why we have decided to pursue high-grade production. This is, in fact, something that very few miners are able to do. And this I will do without a strict manuscript. I have 2 pieces of iron ore here on the table. This piece is from a well-known producer in South America, has an iron content of 62% Fe, straight out of the mine, which means this is a nice quality ore. But there are some constraints. The ability to process this ore is quite difficult, for several reasons. One is the intrinsic properties of the ore, which means it's difficult to process. And there are other properties as well in where you have to process the ore. So you can come forward after the session to have a look and feel on this, it's very solid, very strong, and how to process 62% Fe. But it's stuck on 62% Fe. If you want to go to 65% or even higher, you have a bit of a challenge for a lot of iron ore deposits in the world. This is the Rana ore. I can hold it in my hands because this has only 32% Fe, which seems as a low-quality Rana mine ore. But as you can see, my fingers now, I almost have 62% Fe, which means the key to the Rana deposit is, it's -- the ore is so easy processable, which means even if the starting point is 32%, you can, I would say, easily upgrade it to high grade. We should go all the details involved, but the ore itself is very processable. That's a very -- that's an important key to the Rana deposit to understand that. So feel free to have a look at the ore. You can see it on ice and feel the ore. Maybe I will move to the next slide. Yes, mining is not something you can plan for on a day-to-day basis. Running operation at our scale requires long-term planning and development. As shown in this figure, exploration typically begins 10 years before the product reaches the market. This is followed by planning and development, then drilling and final production. In the exploration phase, we assess whether the properties of the ore justify further planning or not. During the development phase, we ensure that the necessary infrastructure is in place to prepare for mining. And then the final stage production involves blasting and transportation of the ore to the processing facility before it is shipped. So this is a long-term endeavor when you do mining. As mentioned earlier, we are now transitioning from open pit mining at Ørtfjell to Stensundtjern, the new deposit, with the shift expected to occur around the end of this year or beginning of early next year. The Stensundtjern deposit is projected to have a life of production over 8 to 10 years. For underground mining, operations will continue at Ørtfjell, where we are currently at Level 123 and Level 91, and that is above sea level as a reference point. This level will remain the main source of underground production for the coming years, followed by Level 59, which is scheduled to commence some years down the road. The key takeaway from this slide is that long-term planning is part of our DNA. It keeps us ahead of strategic decisions and ensures we are -- we always have a clear picture of our resources and production capacity. The extensive drilling campaign in recent years have given us confidence in the size of our deposits. All in all, it enables us to make informed and long-term decisions. This shows the Rana ore is divided into East and Western area. So this is a map of the whole area. To the East, you can see the Ørtfjell. This is where we have both open pit and underground mining operations. And Ørtfjell is actually the largest mineral deposit -- large mineral deposits we have. And over the past years, we have invested significantly in exploration here to secure flexibility and optionality in operation going forward. So we drill a lot in this part of our deposit, the largest one. On the Western side, we have several promising deposits, Stensundtjern. Our new open pit area is starting up very soon and marks a major step in expanding our footprint to the West. It is strategically positioned to deliver years of high-quality output with magnetite-rich ore. And because of its location close to the infrastructure at Storforshei, it offers significant potential for efficient operations. Erlend has also touched on this earlier when he spoke about the option we are pursuing to bring back that facility to life. But if we look ahead and beyond the expected depletion of the Stensundtjern, Ørtvann is likely to become the main deposit in the West. The underground potential there is very promising, with high concentrations of both hematite and magnetite. And just like we did when extracting iron ore from Ørtvann back in the days, we can transport the ore short distance to Storforshei given that, that facility is reactivated. So this ore body is very close to potentially reactivated infrastructure in the future. So again, let me now show you a short fly over video of the Stensundtjern deposits. So we have been preparing this for a few months now. We have deforested the area, removed the top soil and are ready to start production very soon. You can see the ore to the North and [ Westrock ] to the West. And also, it goes into the Arctic Circle Raceway. We have to move part of the raceway and reconstruct it later. So this gives you at least a brief feel of the scale of the operations. So this is 8 to 10 years' lifetime in an open pit mining in the Western part. And you can look down the road, that goes up in the top there, down to Storforshei and further up to Ørtfjell and the crusher stations we have there. And also, water management is quite easy because in the beginning of the mining, we will transport -- the ore will be transferred by, what I call, Uncle Newton, the gravity, so we don't need to pump a lot of water in the beginning of the operations. That also keeps the cost down. So to enable production at Stensundtjern and nearby deposits in the Western area like Ørtvann, which I mentioned on the previous slide, we are constantly looking how to maintain operational efficiency over long term and how to support high-quality production. On this map, you can see Stensundtjern deposit, which will be a starting point for a new open pit production, as I mentioned several times. Nearby, you can see the Ørtvann deposit, you can see the distances here from Stensundtjern down to Storforshei. Ørtvann is really very close. These location illustrate the flexibility we have in designing efficient logistics for the Western resource area. So our primary goal is to secure a long-term sustainable production while maintaining operational efficiency. To achieve this, we have several options. In the short term, iron ore from Stensundtjern will be transported to Ørtfjell, all the way up to Ørtfjell where we have the silos and the crusher and the infrastructure already in place. This ensures that production can start without any delay. Although there is a slightly longer transport distance, it's still an efficient production setup. Looking ahead, Storforshei represents a potential opportunity for infrastructure reactivation. Whilst this is an attractive option, it's just one of several paths we can take. Reactivating Storforshei would allow downhill transportation, improving cost efficiency. This is mostly downhill, whether through existing infrastructure at Ørtfjell or future [ upgrade at Storforshei ] or even transport the ore by road down to the processing facility in Mo i Rana. So you can see we have a lot of flexibility in the operations, and we can shape it in the most optimal way. A key part of our operational strategy is also to maintain a stable magnetite production. Looking at the graph on the right, you can see how production has accelerated from just about 100,000 tonnes a year in 2023 and before that to a run rate of 175,000 tonnes this year, and it has almost been doubled since the M40 project started. Our goal is to reach and sustain around 200,000 tonnes annually from 2026 and onwards. The new open pit at Stensundtjern will be the key to this given its higher magnetite concentrations compared to Ørtfjell, ensuring stable output for years to come. So now why is then magnetite so important? Well, magnetite is a distinct product from hematite. It's not the same product. It serves specialized industries rather than traditional steel makers. It is, in fact, already an ultra-high-grade product with over 71% iron content and can also be blended with hematite to increase the iron content of that concentrate. So magnetite is a premium product commanding higher prices than hematite because of its ultra-high iron content with unique properties to be used in the chemical industry and not only in the steel industry. So that is how we are delivering on the priorities we set out at the start of this chapter, moving into new mining areas and constantly looking for ways to improve efficiency in our operations, unlocking future value through exploration across our vast resource base and keeping quality at the core of everything we do. So with that, I'll hand over to Mr. Gunnar, who will wrap up with a strategic rationale and implementation of our important high-grade project. Thank you.

Thank you, Stein-Tore. As mentioned earlier, I will now tell you a little bit more about our strategic direction and why moving to a high-grade iron ore production is the optimal path forward for Rana Gruber and for our shareholders. As we mentioned throughout today's presentations, a key strategic priority for Rana Gruber over the coming years is to continue our trajectory of producing higher-quality products with the aim of achieving high-grade production by 2029. The way of producing steel is changing. What we are seeing is an increasing share of steel producers investing into DRI production. DRI capacity has already increased by 40% since 2020, and we expect this shift towards new production methods to accelerate toward 2030. This is a production method which significantly reduces CO2 emissions and which requires high-grade iron ore. So the demand will come, but the supply, as I touched upon earlier, will be limited as the overall quality of iron ore in the world actually is declining. At Rana Gruber, the combination of the unique quality of our iron ore, our tight customer relationships and our geographical proximity to European steel production puts us in an ideal position to meet the increasing demand for high-grade iron ore. We can capture significant value potential from premium pricing and be an important partner in the sustainable shift in the steel industry. As a global high emitter, the steel industry needs to change. Of the total emission in steelmaking, it is important to note that about 85% comes from the reduction and smelting of iron ore. So the raw material itself plays a key role in decarbonization. In Europe, public policy and capital allocation are now moving in the same direction. Regulators and governments are clear in their commitment to decarbonize. And there is a significant government support for decarbonization with close to 90% being funneled into large DRI projects. This technology stand out as the preferred pathway for sustainable steelmaking, and that is the opportunity we are positioning Rana Gruber to capture. So what exactly is DRI? In simple terms, you can think of 2 main ways of producing steel. On the one hand, you have traditional blast furnace method and on the other, the DRI method. In traditional steelmaking route shown at the top, lower grade iron ore, typically between 58% and 65% Fe is used in the blast furnace process. This requires coke base and -- on a typical type of coal and sintering, both of which are highly carbon intensive. The result is roughly 2 tonnes of CO2 equivalents emitted for every tonne steel produced. In contrast, the lower part of the slide shows the direct reduced iron route. This process uses gas or hydrogen instead of coke and relies on higher grade iron ore, typically 67 and above. High-grade iron ore is crucial here as it allows for lower energy use and higher productivity. With this method, steel producers can cut emissions by as much as 75% or actually even more. This shift in steelmaking technology underpins our strategic rationale as we are positioning Rana Gruber to meet the demand for the fast-growing low-carbon steel value chain. Iron ore is no longer iron ore. The development we have seen in recent years is an increasing segmentation of the market in which the main portion of volumes and current oversupply is concentrated in the lower end of quality range. On the other hand, higher grades remain limited in supply and are therefore priced at substantial premiums. Most currently -- current supply comes from Canada and Brazil with long shipping times and higher carbon emissions. And there is a very limited access to nearby sources of high-grade ore for European steel mills. From Mo i Rana, Rana Gruber can serve European steel producers with high-grade ore in just 3 or 4 days of sailing. This is a significant logistical advantage and positions us in the heart of the European transition to producing green steel. Shifting to high-grade production is not only what our customers want, it's what really gives us the most bang for the buck. Price dynamics in the iron ore market are simple, but yet complex. The higher the quality, the higher the price. And high-grade iron ore demands a significant premium compared to Fe61 and Fe65 indexes. This isn't just a temporary bump. It represents a sustained structural differentiation from standard products, giving us a higher realized sale price for every tonne we ship. Then we combine these higher prices with our optimized production process and the net result is a substantially stronger profitability per tonne across the entire operation. This culminates in an attractive project economics. And while the final realized premiums depend on bilateral negotiations with our customers, the trajectory is clear. The move to high grade derisks and enhances the overall return profile of our operations. On the right, we have an illustration showing how this strategy pays for itself. This analysis is based on our stated investment of NOK 400 million and stable annual sales of approximately 1.6 million tonnes. And as you can see, a price premium of just $20 per tonne above the Fe65 index results in an estimated payback time of around 1.3 years. We expect the premium to lie in the range marked on this chart from USD 20 and upwards. It's important to note that this is an illustrative model dependent on achieved premiums and several operational variables, but it gives you a good indication of the attractive underlying economics underpinning our strategy. Moving on, let's take a look at how we intend to roll this out over the coming years. To execute on this high-grade strategy, we've designed a pragmatic step-by-step time line focused on efficient ramp-up and mineral operational disruption. At the same time, we also -- we will also be flexible in terms of execution and timing. That way, we allow ourselves to optimize the rollout based on operational milestones, market conditions and customer needs. With the Board approval now in November from -- in 2025, actually yesterday, the plan is to initiate the project, [ rig ] our processing facility for high grade and begin procuring new processing equipment. The entire project is structured to proceed in parallel with our current operations. As you can see in the middle section, the installation of new equipment will mostly use areas of the facility that are not in current use and critical infrastructure will be installed during normal operations. This phased approach is deliberate and really important. Our goal must be to maintain current production levels and efficiency while the project is underway, exactly the same way as we have done in the past. Importantly, we will also achieve incremental price premiums as the quality improves and as we take on investment costs, which will gradually enhance our profitability. The bottom line is very simple. We are executing a major strategic upgrade with flexible timing designed to maintain continuity and efficiency and deliver the highest return for our shareholders. We look forward to receive your questions and discuss more with you over lunch later. But before rounding off, I would like to go over why Rana Gruber is a very attractive investment proposition for the years to come. As a mining company, the core of your assets is your natural resources. We are, in many ways, lucky to have the extensive base of high-quality iron ore that we have. Stein-Tore and his team look forward to update you in 2026 with our new resource statement, showing that we can produce premium iron ore for decades to come. But it's not all about the resources. It is also about how you process it logistically and operationally. Rana Gruber has demonstrated time and time again that we have a highly efficient operational setup, being able to increase quality while keeping up production volumes. Then you also have to look forward and anticipate what comes ahead. We are executing on our high-grade ambitions, capturing imbalances in a segmented iron ore market and serving the needs of our customers as the steel industry transitions to new production methods. With a solid partner in Cargill and good relations with customers across Europe, we will transform our resources and operational capabilities into financial profit. Our robust balance sheet and cash flow generation give us robustness to invest in profit for tomorrow. In sum, this positions us in attractive -- as an attractive investment with transparent and consistent dividend payments over time, returning capital to investors who believe in the Rana Gruber way of doing business. Thank you all so much for attending today, and we will now open up for questions. Thank you.

Thank you, Gunnar. While we're waiting for some questions online, we could take some from the audience. Marcus is ready.

Marcus Gavelli, Pareto. So just one question on my side. You provide us a time line with Fe67 starting today and ending in 2029. How much flexibility is that in that sort of time line if iron ore prices were to boom next year and free cash flow would be way stronger, could you have flexibility to do that sooner? Or is it sort of a set time line either way?

It's not a set time line. It is possible to tighten the time line. The restriction would probably be the timing of when you put on an offer of the equipment, when you start ordering the equipment. So there will be somewhere a lag there. But if things really speeds in a higher way than it does today, we can speed up, but I'm not sure that will happen because we know the customers that need these products. And most of them will be -- need products in the end of 20s, '28, '29, '30.

Also one more question. On the magnetite production, you said [ 200,000 tonnes ] is the current goal. How much is there to squeeze out of your current resources in terms of if you were to do several investments? Could you do other upgrades to boost that over time?

It depends on the blend of where you put in the ore. If you increase the volume from Stensundtjern, then you can increase the production of magnetite quite easily. So that's why we say that a volume around [ 200,000 tonnes ] and plus side will be the most -- the optimal blend of the 2 ores.

Any other? [indiscernible].

Martin Mauseth from ABG Sundal Collier. So my first question is on the price realization on the high-grade project. So you mentioned that you expect $20 to $30 per tonne in premium. So what do you base that on? And how certain are you that you will achieve that? And the second question is on how will the high-grade project affect the OpEx levels?

The high-grade project will -- I take the last one first. The high-grade project will not increase the OpEx -- production. The production is more or less the same. It's just more equipment. So energy costs will not go up. And by the way, we pay almost nothing for the energy. The other side is you can never be certain about the premiums. That's why we show that it's a good payback whatever the price will be. But there are several analysts that have seen into the market and given their view on all the DRI projects going underway. And based on that, you can say somewhat of the volume of DRI that will be available, and that is not enough. And then from that point of view, we probably expect quite a big premium. But we have -- we are probably in the middle or lower end of the analysts on this price premium.

Okay. And then just one quick question. So on -- you mentioned that the time line on high grade is quite flexible. But what are kind of the biggest risks to you not achieving it on time and on budget, if you were to mention some of the biggest concerns, potential concerns?

The potential concerns is that the building of the new DRI plants in Europe takes longer time. It could be. And that's why -- but even though if we produce -- when we produce a 67 product, we will get paid for every iron content increasing. So we will get more premiums anyway. But that could happen. But there are several projects that are well on their way. So we -- and of course, we are -- together with Cargill, we have pinpointed the customers that we believe will be there. So it's not -- we are working on this as we speak. So we're not very concerned about that.

And on the CapEx?

On the CapEx, in what way?

What are kind of the biggest potential risks on the CapEx side, if there are any?

No, we don't think there are any risks on the CapEx side. It's well-known equipment. We know the prices, and we know also the time line for introducing this into the processing plant. So we don't see any risks there.

Just following up on Martin's question. Do you expect the -- probably still early days, but do you expect the 67 product to be indexed, linked or more kind of a premium per tonne relative to the 65 index?

Actually, there are already an index on Fe67, but obviously, the liquidity in that index is very low. So it's not existing at the moment. But that will exist when the production of high-quality, high-grade material will enter the market. So -- but initially, it will be indexed at the Fe65 with a premium until the liquidity in the Fe67 index is good enough for liquidity.

Roald Ross from Clarksons. First off, congrats on the quarter, a good quarter. Market seems to like it as well. A few questions on the Fe65. Seems now it's completed, achieved. Is that to be understood as every tonne out of the processing plant now is above that grade? I imagine some of the stockpiles maybe are below that grade still. So maybe some comments on that and also on the pricing and sales. Is it to be understood that you are now going to the market, trying to get the 65 indexed, priced into the volumes? What's the time line of getting all the volumes at that price? Is there to be understood as a gradual process? And also maybe a few comments on that process. Would you go to the individual customers? Is it done through the offtake? Or how do you sort of proceed with that?

Lot of questions at the same time. The production at the moment is -- the entire production is above 65. But you are totally right. We have some stockpiles that are below, but it's not very low -- much below. It's probably between 64 and 65, rest of the stockpile. So I would expect in the first half year of '26, then we will have shipped all the old material. But the production at the moment is above 65. We are, together with Cargill, of course, adjusting directly into the existing customers in order to change the contract being linked to the Fe65. There will probably be a period that we have to demonstrate that we produce above 65 on a constant level. And that will be a part of the negotiation. But we believe that within '26, the entire material will be linked to 65 index.