Whitehaven Coal Limited (WHC) Earnings Call Transcript

Welcome, ladies and gentlemen, to Whitehaven Coal's FY '23 Q1 September 2022 Quarterly Production Investor Update Call. [Operator Instructions] But thank you all for joining us today, and I will now hand over to Mr. Paul Flynn, our Managing Director and CEO.

Good morning, everybody, and thanks very much for taking the time to dial into the September quarter for 2022, our production report. I'm joined here by Ian Humphris and also Kylie FitzGerald, we'll get to some questions, I'm sure, once I've gone through a brief run-through of our quarterly report, which was released this morning for you. So the highlights for us. Obviously, a nice number in terms of our average price received for coal during this quarter at AUD 581. That's obviously a record for us. The quarter itself run-of-mine production at a managed level was 4 million tonnes. That's down on what we've recorded obviously with a very big quarter. September quarter, generally, total equity coal sales of 2.9 million tonnes is 32% down also managed coal produced sales of -- produced coal at 3.7% for the quarter also. Obviously, with that pricing backdrop, the business has been significantly cash generative and we're in a strong position there with $1.9 billion in the bank, and the quarter itself generated $1.55 billion for the quarter. The buyback has proceeded very well, and we're almost completed that the first -- the initial tranche, the 10%. So there's only about 320,000 shares remaining to be purchased once the trading window opens back up again. Over to the body of report where our safety performance has been very good, which is nice to see. It's always pleased to see these results. We're definitely doing well year-to-date. But I think on a rolling basis, we're also doing well again. Our TRIFR 4.5 is very positive, but we get cautious of these, you need to keep up the effort to make sure that these numbers are decreasing over time. I'll move into the overview. And certainly, this quarter has been an interesting one, weather affected, I'm sure everybody is well aware of, and I'm sure will be a feature of the Q&A part of the call today. So the open cuts definitely have been affected by that, and we've lost some time there, as we've noted in the production report for you. Having said that, Narrabri has been unaffected largely by the weather and has produced very strongly, and I'll get to that more in the body of the report. But certainly, from the open cuts perspective, we certainly experienced some limitations to access across Maules Creek in particular. Tarrawonga as well. Although Tarrawonga's access has been largely an issue with actually haulage down to our Gunnedah CHPP which has curtailed shifting during the course of the quarter. And Maules Creek has suffered access, as I say, and not just access but then also processing capacity also was limited, number of people are able to be on site. Sales [indiscernible] broadly the production for that period. And you can see just from the splitted sales in this period, with 92% thermal, 8% metallurgical coal, which I think you're going to see continue during the course of this year. The managed production sales and stock volumes here, you can see, as I say, managed from coal at 4 million tonnes versus a big quarter, the preceding quarter of June at 6.36%. Saleable coal production, 4.2% versus 5%. The managed sales of produced coal, I mentioned, 3.7% versus 5.4%. Our stocks at the period, we have drawn down to slightly quarter-on-quarter at 2 versus 2.38 for this period. The equity numbers are then following then after. Moving on to the mines. I'll go to Maules Creek. Maules has definitely been weather affected at 1.83 versus 3.1 for the previous quarter. Saleable coal production, as you can see there, just under 2 versus 2.56. And then our stocks, we have drawn down. You can see there from the 1 million down to 371. Generally, it's been a little bit bumpy as I mentioned there earlier, just with weather affected areas. We were planning to reduce less tonnes in this quarter in any event, and that's certainly part of the mining sequence. But certainly, the rain fall as we mentioned there at 308 mills has been quite significant during the period. And as you would have seen in various news reports across the media, there has been some flooding, not as severe as what we saw back in December, which is great. But the combination of some less severe flooding access issues associated with that absenteeism and normal winter weather effects, and that is fog and the noise related delays certainly has caused the September quarter to be lower than what we would have otherwise preferred. As I say, September quarter, saleable coal production at 2 million tonnes, 24% below the previous quarter, which was obviously a big one by comparison, and those coal stocks have been drawn down, as I mentioned. Narrabri has been performing very well. So that's been pretty positive off the back of a good year last year. We've rolled around through the change out, and we're now into 110B in good form and we have been producing quite nicely there at 1.6 versus 1.48. The salable coal production follows that very closely, 1.46 versus 1.52. And then coal stocks have -- we've got significant coal stocks there based on that ramp-up of over-budget performance, if you like it, 690,000 tonnes versus 270,000 in the previous quarter. So that's been very positive. And as I say, unaffected by weather more generally. And certainly, even though there have been plenty of rain, we haven't had any issues with the rail since the first 2 weeks of July, and that's a commentary which applies to all of our lines, obviously. Most of you all have been aware that rain in the Hunter Valley affected haulage down to the port in the first 2 weeks of July, which is obviously included in this period. So we're very pleased the way in which 110 has gone, both 110A and then the step around 110B. Saleable coal production, 1.5 for the quarter, is in line with the previous quarter. So a good result there in Narrabri continuing to do well. Again, our ops obviously being the combination of the 2 open cut has been more affected by weather. So I might just jump into the individual mines there and comment on those briefly. Tarrawonga at 352 versus that big run home in June of 1 million tonnes. Certainly September of the previous corresponding year was more in line with what you would see in the early stages of the new year at Tarrawonga, but we certainly had issues from the weather. And the issues at the mine hasn't been so much access, not so much as Maules, but it's been more about road haulage down from the mine to the CHPP. So many of you who've been along that rail will note that it is relatively low line that road, the Blue Vale Road, it does tend to go underwater a little bit, and it has done in this instance. So we've lost some time in terms of getting coal down to the CHPP in this period. Coal stocks are, as a result, are starting to trend up there at 700,000 tonnes, reflecting -- but there's a small drawdown, but we certainly wanted to pull that down much more during this period, but as I say, with that haulage impact that we've had as a result of weather, we're a little bit behind in wanting to do that in this period. Werris surprisingly, has actually been the least affected, if you like, of the open cuts and which is a good thing. Generally, historically, Werris has been the one who got worst weather first. And in this period, it certainly hasn't been the case, but 214,000 tonnes consistent with the previous corresponding period, well off, obviously, what was a very large run to the finish line in June of nearly 690,000. So a decent result there from Werris given the weather generations that we've had across this quarter. Moving along to just the realizations. I'm sure that we've plenty of interest in that. Obviously, the prices have been very good. As you can see, quoted there both the gC NEWC, semi-soft. I'm sure there will be some questions just about that. But you can see our prices. Generally, we've -- in a flat market as we generally say, in a flat market, we should be able to achieve gC NEWC average. And in this period, without any non-gC NEWC sales in this quarter, we've received -- well, we've realized 1% discount to the average of gC NEWC. Now that gC NEWC obviously has been a consistent record over the period of the quarter, which has been very good. And so -- and the good result in terms of realizations as a result. In the case of the JSM Quarterly, you can see the realizations actually have been 8% above, but that is more broadly prior to the fact that we've got a declining index there. And so those prices obviously been well below gC NEWC as I'm sure will be the topic of Q&A, and it has been in the last quarter as well and when we released our full year results. So interest in semi-soft from our part is -- that's not particularly exciting as we've been talking about for a number of years now. And we expect that to be the case until such time that the steel industry gets back into a little bit of form overall. So overall, the prices have been excellent through that period, AUD 581, as we mentioned, for the average -- and so USD 415 average for that period has been great, metallurgical coal at USD 256 during that same period. I did mention the 92 to 8 split metallurgical coal, and we do see that as continuing throughout the course of the year. And I think as most people would realize that any semi-soft that have been in the market given this price disparity between the gC NEWC price and the JSM Quarterly, we'll assume that, that coal has migrated to the extent it can into the thermal coal market, which has been happening for some time. And I know it's been happening for further time. But even given that, we are generally servicing the main customers that we want to continue from the semi-soft perspective, but otherwise moving the balance of any semi-soft capacity into the thermal market. So as you know, the prices have been good and we've had 3 consecutive months where we've had very strong price in fact, historical prices there. And you can see quoted $434, the $417 and $411, looking back through the quarter. And so it gives us that average for the September quarter of $421, which has been very positive. Energy security is on the front of mind for all our customers. And of course, the evolution of sanctions with Russian coal is certainly influencing that to some degree. We think that Europe is in a reasonable position as far as stocks go ahead of winter and you're seeing some of that play out in terms of the disparity between the API4 and certainly gC NEWC pricing. But the challenge, of course, isn't just in the coal space, the challenge for Europe is actually right across the energy complex in gas and oil. And we think that whilst they can navigate their way through winter in this particular period, mines are quickly turning to what's going on, where they're going to get their energy, be that across those 3 forms, oil, gas and coal, in the new winter for the new year. And so I think that will certainly be a challenge overall. We do note that with weather, absenteeism, COVID-related issues as well, obviously, still lingering that total exports out of Newcastle have been down, down by some good measure, which is obviously one of the influences that is keeping the market relatively tight. But that is not -- that is of a quite a material change in terms of period-on-period exports through the port. So we do note that, not just ourselves, but our peers are very tight on supply. And obviously, that's adding further upward pressure to the prices even in this otherwise shoulder period that we're in now ahead of the Northern winter. From a logistics perspective, you see our commentary there. Of course, there's been some flooding and, as I mentioned, in the first 2 weeks of July, which we generally recovered from the -- from a sales perspective by the end of August. But obviously, we've had further wet weather since that time. And so that continues to play a role in things going forward. Development projects, whilst this probably hasn't evolved too much. So the commentary here is largely what you would have seen in the past. I'll just quickly recap on that. Narrabri Stage 3, having been approved at the state level. It has been caught up in a broader federal action, which is tidied up, I think, sort of tangled up 19 different projects, not just coal, of course, which is going to cause some delays, we believe, in terms of clearing the EPBC hurdles, which are the next step for us from a Narrabri Stage 3 perspective. There's nothing material that affects us in the short term. With that, there's just -- it's another layer of law fare, which we need to work our way through, but that's not unexpected in that regard. From a Vickery perspective, nothing further change from our perspective there from what we previously commented on. But as we have worked our way through more detailed costings in terms of project capital, given this is an inflationary environment. We are looking at, as we commented there in the last paragraph of our report, we are looking at a staged commencement of Vickery. And we'll have more to say that once we've got through what we think is the various scenarios that we could play out with a small version of Vickery leading into a subsequent decision at a later date for a bigger version. We just [indiscernible] itself again, not too much of a change there in that sense. We are waiting for the second exhibition period to commence. Our expectation is that will only be a 4-week period on the basis of what the government has previously told us there, but we're expecting within the next few weeks for that exhibition period to open, and therefore, hopefully close before the calendar year closes itself. From a guidance perspective, while we certainly have witnessed all these impacts of weather, which I've mentioned repeatedly. We still think we're well within our guidance. But Maules is certainly, with the weather we've experienced to date, tracking certainly low within its range, but Narrabri is certainly performing well in excess of what our expectations were in that regard. And so it will certainly be at the top of its range, if not a little bit better than that, which is very positive to see. We have made allowances of many of people have questioned us before in terms of extra winter days in our forecasting and budgets for this year based on what we experienced last and we are generally expecting some more rain in this quarter, as everyone can see, but we're generally -- we're also expecting that to taper in the third and fourth quarter. So at this point in time, we're happy to stay with the guidance we've previously given you. So with that in Q1 down, it's been an up and down sort of period, as I say, sales have been good. Prices have been good. Volume is a little down based on weather, but we're in a reasonable position for the second, third and fourth quarters for this year. So with that, I'll hand back to our operator, and we can open up the Q&A session.

[Operator Instructions] Now our first question comes through from Rahul Anand from Morgan Stanley.

Just wanted to perhaps start with guidance side of things. I mean if you can help us understand some of the critical items in terms of meeting the guidance and sort of what type of weather impacts do you have factored into that guidance for the remaining 3 quarters? And just as a follow-up on that, you've got take-or-pays in terms of your infrastructure. I just wanted to understand if there's any sort of impact on your annual unit costs on the back of this? That's the first one. I'll come back with another one.

Yes. Thanks, Rahul. Yes. Look, from the configuration of our guidance, you can see at the beginning of the year, if I reflect back on how we pitch that into -- for investors is that we've lined it out based on our experience with weather in the past year. And the other factor I mentioned at the time was not just weather, but was labor availability also being the 2 main drivers of that wide range that we've given. So we definitely received the variable weather, as I've already mentioned during the course of the presentation and we're watching the forecast very closely in that regard. Now we have increased the number of weather days that we've allowed at the sites for the full year. And so that's extra allowance for time lost as a result of that. And we think that was the right thing to do based on what we saw last year. But relatedly, the cost guidance was also wide based upon the expectation of those 2 variables playing out or in this new year. So if you -- obviously, if you reach the top of guidance from a production perspective, you're more likely to be at the lower end of guidance from a cost perspective. Narrabri obviously doing very well being our cheapest tonnes in our business is obviously very helpful. And of course, weather in the first quarter in this year, if you're going to have weather is better than weather in the second quarter as we did last year, gives you less time obviously to make up any lost production when you only have 6 months remaining as opposed to 9 months remaining. So at this point in time, we're happy with the guidance to leave it the way it is. We're acknowledging that Maules obviously hasn't been able to produce all the tonnes we would have liked. But that's offset obviously to a good degree by Narrabri doing very well at the moment.

Okay. Perfect. And then, Paul, in terms of your thermal coal and semi-soft mix, obviously, semi-soft has gone to 8%, which is good given the current environment. But is that the absolute minimum in terms of what you can hit? I presume you've got some contracts in place. And then in the future, should the pricing dynamic change? Is it going to be easy to revert back to higher semi-soft coal sales?

Yes. Thanks, Rahul. Yes. Look, at 8%, I expect it to -- it might be marginally off that overall for the year, but not a whole lot. It's not going to be 0. We've got customers there who we want to keep in good stead throughout the year. Now that does mean we're going to lose -- we're going to leave a little bit of money on the table. We understand that. And -- but where you've got important large steelmaking customers, it's important to have been through the cycle. They understand that investment in them. I was in Japan last week, talking to one of them in particular, they understand that investment in them is selling them coal at a time we could otherwise, they know very well move that into the thermal market. I think that's an important investment in the relationship to make. So slightly less, I think across the year, but that's not going to go to 0. And in terms of being able to swing back into the market as the market changes, I think that's the purpose of keeping the door open. There will be growth just with our existing customers having invested in that relationship during the period when we could otherwise have switched out. And then general demand, we expect would -- as prices reset would be a product of general demand going up. And then moving back into the market, given the quality of semi-soft we've got, I don't think that will be too much of a problem.

Okay. And a sneaky final third question. In terms of Vickery, you've talked about the 2-staged approach. Is there a possibility of providing a bit more color there in terms of what type of throughput you're thinking? Is it purely just replacement for the Gunnedah mines? Or is that going to be more like a 4.5 million tonnes start like you had the previous approval for and then you want to do the second stage later? And then in your conversations with potential clients, have you found anyone who's ready for that offtake and perhaps looking to invest in the project as well?

Yes. 3 questions usually means a meeting role. But it's a good question, thankfully, your last one. So look, we're not thinking the 4.5 million tonnes, no, so I don't think along those lines. What we're thinking is that there's -- at this pricing nearly, we can bring on tonnes the better, of course, and we do have spare capacities at CHPP in Gunnedah. So we're talking quite limited tonnes, 1 million tonnes maybe max 1.5 million. But I think if you're going to start factoring into your thoughts, anything here, think about 1 million tonnes would be the right answer, trucked obviously down Blue Vale Road down to the Gunnedah CHPP. We think we can manage that. And at these prices, we think we can take quite a decent amount of money off the table there. And that would assist in the derisking overall of the Vickery proposition in its full form. We do have very good interest in the coal and having made 2 trips to Japan in the last 3 months. That has been the topic of lots of conversation with customers. And as you would know and we've talked about repeatedly, there's a lot of anxiety about the physical shortage of coal. And in Japan, in particular, the impact of that hasn't been fully played out because they are still taking Russian coal and we'll honor contracts until the end of March, we're told, but there will be no renewal. We're also told then after. So it's not as urgent for them in terms of consideration of the physical supply constraints, whereas Taiwan has already stopped taking Russian coal, but they have been very, very aggressive in the market and tidied up next year's volume, we think, pretty well, probably install a bit of a march on some of the other markets in terms of tidying up there. supply for next year. So that's how we're thinking about Vickery small. We are exploring with individual customers ways in which they might support Vickery and -- but that will kick on. And I think we'll say a little bit more about what we think about our plan of attack here with the half year numbers when we put those out.

Our next question comes through from Peter O'Connor from Shaw and Partners.

Paul, I just want to put out there on the public record, Narrabri the lowest cost in the group, kudos to the team and Ian for getting this so well done to stay in the course. Last question on Vickery and the interest in Asia. So it's the interest in high CV product for thermal generation? Or is it the semi-soft? Because there seems to be this disconnected semi-soft interest in price in short term versus potentially obviously long term? First question.

Yes. Yes. Thanks for that. We're very pleased that Narrabri is going and [indiscernible] in agreement. It's very nice to see it's doing what it should be doing and doing better, in fact, than what we planned for, for this year. So let's see that continue during the balance of the year. We know it's early. The interest in Vickery is definitely high CV thermal, definitely. So that's definitely in short supply, as we all know. And so customers are getting quite concerned about that. So there's definitely, as we've talked about for a while, an opportunity to extend those conversations is something more meaningful which we will be doing over the next 3 to 6 months. And it's not the semi-soft that people are focused on.

So does that make this a thermal coal project? So when you're rethinking the staging process, do we think about that as a 50-50 or thereabouts or 90-10 or something? [indiscernible] CV component to maximize returns?

Yes. Yes, it's a good question, Peter. Look, I think we should, long term, consider that the semi-soft deal is an important piece of the puzzle there because as you all know and we know that at some point here, the steel market will revert back to its normal position and pricing for semi-soft will be interesting. But as you well know, over the last 3 years, this is not just the recent inversion of pricing. But in the last 3 years, the incremental price that we could otherwise achieve for semi-soft hasn't been compelling relative to the premiums that we've been able to achieve on the thermal. That in some way is a sign of success or [victim zero] success in some way in terms of negotiating at those premiums on that quality thermal premium. But it is what it is. But I don't think we should be abandoning semi-soft as a feature of the Vickery proposition over time in the same way that Maules will benefit from that over time. The semi-soft at Vickery is incrementally better than Maules so that will be interesting once that comes to the market. But in the shorter term, I think we're all recognizing there's going to be a good proportion of thermal emanating from Vickery.

Understand. Vickery is a entity that is stage development process, and we talked a lot about this just recently. Is this the new model, Paul, for coal developments? Self-funding stage projects? And it makes complete sense with Vickery given the terms of our plan. How do I think about that model? Is that the new industry model than [indiscernible] model? And if that is the case, how do we think about Winchester South where it doesn't have that -- well down the road, you can truck stuff down the Blue Vale Road.

Yes. Well, I'd struggle to characterize it as a model, Peter, when your samples with a project of 1 sort of -- I totally know where you're going. So the question is relevant, but it -- I think our circumstance and the way we're talking about it now and the staged introduction to a Vickery development, it's really a product at our circumstances rather than something that you should apply a blanket to or that would be equally applicable to Winchester South like for instance. If we're right or wrong, funding for Vickery is going to be skinny on the ground, and it's perceived as a thermal mine for right or wrong, I'm not going to get into that argument right now. But in the case of Winchester South, obviously, it's clearly a met coal mine that has a secondary thermal product and funding will be available for that. So the staged approach that we're talking about here with Vickery is a product of circumstances. We do have some surplus take-or-pay. We have surplus processing capacity down the road. We've got very high pricing in the market. So we want to bring something on sooner rather than later. And then at the same time, we can go through the necessary work to make sure that we know exactly to the extent possible what the CapEx cost is going to be to develop the bigger version in this inflationary environment. So that's all those circumstances conspiring to push you down that path, whereas I do think, which is that will be quite different.

And the loss was entirely Narrabri exchange over what date, month or quarter?

It will be late Q3 into Q4, Peter.

Our next question comes through from Alex Ren, Credit Suisse.

2 from me on that buyback -- on the proposed buyback expansion. First one is that is there any split between the proposed on and off market buybacks? Is that 50-50? I'm just wondering since the off market will have to go -- will have to get [indiscernible] pass rate, right? So if that's not approved, how much can you still do with the -- our market program? And the next one is, I'm just touching a couple of numbers, 240 million shares in aggregate at an average buyback price of $10. That's the $2.4 billion. So if those resolutions get approved, that basically -- is that basically imply your preparing go over the 50% online impact capital management policy and would there then be still be room for any dividends that [dips].

Yes. Thanks, Alex. Yes, good questions. If you were trying to analyze that all within a given financial year, I think probably -- your conclusion would probably be right. But we're not planning to do that, obviously, because the approval is in October -- end of October and obviously, that approval extends for a further 12 months from the time of that approval. I think the shareholders have been very supportive. All the feedback we've got, they've been very supportive of the buyback proposition, not just the 10% that we've been -- we've almost finished as we speak but obviously, of the resolution that we've paid before shareholders for our meeting next week. So I'm expecting that to be approved. Now your question about the split is a good one in the sense that -- as you know, there are certain ministry requirements that are required in order to conduct an off market, not the least of which is obviously tax rulings and so on, which need to be in hand before we do that. And then there's the simple matter also of having available franking credits sufficient to be able to do that. Now we paid -- we've paid a dividend recently. That's fully franked. We've obviously got a tax bill to pay in a very short order and then installments thereafter. And that will top up the franking credit balance massy for us. And then the other balancing act there is the fact that because the share price has moved considerably in the right direction, the balance of capital per share is actually as a proportion of the share price that you might start the buyback on has decreased in the right direction. And that enables you to conduct the off-market sooner in a sense than you might otherwise have contemplated. And so the split between the 2 isn't fixed because it does change based on those dynamics I've just mentioned. And -- but they're all positive things. So there's nothing concerning about that in that area. But you do need to have a, the ministry side, things done with the tax office that needs to be blessed formally, and then you obviously do need to have the available franking credits if you're going to bring it forward. So the timing of installments and installments become influential. So hopefully, that helps you understand that. But yes, the numbers you've recognized -- there's substantial numbers, obviously, but that is over the next 12 months, not within the financial year in terms of how you've configured the payout ratio.

Got it. Got it. Understood. Sorry, if I could ask question one more quickly on the market outlook. I think the release notes that both Asia and Europe are now adequately stocked. Does that mean the customer inquiries now that are quite down. And if they are, when do you sort of expect the tendering activities to pick up again?

Yes. Good question. Look, definitely, we -- in terms of this period, normally is a shoulder period. So you normally see people work themselves out for the upcoming winter season and then you see the subdued period. It probably was late arriving, I have to say a little bit, that subdued period, but I think we're seeing it now. But all of the directional tightness we think on the other side of all in Q3 and Q4 from our perspective, look very, very good. So we're certainly positive that you'll see customers back into the market as they start to draw down their stocks during the winter. And so that seems to be playing out as we expected, although I do say yes, the shoulder seem to be arriving a little bit later than we would otherwise expected to see. But I think that's just because of the mad rush of purchasing that occurred in the Northern Hemisphere, trying to fill up stockpiles and energy reservoir will generally be the cash ahead of those deadlines that they had imposed and ahead of obviously the impending colder period of winter.

Our next question comes through from Glyn Lawcock from Barrenjoey.

Paul, just 2 for me. Firstly, you keep talking about absenteeism and labor shortages. I mean, could you maybe just help me understand now, are we starting to see that turn around? And what are you doing to counteract a lot of these issues on the labor front?

Yes. Thanks, Glyn. Yes, I certainly am harping on it. I know that, but that's because it's not turning around in the way that we would like it to. And what are we doing to try and counter that? Well, we certainly, as we've discussed, I think already -- we're offering certain retention initiatives for our people to slow down the turnover. I think that's hit the mark in that sense. So I think that's attractive. Whether or not we're able to hold it at the levels we're paying or need to change that little as the market evolves, it will be yet to be determined. But at least those retention payments paid on a quarterly basis in arrears seeming to have an effect. Trades are hard to find. There's no doubt about that. So we're looking at different roster patterns and including fly-in fly-out arrangements from certain markets to be able to bring the people in necessary to do that. So you have to be a little bit more inventive Glyn, about how you attract these people in there. Now there's the attendant matters that go with that by bringing people in on different roster structures and different pay rates versus other people who are there already, so which we're having to deal with, which need to be ironed out, just to make sure you've got a harmonious workplace. But yes, I mean, these are real things. I mean the shortage is -- everyone keeps I think, forgetting that the government's building an airport in Western Sydney, you've got snowy going on at a pace. You've got tunneling projects all still going on and all these people are taking up skills that we need -- we need as well. And we know that even though the doors are open from our borders perspective, there's not the inflow -- the inflow of people we would expect from an expat perspective into the country. And just on that topic, we are very much focusing on the higher skills areas, in particular, offshore people coming in to fill many of the roles at a more senior technical level across our mines. So there's a range of things that we're doing there in order to combat that. But it is a feature, not just for us. I know that all our suppliers are battling with the same things. And so when we say absenteeism and labor shortages more generally, it's not just on our payroll, it's our suppliers, too.