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Good morning, and thanks for joining us all on our call today. Having got some feedback from you, we have updated the format of today's presentation. We're hopefully presenting the information in a more fulsome way. So we look forward to your feedback after today's session. With me today is Warrick Ranson, our CFO, who will take us through the financial performance at the relevant sections. Over the couple of pages ahead are our usual disclaimers and compliance statement slides, which are available in the deck and on the website for you to review at your leisure. On to the highlights. In Australia, we've had a good start to the year with costs managed tightly, and project timelines maintained, which will see us keep our track -- keep us on track for our 2021 guidance. We do expect copper production to increase over the course of the year as Prom Hill's bottom-up mining sequence commences, and we resolve a short-term mobile plant availability issue at Carrapateena. The stronger Australian dollar and lower gold prices are, however, impacting our all-in sustaining cost and C1 costs. So we have updated our 2021 cost guidance to reflect these changes. In Brazil, however, the situation continues to deteriorate with COVID-19 impact escalating. Sadly, this morning, we were advised that one of our employees who contracted COVID-19 whilst on holiday with his family died from this virus. We are providing all the support we can to his family. This is the first employee we have lost to this virus. And unfortunately, the situation in Brazil is as bad as it has ever been and appears to be deteriorating. As a result of this, we are now expecting flow-on operational impacts, which I will discuss a little later. At the group level, OZ Minerals is in a net positive cash position of $19 million after growth investments and the dividend payment. We have significant liquidity available as we look to advance through our next phase of growth, which is progressing well. So let me give you a few examples of these. The Prom Hill expansion, resource delineation drilling program is going very well, with drill results confirming previous models to date. The West Musgrave study, including drilling and approvals, is progressing as planned, which has given us the confidence to now incorporate our drill program on the Succoth Inferred Resource with a view to potentially incorporating this into the Nebo-Babel base case. The Carrapateena Western Access Road build is going very well, which has given us the confidence to accelerate the build, with completion now due this year, rather than next. The Carrapateena Block Cave Expansion decline early works remain on schedule for later this year, and we've added more exploration projects to our pipeline, and anticipate more being added in the future with [ ahead ] of strengthening our pipeline of options. Those familiar with OZ Minerals know that creating value for our stakeholders is at the heart of our strategy. This thinking has been embedded into our governance system throughout our process standards and how we assess risk. We've also hard wired it into our new stakeholder value creation metrics, so we can make more transparent internal and externally, how our performance in creating value for our employees, communities, our shareholders, government and our suppliers, is tracking. We look at risk and material topics like sustainability through this lens, as those of you who joined us for the sustainability at the OZWay last month, had a chance to see. This is what we believe will drive us to deliver on our purpose. On this new company snapshot slide is an overview of our assets and projects at different stages of development. For clarity, we've called out existing operations from those that sit in our group pipeline. For ease of reference, there is also a quick visual guide on the type of product, copper, gold, silver, and nickel, that they produce or will produce. We expect to leverage our exploration growth program to add new opportunities for this pipeline for more future optionality, and we are continuing to look at alternative approaches to develop this. Similarly, on the company snapshot and organic growth pipeline slide, this is a newly formatted one-pager. We have captured our portfolio and the growth being considered in each products. Our approach is to look for copper-rich provinces, where initial or existing investments can serve as a launching platform or hub for other opportunities, and we've built this momentum by taking this approach to our operations and projects. As you can see, in 2021, our Australian portfolio aims to produce circa 160,000 tonnes of copper equivalent, excluding Brazil. However, with the Cara block cave now approved and assuming the Profile shaft expansion is approved in Q3 and West Musgrave project approved 2022. Assuming that proved investable, of course, OZ Minerals could produce more than double this number once all are operating. This is quite a transformative period for the company. On stakeholder value creation, we believe that it is only when we are creating value for our stakeholders that we can be a successful and sustainable company. These metrics provide a tangible assessment of how and where we create value so we can track progress. During the quarter, there have been a number of value-creation initiatives across the sites. I just want to talk about one. We have reviewed how we pay our people. We will no longer use performance incentives or bonuses underpinned by what we consider largely ineffective performance management systems. Instead, we have rolled these bonuses into fixed pay, trusting that people will deliver. These changes apply to everyone apart from the executives, and have been well received by employees, as it provides income certainty but it also sets an expectation of continual and persistent high performance, hence enhances the environment of trust, learning and continuous individual reflection. In the activity summary slide is our Q1 performance and a brief look ahead at Q2. At a group level, we are on track to deliver end production guidance. With the stronger Australian dollar and lower gold prices, all the sustaining costs and C1 costs have reverted to pre-COVID levels from the lows of mid-last year, which were also influenced by increased gold production from the high-grade gold stockpiles at Prom Hill. As a result of the FX and gold price, we have adjusted our annual unit cost guidance. Prom Hill continues to reliably deliver. The accelerated decline development is ahead of schedule, and we are now establishing level infrastructure for the start of bottom-up mining sequence. The bottom-up and top-down mining will enable an increase in mining rates from 2022 onwards to between 4 to 5 million tonnes per annum. Opening the deeper levels also facilitates access to the potential expansion using a shaft haulage system. We successfully transitioned Carrapateena's underground mining contract to Byrnecut, continue to optimize the operation and also achieved processing records during the quarter. We are working through a short-term issue on below-target equipment availability, which once resolved, will enable higher underground development rates and more movement. Block cave study activities are continuing on plan with the declines remaining on track to commence in Q4 of this year. At West Musgrave, the Board has approved funding for an integrated drill program to infill the Succoth copper resource. This has the potential to take some of the inferred resource to indicated, which may then allow us to either add to the Nebo-Babel mine life of 26 years or add annual production to the project, given that Succoth is only 13 kilometers from Nebo-Babel. Our growth pipeline continues to advance, demonstrating the quality of the organic growth options available to us, with drilling programs at Prom Hill, West Musgrave and Santa Lucia all progressing to support key milestones and decision points later this year. Finally, our financial position, as mentioned, remains robust, with $19 million of net cash at the end of the quarter and significant liquidity available. [ If you ] please, Warrick, for some comments on capital management and cash.
Thanks, Andrew, and good morning, everyone. So yes, before I talk to our cash and cost slides, let me touch briefly on capital management. So our first quarter revenue complemented the ongoing achievement of a number of production milestones. We continue to focus on what's ahead of us and how we are delivering value. In an environment where we have a much stronger Aussie dollar against a U.S. dollar revenue base, our margin performance, of course, continues to be a key focus area for us. However, it was great to see in our recent company-wide management session how we are progressing across the group in our systematic thinking around the use of risk, rolling forecasts, and the broader performance considerations reflected through our stakeholder value creation metrics, as collective contributors to our overall value creation outcomes. Our strong operating cash flow continues to support our ongoing investment spend, as well as maintaining our sustainable distribution of funds back to shareholders through our final dividend payment for last year. Pleasingly, we saw a 25% uptake on our dividend reinvestment plan as part of this distribution and maintained our positive net cash position across the quarter. As reflected on Slide 11, operating costs -- operating cash was principally allocated to mine development and a number of incremental improvement projects in the mill at Carrapateena, as well as that payment of our final dividend for 2020. The Carrapateena spend included the commissioning of a second Jameson cell and upgrades of the concentrate filter press and surface feed conveyor. We also have progressed work on the development of the Western Access Road, which once complete, will give us an all-weather road and 24-hour site access, as well as an increased logistics capacity. Our Prominent Hill resource definition continues in support of the shaft study, along with the development of the Hanging Wall decline. Of note, both included in operating cash flow, we also completed the wastewater remediation activities and continue the progression of the tailings facility Stage V ore lift. Spend in the Carajas was associated with the continued progression of the Pedra Branca underground mine. We had a small increase in working capital quarter-on-quarter with a temporary increase in our Brazil concentrate stocks due to ship departures rolling into early April. We also recorded a final uplift in our low-grade gold stockpiles at Prominent Hill. This has now fully reversed our prior impairment adjustments, and we are now back to carrying that ore stockpile at costs. As previously noted, we subsequently remain net cash positive at the end of March, with $95 million drawn on our revolver facilities. We continue to close out our hedge -- our global hedge book on a contract maturity basis, and that have just under 40,000 ounces remaining with all contracts maturing by end of this year. Moving to Slide 12. And this quarter, we've transitioned to now presenting our unit costs on a consolidated basis. We've also included a reconciliation of our C1 cash cost to operating costs in the appendix. I'm hoping this helps somewhat with the income statement adjustments that we make when presenting our full financial results each 6 months. I'm happy to receive feedback on that as we go. After such a strong quarter 4 performance last year, a higher unit cost performance was recorded with the impact of the stronger Australian dollar, effectively re-basing us for the current year. The reduction in net byproduct credits was primarily volume-related, as we moved into processing the low-grade gold stockpiles at Prominent Hill, as previously forecast. Importantly, we continue to perform well on an absolute cost basis across the group. And outside of the change in our gold and FX assumptions, our full year guidance hasn't changed. We did, however, have our first major maintenance shut in the processing plant at Cara, impacting processing costs, and along with the additional power infrastructure charges we've previously spoken about. Mining costs are also -- partially reflect the timing of maintenance costs on the underground fleet, which we'll catch up with during the second quarter. Transport costs in the last quarter of 2020 did include our year-to-date credits to reflect full year freight rate reconciliations. The negative quarter-over-quarter unit cost variance partially reflects a reversion to our usual levels as a result. Andrew.
Thanks, Warrick. In the following slide, I'm going to cover a few other highlights we haven't previously touched on. So first at Prom Hill. In addition to the sustained growth in operational performance of Prom Hill, the Malu paste plant, which is critical to our sub-level open-stoping method, recorded the highest monthly paste delivery in March, which represents a continual improvement in the performance of the plant, which is great to see. The performance of Prom Hill is also underscored by the signing of an agreement with Safescape to trial our Bortana electric underground light vehicle. This trial will help us inform future transition towards electrification of the underground vehicles, and our path to 0 emissions. In terms of growth and exploration activity at Prom Hill, an integrated team is progressing design and engineering work for a shaft-enabled expansion to 6 million tonnes per annum in preparation for a final investment decision in Q3 this year. Drilling results to date align with our expectations, and work has begun to incorporate this additional drilling data into an interim resource model, that when combined with the study, should -- we expect to see an increase in the reserves underpinning the expansion study.Carrapateena. I'd like to thank both Downer Mining and Byrnecut Mining for ensuring a successful transition of our entire underground mining contract across to Byrnecut. The transition has been successful, but timing and availability of the mining fleet leading up to and post transition, due to a maintenance backlog, has had a short-term impact on ore tonnes and lateral development. We do expect, however, this to be mediated in the next couple of months. Productivity is expected to improve as a result of this. In terms of growth, the Carrapateena Block Cave Expansion Feasibility Study has continued to progress, further derisking the project and allowing rapid development of Block Cave declines to commence later this year. The Block Cave expansion looks to fully capitalize on the value opportunity above that of the existing sub-level cave operation, helping us unlock Carrapateena's potential to be a multi-generation of lowest quartile cash cost producing province. At West Musgrave, as part of the approvals process, the team hosted a site visit to the Environmental Protection Authority at WA, where they also joined the meeting with the traditional owners and the Ngaanyatjarra Council. The team also continued working with the Ngaanyatjarra people to progress the mining agreement and advance engineering design. Field activities resumed at the start of this year, which have kept the project on track for an investment decision expected in '22. Now on to the Carajas and the CentroGold, Gurupi projects. Through our COVID-19 Stakeholder Support Program, we supported surrounding local communities through the donation of hygiene kits. We've donated rapid test kits to the Health Departments of the municipalities, rented additional ambulances and donated oxygen cylinders to the local medical centers. I think this gives us some insight into how much COVID-19 is escalating in Brazil. This has resulted in some challenging operating conditions, and we've seen about 20% of our people in Brazil contracting COVID-19. And as I mentioned, we sadly heard this morning that our first employee lost their life to COVID-19. We are, of course, supporting their family as best we can. Thankfully, all other infected over the past year or so have recovered, but we expect these challenges to continue for some time. During the quarter, Antas [ still ] performed to expectations, despite disruptions and the short interruption of the excessive wet season rains in the region. However, total development of Pedra Branca was lower than expected, with many people requiring isolation following COVID tests. In terms of growth, the Carajas East resource drilling continued at Santa Lucia, and we are on track to deliver a resource and study update in Q2 and Q3, respectively, as planned. While progress at CentroGold has moved more slowly this quarter due to COVID-19, work is continuing on the environmental reports, updating [ with ] the pre-feasibility study and progressing preparation for the village community relocation. Our growth pipeline has held us in good stead, and we will continue to leverage our exploration growth programs to add new opportunities and maintain our agile approach to portfolio management. So just a few things to note here. The drill program at Clovis Prospect was unable to replicate the copper grade and widths encountered during the 2019 drill program. So we are not anticipating any further work on this project. We entered into a new option agreement on the Grota Verde project in the Carajas, with fieldwork now commenced. And just after the quarter, we entered into our first agreement generated by the Drillanthropy Challenge here in Australia, which took a data science lens to how we traditionally generate the exploration targets. The agreement with Black Tiger Resources allows us to drill test targets on the Pandurra Project located on the Northern portion of the Eyre Peninsula, and if successful, we have the right to earn up to 75% of the project. We've updated our asset timeline slide so you can easily see the different assets, projects, stages of development and MROR information at glance. Notwithstanding that it is indicative, I think this helps provide a quick reference to track the estimated delivery of different assets and projects in each province. Moving quickly to the key milestones for 2021. In Q2, we are expecting to release a maiden resource at Santa Lucia in the Carajas East. All other milestones remain the same as that we have shared earlier this year, except for the Carajas West Hub study update, which we are now expecting in Q4 rather than Q3. Finally, closing out this guidance. At a group level, full year copper production guidance remains on track. with Prom Hill performing exceptionally well and Carra [ metal ] expected to increase quarter-on-quarter as short-term [ level ] plant availability issues are resolved. The strengthening of the Australian dollar and lower gold prices are expected to flow through the year, costs over the course of the year, so we have modified 2021 cost guidance. In Brazil, while the team managed to maintain operational plan through the disruption of COVID-19 so far, deteriorating conditions mean we do expect development progress at Pedra Branca to be impacted. This may result in the Carajas East copper production not meeting annual guidance, but we do not expect this to impact the OZ Minerals Group level '21 guidance. At West Musgrave, approvals and permitting continues towards the project investment decision in 2022, now with an added drilling program planned for Succoth. With the additional investment into the Succoth mineral resource development, it is expected the project study for 2021 will now be at the upper end of the guidance range. Finally, our financial position remains very robust with $19 million net cash at the end of the quarter and significant liquidity available. So very much looking forward to a pretty full quarter in Q2 and Q3. We'll now open it up for questions. So operator, can I please ask you to remind our participants how to ask questions. Thank you.
[Operator Instructions] Your first question comes from Rahul Anand from Morgan Stanley Australia.
Andrew and Warrick, I've got a couple of questions on Carrapateena and then one on West Musgrave. I'll take the Carrapateena ones first. Look, I wanted to talk a bit about the transition here in terms of the grade, especially. You've talked about -- I mean, I can understand how the maintenance was impacted and there was a tonnage impact. But if you can perhaps talk a bit about the grade. And then, I guess I ask this question because you've talked about a slow transition back to reserve grades. Even if I run the 1.5% grade from the second quarter straight through the end and I run the mill to capacity, I still get a bit below the bottom end of guidance. So I just wanted to understand how the guidance is being maintained, and how you're thinking about perhaps tonnages and grade? That's the first one. I'll come up back for the second.
Okay. Sure, Rahul. So a couple of things here. So firstly, the shorter-term impact is around mobile equipment availability. And that's the transition issue as we've transitioned between different underground mining contractors. So they've got a plan in place which they're actively working through, now quite successfully today to bring in all of the fleet back up to where it needs to be and potentially beyond that. So we -- I don't anticipate the current issues we're seeing, persist through the course of the year. So that will bring our development rates and our production rates back up to at or above plan. In terms of the grade, you saw a slight dip down in grade this quarter compared to last quarter, and that's really just timing. So if you remember, the ore body itself is zoned, if you like, from high-grade to middle outlooks, and it's really just to [ establish about where the sub level ] is pulling ore from. So you will see the grade continue to increase quarter-on-quarter here as we start to get into the center of the ore body, and we start to get deeper and pull deeper sub-levels out. So we're quite comfortable in saying that the graded profile over the next 3 quarters through the end of this year will support the guidance we've issued, given the mining volumes we're expecting.
Okay. The only reason I asked was the release, that it was going to trend towards reserve grade. And last time I looked at the reserve grade, it was around the 1.5%. And I mean if you run the 1.5%, you don't get to it. But that's fine. I'm sure you've looked at the detail. In terms of the recoveries...
Rahul? Can I just add one point. So yes, it will go to reserve grade over the longer term, but you'll actually see increases above reserve grade for short periods. Remembering that the top of the ore body, once we're out of this weathered zone at the top, that the [ metal in ] the top few levels is above average reserve grade.
Yes. Okay. That makes sense. And then the second on Carrapateena was around recoveries. Look, you have the second cell in place now. I just wanted to sort of talk about the recoveries, obviously, above the study levels, both for copper and especially for gold. Have you seen some more data now? How are you thinking about recoveries for the life of mine plan?
Yes, Rahul, good question. So we're a bit reluctant, however, it's basically the same comment I mentioned last quarter. So yes, recoveries are very good at the moment. We've got the second cell in place. That supports recovery. But we're also using the second cell to optimize the process plant to deliver the right step to the right customer. So we do vary our flow sheet, depending on which customer we're delivering to. It's too premature at this stage to be up to date or changing our estimated recoveries. Because we are still pulling ore from those top few levels, which do tend to have some weathering, if you like, in that [ full center ] we talked about previously. We are watching it very carefully, though. I just wouldn't update your models to higher recoveries yet.
Okay. Perfect. And then my final question is on West Musgrave. So on the financial results call, Andrew, we'd spoken, and we were talking about Succoth, and you'd said that it was not really part of the scope back then. I just basically wanted to understand sort of over the 2 months, what has changed, now that you're progressing with that drilling and how we should be thinking about it?
Yes, a good question, Rahul. I'm going to ask Warrick to add to this here in a second. But I mean, the main thing, the project -- the Nebo-Babel project and the drilling there is actually going really well. So the study is going very well. We're reinforcing the resource model we've got at Nebo-Babel, and that's where we were -- we wanted to make sure that the team has stayed focused on the project and the scope in building that investment case up, and I'd say it's tracking 2 of our plans at the moment. So the other thing is that we, last year reinterpreted the Succoth resource model, which gave us probably a slightly different interpretation of the ore body itself. And there's 150-odd million tonnes of inferred resource sitting there, at about 0.6% copper. So that's a fairly sizable deposit. Now what we believe we can do after some further investigation is drill half of the center of it to improve our confidence. We'll probably aim to take at least half of that to indicated. And if we can take it to indicated, we potentially can put production targets around it. So that then gives us the option of doing a few things. One is extending the mine life of Nebo-Babel beyond the 26 years to incorporate that indicated component. It gives us the option of increasing annual throughput at the West Musgrave project, if we can demonstrate it adds value, and/or if it also gives us a mechanism to derisk nickel pricing by increasing the copper content of the project in its totality. So for a fairly modest program of $12 million, we feel this actually gives us quite a bit of optionality and can have the potential to actually change the shape and scope of the project. Do you want to add anything, Warrick?
The only other thing [ just for ] all the reasons that Andrew has indicated is we are seeing certainly a tightening in drill availability in the West. So whilst we've got the drills there, it sort of adds to the logic of [ grossing ] that now.
Your next question comes from Paul Young from Goldman Sachs.
Andrew, Warrick, a few questions on Carrapateena and then also a question on West Musgrave. Andrew, just on the transition from Downer to Byrnecut. Just curious about what actually happened there as far as -- what resulted in the drop in mining rates? Was it the fact that mining equipment had to come from the other states? And I'm also curious about, is the mining fleet back up to full capacity as far as the number of units, as we speak today?
Yes, sure, Paul. So just to recap. So we've been using Downer underground mining services for our underground mining contracts for the past few years. At the start of this year, we agreed with Byrnecut that, that contract would transition from Downer to Byrnecut. That transition is now complete. As part of that transition, we effectively agreed between the 3 of us, that all of the fleet and the people would move from the Downer contract to the Byrnecut contract. So the same fleet that is on site today was on site earlier during the Downer period. So we haven't actually seen a material change in the people or the fleet. It's just the parent operating that. One thing -- one of the areas that we've been focused on, I'll say, over the past 4 or 5 months is the maintenance regime around that mobile fleet. And it's actually quite a backlog of maintenance activities, including mid block, rebuilds, et cetera, on that fleet that need to be completed. So Byrnecut put extra resourcing and plans in place to get through that backlog. It's that backlog of availability or lack of availability that's caused us a dip in development rates and production. So we're working through that plan, and we expect over the next couple of months that we'll be back to where we need to be.
Okay. Andrew, second question is on the record monthly throughput through the mill in March, equating to, I guess, 4.9 million tonnes per annum or thereabouts. Clearly, you can't operate at that because the mine is not at that rate. But just curious on the mill, does that prove the fact this mill can do 4.8 million and close to 5 million, I should say? I know you're trying to push the underground ultimately beyond 5 million. What more do you need to do to the mill to push it beyond 5 million?
Yes. Look, Paul, actually not very much. So we've now installed the new tailings pump system, a new TP pump. So we've got pumping capacity. The mill effectively is operating pretty close to 5 million, as you already indicated. So we're fairly comfortable that the mill can support the mining ramp up to 5 million tonnes. So I would say the focus is now on underground and sequencing. And as you know, we're still getting out of those top few levels to get us into a standard operating sequence. So it's still going to take us another year or so to get up to that drumbeat. And then of course, the second crusher, once that second crusher goes in, in 2022, that will enable us to step up to that 5 million tonne run rate because we can feed [ underground ] ore passes to that crusher. So I don't think there's all that much more to do. There's a few incremental things, but not that much more to do to the service infrastructure. It's all [ down underground ].
And then a question on West Musgrave, Andrew. In West Australia at the moment, there's clear signs of labor tightness -- contractor tightness, CapEx increases across steel and other imports and this -- effectively it's [ ballooning ] over there. So as you work through the feasibility study of West Musgrave, what are you building in as far as escalation and inflation is concerned into the base case? And also tying in, I guess, with environmental studies, is that the critical path, or is it availability of suitable contractors that can actually execute on this project?
Look, I think that's a great question. So there's no doubt that resources across the board are tightening in Australia, but certainly in Western Australia. So they are things that we are thinking about and factoring into the study. We'll talk more about that in due course, of course, once we've actually built some of those assumptions into the project. I'd say the approvals pathway, we would still consider to be the critical path activity. So the work or the submissions we've made for our environmental assessment have actually gone very smoothly. The work with the Ngaanyatjarra people is going very well in building that relationship. So I think it's still going to be the approvals pathway that's the constraint. But in terms of the study, the scope, the way we execute, the types of contracts we actually put in place in the end, is all still being debated to give us an optimal risk balance outcome. So I think it's exactly the right question to be asking. I'm just -- we just can't answer it yet because we're still working through it.
Yes, right. So as far as escalation and inflation, you're saying you're still working through that, those assumptions?
We are, yes. But we clearly will be taking into account the tightness of engineering design, but also importantly, people and construction capabilities.
Okay. Great. And Andrew, have you ordered any long lead items on West Musgrave yet?
No, not yet, Paul. They are potentially coming up in the plan this year.
Your next question comes from Sophie Spartalis from Bank of America.
Andrew, Warrick and Tim. Just wanted to follow up from Paul's question on the labor market. Can you just go through why the change in the KPIs to your own workforce? And has that been more isolated to the workers who are out on the mine site, please?
Sophie, can I just check, when you say the KPI, are you talking about the change in the remuneration frame that we put in place? Is that what you mean?
Yes.
Yes. Okay. So what we've actually changed is that all employees of OZ Minerals across the business, with the exception of the executive team, we now no longer have short-term incentives or bonuses in place. We've actually rolled most of those bonuses into their fixed remuneration. What comes along with that, though, is the expectation of continued high performance and a focus on learning and development with reflection and a developmental approach to work, if you like. We've also now removed the performance management system. So I'm sure most people on this call will be part or have been part of a performance management system, where you get to the end of the year, and you are assessed as a score, at 5 or whatever. We have found, and I think all of the industry and all of the literature finds, is that actually is a demotivating process. And generally doesn't motivate people to do better work. So we've removed that system. We are pivoting ourselves more to a learning and development-type organization, but with the expectation of continued high performance. And if we they don't perform, we try and move them towards development to perform or out of the business. So that's the change that we've made. It's been very well received around the business. And it's only for, as I mentioned earlier on, all employees across the business with the exception of executives who maintain the KPI system and the bonus structure.
Okay. So in terms of the workers at the mine site, where you do have these guidance targets in place. Where is the support for those -- for them reaching those guidance targets? Like how -- is it just the expectation that they'll meet them? Or is there some kind of trigger that if they do meet them, they get additional bonus? You're saying that everything is fixed now. Is that -- have I interpreted that correctly?
Yes. So for all employees of OZ Minerals, there is no bonus system now.
Okay.
And then, on the mine sites, Sophie, but remembering that some of the people that work on the mine sites are not employees, they work for contracting companies like Byrnecut.
Yes. No, that's fine. And then just in terms of Byrnecut and the transition of the people and the fleet, that's quite unique. Is that also a reflection of where the market -- labor market is sitting at the moment in Australia, that you had to hold on to those people?
No, not so much. It's more just our approach to the way that we create value for employees and our suppliers, I would say. So at Carrapateena, we had a large number of people who reside mostly in South Australia working at Carrapateena, and they are good people. The quality of those people is not a reflection of the company that they work for. So we, as part of the transition, offered -- or Byrnecut offered nearly all of them a role in the Byrnecut contract to stay on at Carrapateena, and nearly all of them accepted that.
Okay. Just switching gears to Brazil now. You mentioned in your opening comments that when you're investing in certain jurisdictions that you see that as a launch pad to further building out that province. I guess that was the intention when you initially entered into Brazil. Obviously, it's gone a lot slower than planned, and much more challenging. And now we've got the situation with COVID. Do you still see Brazil as an attractive place to do business going forward, and still proving up and building out that capability over there?
Look, we do. The Carajas is still a highly prospective terrain for copper deposits. And Brazil has -- largely has the technical capability and confidence to develop those deposits. And there is no mid-tier sector in Brazil. So those fundamentals still very much exist. So the value proposition for the Carajas and our investment in it still very much exist. We review our position on these sorts of things frequently. And COVID has added a very complex and difficult overlay to all of this. So I don't think we're about to make any rash decisions in this environment, because our first priority is to look after people and make sure that those people are supported and their families are supported, which is where our primary focus is today. But in terms of the value proposition in the Carajas, that very much exists, and it's still part of our plan.
Your next question comes from Lyndon Fagan from JPMorgan.
Look, the first one is just again on West Musgrave. With now an FID in 2022, looks as though you're now quite comfortable running West Musgrave and the Block Cave at Cara in parallel. And I'm just wondering whether that's now a function of where pricing is or your expectation of pricing, or whether there's now increased confidence in the company's capability to execute 2 big projects at the one time? Because from memory, you were looking at doing them sort of one after the other, previously.
Yes. Lyndon. Look, this is not such a pricing debate or question. But just to recap timing, the Block Cave at Carrapateena is already now improved. So that's built into our base case. So the next, what is it, 2.5 years, 3 years, for the Block Cave is effectively decline development. So it's continuing the main access declines from the second crushing chamber, when we get there, later this year, to the bottom of the Block Cave design level. So that's the work we need to do over the next couple of years. So that's not high-capital-intensity work. It's very much what I would consider just normal everyday mining type activity. Whereas if we go ahead with West Musgrave, the bulk of the spend will be from '22 to '24. So they're not necessarily large overlapping capital projects. The spend would be West Musgrave predominantly first, and then Block Cave currently second, if West Musgrave goes ahead.
I think the other thing, Lyndon, is that, yes, it's a different skill set. So on one, we're building out plants and surface infrastructure. The other one, as Andrew said, is underground mining developments.
Okay. And look, the only other question I had was the injunction in Brazil for CentroGold, I imagine that's all slowed down because of COVID, but just wondering if you've got any color on where we're up to with that.
Yes. Look, it has slowed down, Lyndon. But we're working through now with the state, finalization of the community relocation plan, which is the last step that we need to take before we can launch an application to the court for the injunction removal. That process is going well. We're still working through the finalization of that community relocation plan. I can't give you much more than that yet. Once the state approves the relocation plan, which we do think is imminent, we can then launch the application to the court.
[Operator Instructions] Your next question comes from Tim Hoff from Canaccord.
Just a quick question from me. Thanks very much for breaking up the TC/RCs in transport into separate line items. I just was noting that there's a fair jump-up in that combined cost of about $0.14. Has that been an increase in transportation costs leading to that? Or is that more of a reallocation between how you were splitting it before?
Tim. No, it's really the Q4. In -- our Q4 numbers last year, we picked up our year-to-date -- or full year reconciliation of our freight rates. So we -- because of the timing of sales, we charge through on a nominal basis. And then we reconcile it towards the end of the year. So you've actually got probably a slightly understated position in relation to the Q4 costs. So it's not so much -- it's more a releveling, I suppose, of that cost rather than anything in particular in terms of freight or to [ adjust ].
Right. Coming back to the average more. That was all.
Your next question comes from Peter O'Connor from Shaw and Partners.
Andrew, Warrick. Andrew, you mentioned to an earlier question. I think the term used was nickel comfort level. Over the course of different quarters, with Musgrave you often referred to nickel with less confidence than copper, which [ came out again ] today. Where are you at with the views on nickel? I know you've talked about doing a lot of work last call, and that work's evolving. But why that lack of comfort relative? Is it just because nickel is not your core business? Or is there something more to it?
Yes. Peter, I would say our comfort in the nickel, the commodity itself, the market, the technology that's used, has been growing quarter-on-quarter. So it's not going -- certainly not going backwards, and I didn't mean to imply that we were less comfort in -- less comfortable in nickel today than maybe we have been. I think we're getting more and more comfortable and that seems to be where the markets generally are moving with respect to nickel. And high-capacity batteries are increasingly demanding nickel and electric vehicle penetration rate seems to be increasing, not decreasing. So everything that we are learning about nickel suggests that this is a commodity that has a good robust future to it. My comment around copper is, since the size of the copper market is very different to the size of the nickel market, and nickel is more volatile than, historically at least, than copper. So having Succoth there as they potentially turn nickel volatility, in my mind can only be a good thing. Whether we need it or not is a different question. Having options at these mine sites, I think, is just so important to maximizing value. And when you've got a third open pit with a different commodity mix, i.e., Succoth being all copper, that just gives us a lot more flexibility to create the most value we possibly can. And for a very small investment, I think we can actually quantify that option for us.
Is part of this proportion of nickel revenue as a whole in the company, is there some trigger that you look at to get that comfort, in terms of the answer that you've just given? Or is that just an outcome of the inputs, it's another driver?
No, not so much, Peter. West Musgrave really doesn't have a material bearing on our portfolio mix between copper and other metals. So there's no number. We don't have a magic number per se we're trying to stay under or over.
To the TC/RCs, given the moves in spot TC/RCs, just remind us of the formation of the TC/RCs and the contract structures you work under? And how do they change? How do they evolve? And how do we see the current spot influencing that number in any way?
Yes. The spot, Peter, doesn't really -- we don't do a lot of spot trades. So we are basically benchmarked, with some adjustments depending on customers. So they must lock in for us once the benchmark established.
Okay. And Andrew, on COVID in Brazil, are you referring specifically to the Carajas location you have in the Carajas area in general, or are your comments about COVID in Brazil, it's really a pandemic countrywide issue?
Yes, Peter, my comments on COVID are more Brazil-wide. In fact, COVID in Cara [ Hub ], it's slightly better situation than Brazil on average. So the community in the Para region have a slightly lower infection and death rates than Brazil as a whole. My point more so is that it's probably as bad there as it's ever been, in terms of number of infections and deaths per day, and there is no current sign of that trajectory changing. So that's what I guess we've been worried about.
There are no further questions at this time. I would now like to hand the conference back to Mr. Andrew Cole.
Okay. Well, thanks, operator. Thanks all for dialing in. If you've got further questions, please give Travis a call. And also, if you've got any feedback on the updated slides and their format, please send them through Travis. We'd love to hear what you think. Thanks very much, everybody.
This concludes today's conference call. Thank you for participating. You may now disconnect.