of 1.5 cents per share is scheduled for september 29th payable to shareholders of record as of september 22nd as mentioned capex in the second quarter increased to 17 million dollars and we expect the second quarter to be the high point of capex for the year overall we improve our financial position with net debt and adjusted close debt declining by 17 million dollars and 20 million dollars respectively at this time i will turn the call back to marco thank you

beatrice before opening the call to q a i'd like to provide key takeaways from today's presentation on slide 15. we are pleased with the direction of our second quarter performance with solid improvement in volumes and financial metrics. However, we still have strong headwinds to navigate. The silicon metal market is improving but price and volume levels in Europe remain unacceptable as Chinese and Angolan imports continue to exert significant pricing pressure. We expect the European Commission to begin an investigation into imports of Chinese and Angolan silicon soon. Our strategic direction is very clear. Build a leading Western critical material platform by expanding our product offering. We have the footprint, know-how, experience, and customer relationships to make this a reality in a relatively short time frame. Improving our own competitiveness is essential. We are executing aggressive cost reduction initiatives and enhancing our cost position through higher capacity utilization at our most competitive asset. Part of the strategy is to restart Venezuelan operations to complement and add flexibility to our broad footprint. With 120,000 tons of capacity in Venezuela, we have a significant low-cost opportunity to capture incremental volume in the U.S. and greater optional flexibility. Another significant part of our Our strategy, and the one we have been diligently working for the past few years, is to protect our core market. We have succeeded in protecting the US market and most of the EU market, except against China and Angola in the EU. Operator, we are ready for questions.

Thank you. We will now begin the question and answer session. If you wish to ask a question, you will need to press star 1, 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1, 1 again. We will take our first question. And the question comes from the line of Nick Giles from B. Riley Securities. Please go ahead. Your line is open.

Yeah, thank you, Operator. Good morning, guys. I wanted to start just on the critical materials side. There's been some excitement in the space this week. There's an event this Friday at the White House. So can you just touch on where your conversations stand with the relevant agencies and how quickly you feel that you could scale domestic production of adjacent critical materials? Thank you.

Yeah, the discussions are progressing very fast, particularly in the United States. By the way, good morning. We – there are two departments that are particularly active, the Department of Energy and the Department of Work. we are we're following the process that they have suggested to us I have to underline that we've been engaged with the Department of Energy for the last two years and the pattern of war since February of this year and we have got regular interaction recently we prepared our initial proposal for them particularly the Department of War we've been asked the day after the presentation life and then we have been asked to proceed filing our proposal as suggested by their process. The next step is going to be based on providing a more detailed proposal including our asks to make it happen in the areas that the departments feel are their priority, and then we expect to progress with our investments.

Thank you, Marco. That's very helpful. Maybe just as a follow-up, when would you be prepared to share with the market kind of more details around which products you would be targeting, kind of the potential economics you see around producing those products, and ultimately any of that government support.

Well, first of all, I mentioned the products in my pitch, right? I mentioned magnesium. I mentioned silver. I mentioned gallium. I mentioned few ferrolloys. so in my pitch before I have been very specific on on the products now if you look at the ferrolois part these ferrolois can can be produced with no minimal capets investment in our current furnaces and we are as mentioned in my beach we have started making some industrial tests we have been producing tons of ferromolyte data in spec and and and now we are trying to understand better understand our cost position in order to to be able to to share our estimates. We will proceed with the other tests before a year end because in the meantime, of course, we have studied the market, we are acquiring knowledge, but we want to understand what is our cost position relative to others. I must say that we have technology on the shelf and we plan to produce these products with an alternative technology that we expect will provide some cost advantages versus current competition. The magnesium game is a game that we have played in the past. FerroGlobe has been producing magnesium in France in the past until FerroGlobe at the time was i think for atlantica has been kicked out from the market by china and and today there is no production of magnesium either in europe or in the us and in us alone there is a demand estimated demand of 60 000 tons of magnesium so of course there are a lot of people who are working at starting up production of magnesium but we have been producing magnesium so we our proposal is to start investing in a plant of 20,000 tons of magnesium investment will be between 180 and 200 million dollars we have we are to implement recycling technologies to produce the silver and gallium with minor capex investment so timing by the end of the year we expect to have a pretty clear competitive position on our fur alloy production and we expect we expect to be in the market with some of the alloys for the other products we need to we need to follow the process with the American authorities Marco thanks again for all the detail.

If I could, there were some headlines around the White House setting price floors on polysilicon and derivative products for solar. And so I was curious if you could walk us through how GSM stands to benefit. What do you think this could mean for volumes in the US. Thank you.

Yeah, I think this is a pretty wise initiative from the American government. It's related to Section 252. There are only two polysilicon players or significant polysilicon players left in the United States, Amlock and and Bakker, and their cost position is absolutely disadvantaged versus China, which owns 95% of the polycylican global capacity. Many disadvantages not from a technology point of view, but simply from an energy cost point of view. So I think the floor price is one of the options to protect the local players, and if I set at the right level, probably it will allow these people also to improve capacity, which is driven by by solar and microchips demand so the the consequence is going to be more demand of silicon metal in the united states that's very good to hear um i'll go ahead and turn it

over for now but appreciate all the comments thank you nick thank you once again if you wish to ask a question please press star 1 1 on your telephone we will take our next question and the question comes from Martin Engler from seaport research partners please go ahead your line is open hello good day everyone wanted to start with the euro area given the change in trade policy on this downstream steel side what are you seeing with capacity restarts from some of the customer base now moving through second half here what are they

conveying regarding their alloy needs in the back half of the year and then any read on the inventory situation in the channel as well if we talk about I mean, the main factor in Europe is the impact on aluminum production as a consequence of the almost crisis, right? and and the the fact that the export outside of the Middle East to Europe has been largely impaired has impacted the production and of aluminum in in Western Europe and as a consequence that amount of silicon made up concerning concerning still as all of you know there are new measures that have been implemented as of July 1st with a further caps of the safety for imports by 50% and a fee increase of 50% it is too early to to to mention the effect on on demand for our products but but it is true that some steel makers have announced the restart of some of their blast furnaces in in Europe and and some others have announced capacity expansion so the the the environment sounds pretty good for for aluminum and steel at this stage concerning chemicals is is that is a different kind of of situation due to the to the fact that the the issue of energy cost in Europe has not been fully addressed to restore the competitive position of the European players.

I appreciate that and then silicon metal volumes which you touched on earlier, quite a bit of a sequential improvement in 2Q here, it's trying to understand incremental demand opportunities that drove and contributed to that if there was any one-off items as far as like a channel restock or anything like that that came in to drive the volumes yeah well if we talk about the the silicon metal volume improvement and again the volumes are far below our run rate of 2024 right rather than 60 70 thousand

tons per quarter this quarter we have improved from 30 to 40 thousand which is mainly related to to see to the nature of our contracts and the the restart of of demand in Middle East Asia of silicon metal the overall situation of silicon metal in Europe has not changed as you can see from from from from the pricing situation and and I must say that it has even got more problematic due to the continuous increase of export outside of China and Angola even the statistics of this year while last year this was China and Angola more than double the export this growth keeps on happening and is linked not to the land of silicon metal in the traditional segments but to the partial replacement of ferro-silicon with silicon metal at Chinese or Angola price so we have concluded our incredible effort to provide data to the Commission now they have five years of data they should be almost ready to proceed to the next step which is a publicly announced an investigation and then hopefully we can help them to speed up on the final decision on putting some additional measures okay thank you one last one you had discussed cost reductions

efficiency gains targeted anything you can put around the scope of those efforts as far as dollar amounts that you may be targeting here in these programs?

My opinion is premature. What we have decided to do is really revisit our asset for footprint. There are assets who are extremely competitive in the top quartiles in terms of cost performance and this is where we're going to concentrate our productions other assets are going to be repurposed for the production of new critical raw materials mainly the ferro lois that I mentioned we will make and of course having energy contracts we have also other opportunities it goes without saying that we've well with this kind of exercise we will need to to address the remaining costs I mean overhead costs that we need to support this new activity so we are information we will communicate more precise numbers later in the year okay i appreciate the additional color there thank you for your time thank you thank you we will take our next question your next question comes from the line of nick giles from b riley securities Please go ahead.

Your line is open.

Yeah, thank you for taking my follow-up. I just wanted to ask a question for Beatrice. Working capital improved in the quarter, so I was curious kind of what working capital could look like in the second half, whether you would expect a build if volumes were to increase, and just kind of what this means in terms of your appetite for shareholder returns? Would you look at kind of resuming the buyback just given where the stock is today?

Yeah, thank you for the question. So let me take one step back. In Q1, we consume working capital. In Q2, we release $28 million. And then we see the second half of the year, let me put it like that as an overall release of working capital and I think this is a way we plan to continue with you with it with the operations ramping up some of them some of them are either so it's a kind of a mix a bug that will happen in our operations for the second half of the year for the reasons that you know but my best estimation at the moment is that we want to be still releasing working capital for the second half of the year around I would say 50 millions and 15 well five yeah well five five zero that and then of course a way they couldn't bucket environment and why we are taking the decisions there on critical material. Our choice is not to resume the share buyback program for obvious reasons, but we continue to assess this, I would say, on a weekly basis, Nick, to your point. Yeah. So as soon as we see that we have the opportunity, we will do it.

Great. That's good to hear. I appreciate that. Maybe just one more operational question. Fezzy volumes have been much stronger year to date, and so I was curious just if we could see further upside in that number, where it would come from, or if we should really just be modeling kind of more of the same, you know, somewhere around this 60,000 ton per quarter level.

Yeah, if you talk about ferro-silicon in Europe, the safeguards have laid in our favor in terms of volumes due to the quotas of importers. and now we have we average the volume level that is that we expect that we're going to sustain in the second half of the year in the in the US I would say that is a different is a different comment because we didn't have safeguards we had strong wings on on anti-dumping and basically there are no imports anymore from from from Russia almost zero from from Kazakhstan and almost zero from from Brazil but that by these like I mentioned in my pitch these imports have been replaced by by outcome from different locations but the disturbing factor has come from the over capacities in middle east and and and asia and and africa and i mentioned angola angoli angola and uzbekistan and bhutan so i i think in in terms of demand in us we have opportunities to grow through silicon and this is linked to the fact that steel product utilization rate has increased now has been going down recently a little bit but we're still at 80 percent versus 74 percent last year so there is demand but but but pricing is not optimal so we we will need to balance out between volume volume and

price decisions understood well guys I appreciate the update this morning and continue best of luck thank you thank you this concludes today's question and answer session, I'll now hand the call back to Marco Levy for closing remarks.

Thank you. Very shortly, in a nutshell, we have excellent opportunities to grow our business as we continue to execute our strategy refresh, and we are excited to keep you informed about our progress. Thank you again for your participation. We look forward to updating you on the next call in November. Have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.