Mineral Resources (ASX:MIN) executives said the company delivered its strongest six-month performance ever in the first half of fiscal 2024, highlighting record earnings, improving free cash flow, and early progress on balance sheet de-leveraging following the ramp-up of the Onslow Iron project.
Managing Director Chris Ellison opened the briefing by acknowledging the death of Strategy Director Tim Picton, saying Picton’s “brilliant strategic mind” and work ethic left a “long-lasting legacy” at the company.
Record first-half earnings despite softer commodity prices
Chief Financial Officer Mark Wilson said the “quality of the earnings” was a key feature, describing the record half as driven by operational performance, volume growth, and cost discipline rather than “commodity price luck.”
- Mining services underlying EBITDA: AUD 488 million (record), with EBITDA per tonne margin of AUD 2.10
- Iron ore underlying EBITDA: AUD 573 million, including AUD 519 million from Onslow Iron
- Lithium underlying EBITDA: AUD 167 million, with an average SC6-equivalent price of $972 per tonne
Onslow Iron ramps and pushes toward higher run-rates
Ellison said Onslow Iron reached nameplate capacity in August and has since sustained nameplate production, with upgrades to the haul road completed in September. He said the project contributed just over AUD 500 million in EBITDA over the six months, and described Onslow as central to the company’s earnings profile. At an iron ore price of $100/tonne, he said Onslow Iron would generate “over AUD 1 billion of annual EBITDA.”
In Q&A, Ellison told UBS that 38 million tonnes is the “safe number” the company expects as additional transhippers arrive, but he is encouraging the team to “sweat the assets” toward 40 million tonnes over time. He said transhippers six and seven are expected to arrive around May/June, with transhipper six likely coming into action around late July and transhipper seven supporting maintenance and contributing additional tonnes later, “about October.” He also said cyclone-related downtime is expected to be a recurring factor, noting a recent cyclone cost about five days and the company has built weather downtime assumptions into run-rate expectations.
Ellison also addressed questions on channel conditions and dredging, saying the company expects to smooth uneven ground in the turning basin using a tug and later bring in a small suction dredge in April/May to remove silt. He described “38 million tonnes” as the number investors can “hang your hat on” at present, with further improvements expected to be incremental.
On haul road resilience, Ellison told Jarden that a recent cyclone brought about a third of the rainfall seen a year earlier and caused “zero damage” to the upgraded road surface, allowing trucks to return quickly once roads reopened.
Mining services: record volumes and growing client interest
Ellison said mining services delivered record volumes of 166 million tonnes and EBITDA of AUD 488 million, up 29% on the prior year, supported by Onslow Iron execution. Wilson added that sustaining capex for mining services was only AUD 24 million in the half, underscoring cash generation. He also said mining services earnings included a “significant contribution” from the Onslow Iron Road Trust, described as an “infrastructure-like cashflow annuity stream” that is inflation-indexed.
Asked by Morgan Stanley about the AUD 2.10 EBITDA-per-tonne outcome, Ellison said the business “overperformed at Onslow Mine,” removing contractor trucks earlier than expected and achieving high ramp-up rates, which helped results. He confirmed the contractor trucks are now off the main haul road and the operation is running solely with the jumbo trucks.
Ellison said interest from potential clients has increased after Onslow Iron, and that the company was awarded two new contracts and renewed three contracts during the period. He said the company is primarily focused on domestic opportunities for now, though it has looked further afield and may do more offshore over time. He also emphasized MinRes’ in-house construction capability—delivering lump-sum, fixed-price projects—as a differentiator in an Australian market where he said the cost and time to build mines has sharply increased.
Lithium operations, POSCO partnership, and capital discipline
On lithium, Ellison said prices improved from about $600/tonne for some cargoes in June to around $970/tonne across the half, and said the company sold a cargo for $2,500 in recent weeks. He said MinRes cut costs and drove efficiency improvements during the weaker price environment to retain leverage to an eventual demand upswing.
Ellison cited Wodgina processing recovery rates of around 70% in the December quarter, and said recoveries are expected to improve further as the company accesses more fresh ore and goes deeper into the pit toward the end of the calendar year. In response to UBS, he said the timeline is driven by stripping requirements—after pulling back mining equipment when prices fell—and the company expects to have “most of that rock off by the end of this year,” positioning Wodgina “come start of next calendar year” for improved performance and a slightly higher grade feed.
At Mount Marion, Ellison said the operation achieved higher feed tonnes and improved recoveries, with studies continuing on a float plant and underground development. In a follow-up, he told UBS that a 500,000-tonne SC6 capacity figure reflects “current steady state” and does not include additional float plant recoveries or underground feed.
Ellison said the company announced a transaction with POSCO in November, describing it as a balance-sheet strengthening move that preserves exposure to lithium and retains mining services contracts. He said the company is also assessing growth options including a potential Bald Hill restart, with studies ongoing. In Q&A, he rejected the idea of renegotiating the POSCO deal despite recent lithium price strength, saying he remains “happy with the deal,” and arguing it should enable debt reduction and fund brownfield upgrades that could ultimately increase MinRes’ attributable spodumene output.
When asked about lithium offtake structures such as floor pricing, Ellison said MinRes would not pursue those arrangements, noting the company has been achieving pricing above index levels on recent spot cargoes in a rising market.
De-leveraging underway; no interim dividend
Wilson said free cash flow was AUD 293 million for the half after AUD 600 million of capex, and net debt declined by almost AUD 500 million to about AUD 4.9 billion. Liquidity rose to over AUD 1.4 billion, including more than AUD 600 million in cash and a fully undrawn AUD 800 million revolving credit facility.
He also said MinRes refinanced a US$700 million bond in October, extending maturity to April 2031 at a 7% coupon, which he described as the company’s lowest-ever coupon rate.
Wilson outlined an updated capital allocation framework and financial policies, including maintaining at least AUD 1 billion of liquidity (including at least AUD 400 million of cash), a leverage target of below 2x net debt to EBITDA through the cycle (with limited exceptions during major projects), and a discretionary dividend policy of paying up to 50% of underlying NPAT—subject to meeting liquidity and leverage thresholds. He said the board chose not to declare an interim dividend, describing the decision as prudent while focusing on strengthening the balance sheet.
On sustaining capex, Wilson said the company still expects around AUD 500 million per year, even though the first-half number was lower. He added that capitalized interest was “almost negligible” in the interim result.
Ellison said management remains focused on operating safely, meeting guidance, optimizing existing assets, and continuing to improve the balance sheet, while keeping potential growth options under review as conditions and leverage metrics evolve.
About Mineral Resources (ASX:MIN)
Mineral Resources Limited, together with subsidiaries, operates as a mining services company in Australia, Asia, and internationally. It operates through five segments: Mining Services, Iron Ore, Lithium, Energy, and Other Commodities. The company offers contract crushing, screening, and processing; specialized mine services, including materials handling, plant and equipment hire and maintenance, tails recovery, and aggregate crushing; and design, engineering, and construction services for resources sector.
