Mineral Resources Limited (ASX: MIN) has released its activities report for the three-month period to 30 September 2024.
Q1 FY25 KEY POINTS
Board Investigation
- Following the end of the quarter on 20 October 2024, the MinRes Board confirmed in response to media speculation that external legal counsel had been engaged to conduct an investigation into matters relating to managing director Chris Ellison. The board intends to issue an announcement to the market regarding the conclusions it has reached and the actions it will take by 4 November 2024.
Significant progress, with FY25 guidance reiterated for all operations
- FY25 volume and cost guidance maintained for all operations, with higher costs expected in the first half.
- Lost Time Injuries Frequency Rate of 0.17 and a rolling 12-month Total Reportable Injury Frequency Rate of 3.40.
- Significant progress during the quarter on plan to reduce operating costs and strengthen balance sheet:
- Completed the sale of a 49% interest in the Onslow Iron haul road to Morgan Stanley Infrastructure Partners for up to $1.3 billion. The upfront cash consideration of $1.1 billion was received.
- As previously announced, approximately $300 million of FY25 operational and capital expenditure reductions have been identified. This includes roster changes, sale of surplus fleet equipment and changes to mine plans to optimise for current market conditions.
- Since the start of FY25, there has been a reduction of 570 roles across head office and sites. These changes reflect the wind-down of Onslow Iron construction, roster changes in the Lithium division and a workforce reduction at head office.
Mining Services
- Quarterly production volumes were 68 million tonnes, up 11% quarter on quarter. FY25 mining services production volumes will be weighted to the second half, aligned with the ramp-up of Onslow Iron.
Iron Ore
- Onslow Iron progress:
- Remains on track to reach its nameplate 35Mtpa run rate from June 2025.
- Produced 1.9M wet metric tonnes and shipped 1.4M wmt over the quarter (100% basis).
- Mining is at steady state, with 15.6M wmt of total material moved and 3.5M wmt of ore mined.
- Since quarter-end and in line with the ramp-up schedule:
- The haul road has commenced full operational use by our road train fleet across the entire 150km route
- The third transhipper began operating at the Port of Ashburton, with the fourth vessel scheduled to arrive in Australia in early 2025
- Including Mining Services, Onslow Iron was operating cash flow positive in the month of October
- The project was on track to ship circa 880k wmt in the month of October, representing an annualised run rate of 10.6Mt.
- Total attributable iron ore shipments across all three hubs – Onslow Iron, Pilbara and Yilgarn – were 4.5M wmt.
- The average quarterly realised price across all hubs was US$82 per dry metric tonne, a 15% decrease qoq and representing an 82% realisation of the Platts 62% IODEX.
Lithium
- The Lithium division is focused on transitioning to lower-volume, higher-quality production to meet current market conditions.
- This transition is supported by detailed cost-out programs currently underway. Cost-reduction measures include roster changes, asset rationalisation, contract and overhead reviews, optimised regional synergies and capital deferral. These programs will continue throughout the second quarter.
- Total lithium production across all three sites was 157k dmt, with shipments of 178k dmt.
- The weighted average quarterly realised price achieved across all three sites was US$815/dmt SC6 equivalent (US$626/dmt mixed grade basis), a decrease of 32% qoq.
Energy
- Transaction entered into with Hancock on the Perth and Carnarvon basins for total consideration of up to $1.1 billion.
- Announced a maiden resource for the Lockyer gas project and the Erregulla oil project, both located on Exploration Permits 368 and 426.