Mineral Resources (ASX: MIN) has released its activities report for the quarter to 31 March 2023.
March Quarter key points:
- Safety performance for the quarter remained strong with no Lost Time Injuries. Total Reportable Injury Frequency Rate was 2.11.
- Mining Services production volumes were lower in Q3 at 52Mt, following completion of two external mining contracts. Equipment and people were moved to joint venture projects but delays in approvals impacted volumes. During the quarter, one new external crushing contract and two new mining contracts were secured, along with an extension to an existing haulage contract. As a result of the delays in approvals and delays associated with the award of new contracts, FY23 volume guidance has been reduced to 245-255 Mt from 270-280 Mt.
- Iron ore shipments were 4.5M wmt, up 10% qoq and in line with FY23 guidance of 17.2-18.8M wmt.
- Average realised iron ore price was US$109 per dry metric tonne (dmt), 12% higher qoq to represent an 87% realisation of the Platts 62% IODEX.
- Iron ore FY23 free on board (FOB) costs are expected be at the upper end of the guidance range of $65-75/t for Utah Point and $85-95/t for Yilgarn.
- A record total of 111k dmt (attributable) of spodumene concentrate (SC6 Eq 85k dmt) was shipped, up 15% qoq.
- A total of 7,666 tonnes (attributable) of lithium battery chemicals was converted, stable qoq, with 5,925 tonnes (attributable) sold, down 14% qoq.
- The average realised lithium battery chemicals revenue was US$56,996/t (exclusive of China VAT), down 14% qoq.
- The Mt Marion expansion progressed and remains in line with the initial budget of $120 million. Completion of the expansion is now anticipated to commence from mid-May.
- Mt Marion FY23 volumes are expected to be at the lower end of spodumene concentrate guidance of 160-180k dmt (SC6 equivalent) and lithium battery chemicals sold guidance of 19.0-21.3kt. This reflects the impact of a delay in the plant expansion and mine sequencing, resulting in the drawdown of contact ore stockpiles. Accordingly, Mt Marion FY23 spodumene FOB cost guidance has been revised to $1,200-$1,250/t (SC6 equivalent) (previously $850-900/t).
- Wodgina remains on track to achieve FY23 spodumene shipped guidance of 150-170k dmt (SC6 equivalent) and lithium battery chemicals production guidance of 11.5-12.5kt. Reflecting current marketing arrangements and market dynamics, FY23 lithium battery chemicals sold guidance is expected to be 5.0-6.0kt (previously 8.5-9.5kt).
- During the quarter, MinRes entered into binding agreements with Albemarle Corporation (NYSE: ALB) to restructure the MARBL Joint Venture and investment in lithium conversion assets in China. Subject to receipt of regulatory approvals, MinRes expects the Australian part of the MARBL JV restructure to complete in the June quarter. The transaction effective date of 1 April 2022 for the change in ownership interests remains.
- Subsequent to quarter’s end, the Lockyer-2 gas appraisal well was drilled. The primary target, Kingia Sandstone, had low levels of background gas and wireline data indicates that the reservoir is water saturated.
- MinRes extended the offer period under its off-market takeover bid of Norwest Energy NL (ASX: NWE) to 29 April 2023. As at 24 April, MinRes had voting power in Norwest of 88.08%.
