MinRes Faces $632M Impairments Amid Board Renewal and Debt Rise

FY25 Financial Performance

Mineral Resources Limited (MinRes) closed FY25 with a revenue of $4.5 billion and an underlying EBITDA of $901 million, both down 15% compared to the previous year. Despite the overall decline, the company recorded a standout performance in its Mining Services segment, which posted a 34% increase in EBITDA to $737 million, largely propelled by the successful ramp-up of the Onslow Iron project.

The company reported an underlying net loss after tax of $112 million, primarily due to significant post-tax impairment charges totaling $632 million. These impairments relate mainly to lithium assets, including the transition of Bald Hill into care and maintenance, and the voluntary administration of the Resource Development Group (RDG).

Onslow Iron – A Growth Engine

Onslow Iron has emerged as a cornerstone of MinRes’ strategic pivot towards long-life, low-cost iron ore assets. The project achieved its 35 million tonnes per annum (Mtpa) nameplate capacity early in FY26, marking a critical milestone. This ramp-up has not only boosted Mining Services volumes but also underpinned a transition to a lower cost profile, with a MineCo breakeven cost estimated at US$57 per tonne, positioning the asset to withstand commodity price cycles.

The company also unlocked $1.1 billion through the sale of a 49% stake in the Onslow Iron haul road to Morgan Stanley Infrastructure Partners, strengthening the balance sheet and providing capital for further growth initiatives.

Lithium Challenges and Strategic Adjustments

The lithium segment faced a challenging market environment with a 94% drop in underlying EBITDA to $23 million. MinRes reported impairments on lithium tenements and a write-down of low-grade stockpiles at Mt Marion. The Bald Hill operation was placed into care and maintenance during the year, reflecting the company’s cautious stance amid subdued lithium prices.

However, operational improvements at Mt Marion and Wodgina are underway, focusing on cost reduction and recovery enhancements to better position these assets for a market recovery.

Governance and Board Renewal

FY25 saw significant board renewal with the appointment of Malcolm Bundey as Chair and new Non-Executive Directors Lawrie Tremaine and Ross Carroll. This refreshed leadership team is driving a strengthened governance framework, including enhanced oversight of related party transactions and succession planning. The company is also working with external advisors to review its governance policies, aiming to support sustainable long-term growth.

Outlook and Capital Management

Looking ahead, MinRes has set FY26 guidance for mining services production volumes between 305 and 325 million tonnes, with iron ore shipments from Onslow Iron expected to range from 30 to 33 million tonnes. Lithium production guidance anticipates a focus on operational efficiencies and cost control.

Capital expenditure for FY26 is forecast at approximately $1.14 billion, emphasizing sustaining and growth projects, including further development at Onslow Iron and Pilbara Hub. The company aims to reduce net debt from $5.3 billion towards a long-term target of less than 2.0 times underlying EBITDA, supported by strong free cash flow generation and disciplined capital allocation.