Mineral Resources Powers Onslow Iron Ramp-Up, Secures $1.5B Liquidity Boost

Steady Operational Momentum at Onslow Iron

Mineral Resources Limited (ASX: MIN) has delivered a robust quarterly performance for Q2 FY25, underscoring its confidence in meeting full-year guidance across its diversified portfolio. The Onslow Iron project remains the centerpiece of this progress, with mining activities achieving a steady state and production reaching an annualised rate of 17.6 million wet metric tonnes (wmt) during the quarter. Notably, all components of Onslow Iron have been cash flow positive since November 2024, signaling a successful ramp-up phase.

Operational enhancements continue apace, including the commissioning of the third transhipper at the Port of Ashburton and the imminent arrival of a fourth vessel in February 2025. The haul road, a critical logistics asset, has been fully operational throughout the quarter, facilitating efficient transport and supporting the company's ambitious target of a 35 Mtpa run rate.

Financial Position Bolstered by Strategic Transactions

Mineral Resources' liquidity position remains strong, with $1.5 billion available as of December 31, 2024. This comprises over $700 million in cash and a fully undrawn $800 million revolving credit facility, providing ample flexibility for ongoing capital expenditure and operational needs. Net debt stands at $5.1 billion, influenced by significant capital investments, including $1.4 billion in 1H FY25 capex largely directed towards Onslow Iron's completion.

Strategic asset sales have further strengthened the balance sheet. The company received $1.1 billion upfront from the sale of a 49% interest in the Onslow Iron haul road and an initial $780 million payment from the sale of exploration permits in the Perth and Carnarvon Basins to Hancock Prospecting. These transactions not only improve liquidity but also reflect Mineral Resources' focus on optimising its portfolio and capital allocation.

Mixed Performance Across Hubs and Lithium Division

While Onslow Iron advances, the Yilgarn Hub has transitioned to care and maintenance, with production and shipments declining as expected. The company is actively exploring a potential sale of these assets, having redeployed over 780 personnel internally. Meanwhile, the Pilbara Hub showed a 6% quarter-on-quarter production increase, maintaining cost guidance and supporting overall iron ore output.

In lithium, Mineral Resources continues to prioritise high-quality, lower-volume production aligned with market conditions. The Bald Hill operation was placed into care and maintenance in November due to cost pressures, with measures in place to enable a swift restart. Cost reduction initiatives at Mt Marion and Wodgina are underway, aiming to improve operational efficiency and maintain FY25 guidance despite a challenging pricing environment.

Exploration and Development Activities Sustain Growth Pipeline

Exploration efforts remain active, particularly at Onslow Iron's Ken's Bore deposit and the Yilgarn Hub, where drilling programs target resource expansion and conversion. In lithium, extensive drilling at the Pilbara Hub supports resource definition and mine planning, underpinning future production potential. The energy division's transaction with Hancock includes joint ventures and infrastructure sales, with further payments contingent on resource milestones, reflecting a strategic approach to asset monetisation and risk sharing.