Mineral Resources Achieves FY25 Guidance with $641/dmt Wodgina Cost and $1.1B Liquidity
Mineral Resources Limited has met its FY25 production and cost guidance across all segments, boosted by a cashflow-positive Onslow Iron joint venture and record low costs at Wodgina. The company also strengthened its board and initiated a governance review.
- FY25 volume and cost guidance achieved across iron ore, lithium, and mining services
- Onslow Iron JV reaches cashflow positive status, advancing towards 35Mtpa capacity
- Record low SC6 FOB cost of $641/dmt at Wodgina with recovery improvements planned
- Board renewal with new independent Chair and directors, governance framework under review
- Liquidity strong at over $1.1 billion, net debt to EBITDA ratio improving
Strong Operational Delivery Across Segments
Mineral Resources Limited (ASX, MIN) has delivered a solid finish to FY25, achieving volume and cost targets across its iron ore, lithium, and mining services operations. The company reported iron ore shipments at the upper end of guidance, with Onslow Iron joint venture shipments reaching 14 million wet metric tonnes (100% basis) and an annualised run-rate of 32.4Mtpa in June. Lithium production from Mt Marion and Wodgina met or exceeded guidance despite recent price volatility, with Wodgina recording a record low SC6 FOB cost of $641 per dry metric tonne in the quarter.
Mining services volumes hit a record 83 million tonnes in the quarter, driven by Onslow Iron ramp-up and external growth, although margins were temporarily impacted by contractor road train usage pending haul road upgrades.
Onslow Iron Progress and Infrastructure Upgrades
The Onslow Iron joint venture has transitioned to commercial production and is now cashflow positive, with the carry loan balance reducing to $766 million. The project is on track to reach its 35Mtpa nameplate capacity by the end of Q1 FY26, supported by the ongoing private haul road upgrade which is approximately 60% complete. This infrastructure enhancement is expected to alleviate current haulage constraints and reduce reliance on contractor road trains, improving operational efficiency.
The commissioning of a fifth transhipper at the Port of Ashburton has increased total transhipping capacity to 35Mtpa, further supporting the ramp-up.
Board Renewal and Governance Focus
In a strategic move to strengthen governance, Mineral Resources appointed Malcolm Bundey as independent Non-Executive Chair, effective 1 July 2025, alongside two additional independent directors post-quarter. The Board has engaged King & Wood Mallesons to conduct a governance framework review aimed at implementing best-in-class practices. This leadership refresh coincides with a balance sheet review as the company navigates capital expenditure, debt management, and ongoing operational investments.
Financial Position and Non-Cash Items
Liquidity remains robust at over $1.1 billion, including cash and undrawn credit facilities. Net debt is approximately $5.35 billion, with movements influenced by capital expenditure of $1.9 billion (within guidance), interest payments, foreign exchange gains on US dollar bonds, and working capital outflows. The company is undergoing impairment testing, anticipating non-cash impairments related primarily to lithium tenements and Resource Development Group assets following voluntary administration.
Exploration and Energy Developments
Exploration activities continue across iron ore and lithium projects, with drilling programs underway at Pilbara Hub and Mt Marion targeting resource extensions and low-strip opportunities. In energy, the Moriary-2 gas well was certified with a 2C contingent resource of 27 billion cubic feet, confirming substantial potential despite missing an upside price adjustment threshold. The Lockyer-6 certification is expected in Q1 FY26, and further testing is planned for the Bamberg-1 well.
Overall, Mineral Resources is advancing its diversified portfolio with operational discipline and strategic governance enhancements, positioning itself for growth in FY26.
Bottom Line?
With FY25 targets met and key infrastructure upgrades underway, Mineral Resources is poised for operational scaling and governance evolution in FY26.
Questions in the middle?
- How will lithium price volatility impact Mineral Resources’ earnings and capital allocation in FY26?
- What are the potential outcomes of the ongoing impairment testing, particularly regarding lithium assets and RDG holdings?
- How quickly will the Onslow Iron haul road upgrade translate into improved margins and reduced contractor reliance?
