Mineral Resources Limited has upgraded its lithium production guidance and reported record iron ore shipments in Q2 FY26, alongside a significant reduction in net debt and a strategic joint venture with POSCO Holdings.
- Record iron ore shipments of 11.5 million wet metric tonnes in Q2 FY26
- Upgraded FY26 lithium volume guidance for Wodgina and Mt Marion
- Net debt reduced to approximately $4.9 billion from $5.4 billion
- POSCO Holdings to acquire 30% stake in lithium operations for US$765 million
- Safety metrics improved with zero lost time injuries reported
Strong Operational Momentum
Mineral Resources Limited (ASX, MIN) delivered a robust performance in the second quarter of fiscal year 2026, highlighted by record iron ore shipments and an upgraded lithium production outlook. The company shipped a total of 11.5 million wet metric tonnes of iron ore across its Onslow Iron and Pilbara Hub operations, marking a new quarterly high. This achievement underscores the successful ramp-up of Onslow Iron to nameplate capacity and the strategic development of the Pilbara Hub, including the commencement of the Lamb Creek project.
Onslow Iron’s FOB cost improved to $50 per wet metric tonne, tracking at the lower end of full-year guidance, reflecting operational efficiencies as the mine transitions from construction to steady-state production. Meanwhile, the Pilbara Hub maintained steady output with costs expected to decline further as lower-cost Lamb Creek ore replaces Wonmunna volumes later in the year.
Lithium Volume Guidance Upgraded Amid Price Strength
The lithium segment was a standout, with attributable spodumene production reaching 138,000 dry metric tonnes of SC6 concentrate and sales slightly exceeding production at 143,000 tonnes. The average realised lithium price surged 29% quarter-on-quarter to US$1,094 per dry metric tonne CIF SC6, driven by strong market demand.
In response to this favourable pricing environment and operational performance, Mineral Resources upgraded its FY26 lithium volume guidance to 260,000–280,000 tonnes for Wodgina and 190,000–210,000 tonnes for Mt Marion, up from previous estimates. Cost guidance remains steady, with expectations of some cost increases in the second half due to ore grade variations but overall maintaining within forecast ranges.
Strategic Partnership and Financial Strengthening
In a significant corporate development, Mineral Resources executed a binding agreement with POSCO Holdings Inc for the sale of a 30% stake in its lithium operations, specifically in the Wodgina and Mt Marion mines. The transaction, valued at approximately US$765 million upfront, is subject to regulatory approvals and expected to complete in the first half of calendar 2026. This partnership not only brings a strong strategic investor into the lithium business but also bolsters the company’s liquidity position.
Financially, Mineral Resources has demonstrated rapid deleveraging, with net debt reduced to around $4.9 billion from $5.4 billion in the previous quarter. Liquidity improved to over $1.4 billion, supported by a successful US$700 million bond refinancing at a lower interest rate and continued cash generation from operations. Capital expenditure remains on track with $200 million spent in the quarter, primarily weighted to the first half of the fiscal year.
Safety and Exploration Progress
Safety metrics continue to improve, with the Lost Time Injury Frequency Rate (LTIFR) at zero for the quarter and a 13% improvement in the Total Reportable Injury Frequency Rate (TRIFR). This reflects the company’s focus on maintaining a safe working environment as operations mature.
Exploration and resource development activities progressed across key assets, including drilling programs at Onslow Iron, Pilbara Hub, Wodgina, and Mt Marion. These efforts aim to support future production growth and extend mine life, with particular attention on resource definition and metallurgical studies.
Looking Ahead
Mineral Resources is also evaluating the potential restart of its Bald Hill lithium operation, currently on care and maintenance, in light of prevailing market conditions. Meanwhile, updates to the pre-feasibility study for underground development at Mt Marion are anticipated by Q3 FY26, which could further enhance the company’s lithium portfolio.
Bottom Line?
With upgraded lithium guidance, record iron ore shipments, and a strategic POSCO partnership, Mineral Resources is poised for continued growth while managing debt and operational risks.
Questions in the middle?
- How will the POSCO joint venture impact Mineral Resources’ long-term lithium strategy and earnings?
- What are the implications of rising lithium prices on cost structures and future capital expenditure?
- How will the transition to Lamb Creek ore affect Pilbara Hub’s cost profile and production volumes in the second half of FY26?