MinRes keeps FY27 targets after record quarter across mining and lithium

Record Volumes Keep FY27 Targets Intact

Mineral Resources Limited (ASX:MIN) has held its FY27 guidance across all divisions after a busy opening quarter in which Mining Services production reached a record 103Mt, up 10% from the previous quarter. The operating performance gives MinRes a solid start against its full-year production target of 370Mt to 390Mt, although the quarter also exposed the commodity-price pressure running through its lithium business.

Onslow Iron shipped 9.2Mt on a 100% basis, including a record September export month of 3.49Mt. MinRes’s attributable shipments were 5.0Mt, while the operation’s FOB cost came in at A$53 per wet metric tonne, below its FY27 guidance range of A$54 to A$58. The result builds on the project’s ramp-up, which featured in the company’s FY26 volume and debt update, and leaves the operation targeting 20.0Mt to 21.7Mt for the year.

Iron Ore Expansion Meets Lithium Price Pressure

Pilbara Hub production rose 55% quarter on quarter to 3.2Mt, with 2.9Mt shipped. Lamb Creek moved from commissioning into full operations during the quarter, less than a year after construction began, and Pilbara Hub’s FOB cost of A$75/wmt sat within its A$74 to A$79 guidance range.

Lithium volumes were similarly strong: attributable sales reached a record 170kt of SC6, up 8%, while production rose 17% to 166kt. But the price environment was considerably less helpful. The weighted average realised price fell 23% quarter on quarter to US$1,873/dmt CIF SC6, reflecting lower spot prices in September. Wodgina’s A$674/dmt SC6 cost remained within guidance, but Mt Marion’s A$1,029/dmt was above its stated range and is expected to sit at the upper end for FY27. Bald Hill’s A$1,498/dmt cost reflected its ramp-up quarter, with the company still expecting full-year costs to align with guidance.

Mt Marion is entering a deliberately transitional phase, with stripping rising as the northern pits open and ore mined falling 45% quarter on quarter. Construction of its flotation plant progressed, while underground development began under Macmahon Holdings (ASX:MAH). At Bald Hill, the dense media separation plant was commissioned and is ramping towards its design capacity of 140ktpa SC6. These projects offer operating upside, but their near-term cost performance remains tied to recoveries, feed quality and ramp-up execution.

Debt Falls as Leadership and Regulatory Questions Shift

MinRes reduced net debt by approximately A$200 million to A$4.1 billion during the quarter, despite A$310 million of capital expenditure and payment of its A$160 million FY26 dividend. Liquidity increased to A$2.5 billion, comprising A$1.7 billion of cash and an undrawn A$800 million revolving facility. Fitch upgraded the company to BB with a stable outlook, citing capital allocation discipline, deleveraging and expanding operations.

The balance sheet improvement comes alongside a change at the top of the lithium division. Chief Executive Lithium Joshua Thurlow has resigned to pursue an overseas opportunity and will remain until December, with Chief Executive Iron Ore and Energy Darren Hardy taking on the additional responsibility. MinRes also said the POSCO Holdings lithium transaction, which was previously described as a US$765 million deal for a 30% stake in the lithium operations, remains on track for completion in the first half of FY27, subject to conditions precedent; the POSCO lithium transaction was reported earlier in the company’s project and balance-sheet trajectory.

One overhang has now been removed: ASIC concluded its investigation in September without taking enforcement action. Fuel costs are a more immediate watchpoint. Diesel averaged close to the A$1.25 per litre assumption used in guidance during the quarter, but rose to about A$1.60 in September. MinRes estimates that increase would add roughly A$1/wmt to Onslow Iron costs, A$2/wmt at Pilbara Hub and A$20/dmt SC6 to lithium costs, while still expecting FY27 FOB costs to remain within guidance at current prices.