Chris Ellison’s Mineral Resources has posted a loss of more than $800 million and axed its interim dividend, as tottering commodity prices, torrential weather and uncertainty over its leadership weigh on the embattled Western Australian iron ore and lithium miner.
Reporting after the market closed on Tuesday, MinRes posted an $807 million loss for the final six months of 2024, down from a profit of $530 million a year ago. Analysts had expected a pre-tax loss of about $400 million.
Mineral Resources founder Chris Ellison. Trevor Collens
MinRes also cut its forecast for the amount of iron ore it would export this year, blaming damage to its haul road in WA’s Pilbara region and shipping delays caused by ex-Tropical Cyclone Sean.
The miner cut its 2025 full-year guidance of iron ore shipments by as much as one-quarter to between 8.8 million and 9.3 million tonnes.
“These weather events caused significant flooding that damaged parts of the Onslow Iron haul road,” said Ellison, who founded the miner and is facing a probe by the regulator into allegations of corporate misconduct.
We have decided to repair the damage with cement stabilisation and to resurface the haul road with asphalt, which will significantly reduce downtime and maintenance costs.” Haulage will continue on the road while repairs are carried out, MinRes said.
The road has been a lightning rod for criticism after five trucks crashed on the network since August. Triple-trailer road trains capable of carrying 330 tonnes of iron ore run along the 147-kilometre private haul road every few minutes, carrying their loads from Kens Bore mine to the port in Onslow.
The most recent accident occurred two days after the miner said that another crash was unlikely, and that “operator error” was involved in all the accidents. MinRes sold a 49 per cent of the road to a unit of Wall Street bank Morgan Stanley for $1.1 billion.
MinRes shares have fallen by two-thirds from their peak above $90 two years ago, and closed down 6 per cent at $30.50 on Tuesday, cutting its market capitalisation to $6 billion.
The share price slide came after New York-listed Albemarle, MinRes’ 50-50 joint venture partner in its Wodgina lithium project, last week released an independent technical report that valued the asset at $2.6 billion – well below previous estimates.
Ben Lyons, analyst at Jarden, said the figure was 30 per cent less than his previous estimate, and cited MinRes’ “relatively limited disclosure provided about their assets” for the lack of clarity on its value.
Revenues of $2.29 billion for the half were down from $2.5 billion a year ago, as decelerating sales growth for electric vehicle dented lithium prices and prompted MinRes to pare back its production of the key battery ingredient.
Weakness in the Chinese property sector has driven down demand for steel, which has had a knock-on impact on Australia’s miners of iron ore, a key steelmaking ingredient.
MinRes saw its cash pile dwindle by almost $200 million to $720 million, while its debt climbed above $5 billion, which the miner has attributed to the cost of building its $3 billion Onslow hub in WA’s Pilbara.
MinRes’ hefty debt burden comes despite the miner flogging off a raft of assets, including the $1.1 billion sale of its WA onshore gas operations to Gina Rinehart.
Underlying earnings before interest, tax, depreciation, amortisation and impairment more than halved to $302 million, which was attributed to dwindling commodity prices.
The ASX-listed miner has mothballed its Bald Hill lithium mine and slowed construction at its Mount Marion lithium project, axing hundreds of jobs in the process.
Ellison said the period had been challenging for MinRes, “but our company has a history of weathering storms and coming out stronger”, he added.
The heavily indebted miner will not propose an interim dividend - which Ellison said was “prudent” - after paying out 20 cents per share a year ago and $1.20 in the first half of 2023.
“I acknowledge investors’ focus on our balance sheet, which reflects a period of high construction spend at Onslow Iron,” said Ellison.
“Capital expenditure peaked in the first half and Onslow Iron is now generating positive cash flow, which will enable us to accelerate efforts to deleverage the balance sheet.”
The Perth-headquartered group remained tight-lipped on the Australian Securities and Investments Commission’s investigation into Ellison, who will front media on Wednesday for the first time since October when The Australian Financial Review revealed allegations of corporate failings and related party transactions.
These include an alleged offshore tax evasion scheme that enriched the blunt-speaking New Zealander and former executives, costing shareholders more than $7 million.
MinRes’ founder and managing director is due to leave the group before mid-2026 following a damaging board report that found the billionaire had “not acted with integrity”.
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