Mineral Resources shares rise 13 per cent despite $250m quarterly cash burn, reveals 1740 roles chopped

Shareholders in Mineral Resources have breathed a sigh of relief despite the company losing $250 million of cash in the March quarter, net debt swelling to $5.4 billion and 1740 jobs being cut so far this financial year. MinRes had $450m left in the bank by the start of April but has ruled out asking investors to reach into their wallets for a capital raise. Taking a dilutive raising off the table pushed MinRes shares up 13.2 per cent to $20.57. The Chris Ellison-led company also said it is undertaking an assessment of its current board skills as it looks to replace three directors who sensationally walked away from the lithium and iron ore miner within the space of a week. MinRes on Tuesday revealed net debt rose about $300m to $5.4b as weak lithium prices and operational issues at its flagship Onslow Iron project make paying down the large sum of liabilities a hard task. The company said it has an $800m line of untapped credit that can be used if necessary. “Given the company’s strong liquidity and a number of other levers at MinRes’ disposal, an equity raise is not under consideration,” MinRes stated in an ASX announcement. Chief financial officer Mark Wilson fleshed out the “other levers” on an analyst call. He floated MinRes’ 51 per cent stake in the troubled Onslow haul road as “an example” of what could be sold to pay down debts. “I’ve got precedent transactions for the road at over a billion (dollars) for half of it, that I know I could transact on if I needed to again.” Mr Wilson said. MinRes sold a 49 per cent stake in the 147-km dual-lane road last year for $1.3b to Morgan Stanley Infrastructure Partners. “We’ve also talked previously about opportunity to do something with the carry loan (for Onslow Iron), which is sitting at $800 million,” he said. The carry loan is the money MinRes fronted to construct Onslow Iron, a project which it owns 60.3 per cent of, and is now owed to MinRes by the other three mine joint venture partners. Not undertaking an equity raise will preserve the 11.5 per cent shareholding of Mr Ellison, who is supposedly stepping down as MinRes boss by the middle of next year. But the company’s transition to a post-Ellison world was thrown into disarray over the past fortnight after three MinRes directors — Denise McComish, Jacqueline McGill and Susan Corlett — resigned. The trio comprised the company’s new ethics and governance committee, which was to oversee an overhaul of MinRes’ corporate governance in the wake of damning scandals involving Mr Ellison. Both MinRes and Mr Ellison have been under intense pressure since revelations the founder was involved in historic tax evasion on co-owned offshore companies and used MinRes for personal benefit via a series of related-party transactions. The abrupt exits this month leaves MinRes with six directors — outgoing chair James McClements, Mr Ellison, former cricketer Justin Langer, Colleen Hayward, Xi Xi and Zimi Meka. The board is also searching for a new chairperson to replace Mr McClements, with an announcement due in the June quarter. “The nominations committee is conducting an assessment of board skills,” MinRes said in a quarterly update to investors on Tuesday. “The new chair will be involved in any recruitment process for new directors. Replacement members on board committees, including the ethics and governance committee, will be selected in due course.” While it hunts for new board members, MinRes said so far this financial year nearly 2000 workers have been cut loose. “Cost reduction initiatives continue throughout the business. Since the start of FY25, there has been a reduction of approximately 1740 roles across head office and sites,” the company stated. MinRes’ lithium sites, depleted Koolyanobbing iron ore operation in the Goldfields, and its Osborne Park headquarters have borne the brunt of the job cuts. The only project the company has been ramping up is Onslow Iron, but the key private haul road that connects mine to port has experienced a spate of truck rollovers and rain damage from cyclonic weather. MinRes shipped 3.6 million tonnes of Onslow iron ore during the March quarter, in line with The West Australian’s predictions. Onslow production guidance for the 2025 financial year was trimmed down from a band between 8.8mt and 9.3mt to 8.5mt and 8.7mt.