Mineral Resources Limited (MIN) Earnings Call Transcript
July 29, 2026
Earnings Call Speaker Segments
Thank you for standing by and welcome to Mineral Resources Call covering today's release of its June 2026 Exploration and Mining Activity Report. Your speakers today are Mark Wilson, Chief Financial Officer; and Chris Chong, General Manager, Investor Relations. A little bit of admin before we kick off. [Operator Instructions] This call is being recorded with a written transcript being uploaded to the MinRes website later today. I will now hand over to the MinRes team.
Thanks, Michelle. Good day, everybody, and thank you for joining us. My name is Mark Wilson, I'm the CFO of Mineral Resources. Joining me in the room today are Malcolm Bundey, Independent Nonexecutive Chair; and Chris Chong, General Manager, Investor Relations. I'll start this morning with a few opening remarks on the quarter and on the full year before we move to questions. The June quarter closed FY '26 on a record note. We had our strongest quarterly mining services volumes on record. Onslow Iron averaged a run rate of 38 million tonnes per annum, and we had record quarterly attributable spodumene sales of 158,000 tonnes on an SC6 equivalent basis. For the year as a whole, FY '26, we exceeded volume guidance at Onslow Iron and across both lithium operations. We delivered mining services volumes above the top end of upgraded guidance, and we maintained cost discipline throughout. That's a strong result by any measure, and it reflects more than just 1 quarter of delivery. It demonstrates the quality of the business we have built, the benefits of deliberate investment decisions made over several years and the performance of assets that are now maturing towards their potential. I do want to acknowledge the significant efforts of our teams across every part of the business to deliver that outcome. To put FY '26 in context, across our 3 operating pillars, we delivered records in mining services volumes, lithium sales and iron ore shipments. We did that while significantly reducing our cost of debt and strengthening our liquidity position by $1.3 billion. This is a business that is executing well, generating stronger cash flow and entering the new year from a significantly stronger position than a year ago. Looking ahead, we enter FY '27 with positive momentum, a materially improved balance sheet and a clear set of priorities. Starting with the balance sheet, which continues to rapidly strengthen. Liquidity improved to $2.4 billion at 30 June, up from $1.8 million a quarter earlier with our cash position up $600 million. Net debt reduced approximately $200 million to below $4.3 billion, continuing our positive deleveraging trend. The distinction between the $600 million improvement in our cash and the $200 million reduction in net debt reflects the refinancing of our iron ore prepayment, which was previously classified as a nondebt liability. Regarding the refinancing in April, we issued USD 1.3 billion of new senior unsecured notes at our lowest ever rates of 6% and 6.25%. This transaction reduced our weighted average cost of debt from 8.4% to 7.4%, extended our weighted average tenor from 3.1 years to 5 years and saved us approximately $48 million per year in finance costs. On completion of the POSCO transaction, the residual USD 750 million of bonds due October '28 are expected to be redeemed reducing our weighted average cost of debt further to 6.9% and saving approximately a further $100 million in interest annually. The Onslow Iron carry loan reduced by $124 million over the quarter to $335 million. And as Onslow Iron continues to generate strong cash flows, we expect this balance to continue to reduce materially through FY '27. Additionally, we had a working capital inflow in the quarter of $250 million, which is primarily related to an increase in payables as a result of timing and also increased activity. And this is expected to largely unwind in this new quarter. FY '26 capital expenditure came in at $1.1 billion, net of asset financing of $110 million and in line with our guidance. We will provide guidance for FY '27 CapEx at our full year results later in August. Our capital allocation remains disciplined in line with our updated capital allocation policy with FY '27 growth CapEx focused on brownfields opportunities with assets we already own and operate. That growth CapEx in FY '27 will include brownfield investment at Marion and Onslow Iron to support productivity, capacity and long-term operational capability. Turning to Mining Services, the growth engine of mining of MinRes. The division had an outstanding quarter. Quarterly production volumes were a record 94 million tonnes, driven by an increase -- particularly increased volumes at Onslow Iron and increased activity at Mt Marion. For the full year, FY '26 production volumes were a record 341 million tonnes, up 22% year-on-year and above the top end of our upgraded guidance range. In iron ore, Onslow Iron produced 8.8 million tonnes and shipped a record 9.6 million tonnes in the quarter on a 100% basis. That's an extremely strong finish to the year that is equivalent to achieving a shipped 38 million tonne per annum run rate for the quarter. For FY '26, attributable shipments of 19.7 million tonnes exceeded the top end of our upgraded guidance. Total FY '26 shipments were 31.1 million tonnes on a 100% basis. Realizations for Onslow Iron in the quarter were at 82%, and this remains consistent with broader market conditions. FOB cost for the quarter was $53 per tonne bringing full year FOB cost to $52 per tonne below the lower end of FY '26 guidance. This result confirms Onslow Iron as a large-scale operation now performing consistently and generating cash at scale. Other highlights worth noting, including the arrival of the sixth transhipper in May with the seventh transhipper now due to arrive in early August. With the seventh transhipper, our Marine logistics system will have greater flexibility and redundancy as we move into FY '27. Post quarter end, unplanned maintenance works are being conducted at the port and loadout. This is expected to have a minimal impact on Q1 volumes as other planned maintenance works scheduled for August have been brought forward. In the Pilbara Hub, shipments increased to 2.7 million tonnes, of which 34% was lump with the ramp-up of Lamb Creek progressing well. Realizations in the quarter was 83%, reflecting the widening of discounts, but partly offset by sustained lump premiums. FY '26 shipments of 9.9 million tonnes achieved the upper end of guidance and full year FOB cost came in at $79 a tonne in line with guidance. Lithium. Our Lithium division closed out the year strongly on volumes. Sales from Wodgina and Mt Marion totaled a record 158,000 tonnes SC6, as I said earlier, and achieved an average realized price of USD 2,425 per tonne SC6 basis. At Wodgina, Sales for the year were 317,000 tonnes, SC6, outperforming our upgraded guidance. This was driven by increased utilization of the 3 processing trains. FOB costs for FY '26 at Wodgina was $738 per tonne SC6 achieving the lower end of guidance. At Marion, sales for the year totaled 242,000 tonnes, exceeding the top end of upgraded guidance. The FOB cost of $847 a tonne for the year on an SC6 basis was within guidance. As we've said previously, FID was taken in May with our joint venture partner, Ganfeng on an investment in the flotation plant and a recommencement of the underground development. And earlier this month, Macmahon was appointed as our underground mining contract partner. Bald Hill operations restarted in May. This is a meaningful step in our ability to flex according to market conditions. Subsequent to the quarter, we shipped our initial parcel of spodumene concentrate and ramp up to full capacity of 140,000 tonnes SC6 per annum remains on track for Q2, this new financial year. Across the lithium portfolio, the key point is that the work undertaken through the cycle is now translating into higher volumes, improved operating flexibility and a stronger platform for future returns. Turning to safety. On safety, as flagged in the previous quarter, the company has completed a comprehensive review of its injury and illness classification procedure. Following this review, the procedure has been revised to align with global industry standards. This does not reflect the change in underlying safety performance but is a deliberate decision to hold ourselves to a higher reporting standard as our business matures. In closing, FY '26 was a year of significant progress operationally, financially and strategically. We remain fully focused on delivery. We achieved or exceeded guidance across every segment. We strengthened liquidity to $2.4 billion, and net debt has reduced to $4.3 billion. Our cost of debt is materially lower, our maturity profile is extended, and our debt reduction trajectory is clear. We enter FY '27 with well-established earnings drivers in Onslow Iron, lithium and mining services, strong liquidity and a pipeline of low-risk, high-return brownfields investments and mining services opportunities that we are progressing with discipline. With that, I'll now hand back to the facilitator to arrange questions.
[Operator Instructions] Our first question comes from Kate McCutcheon from Bank of America.
Mark, let me try that again. Well done on strong finish. So just at Onslow, we've got the TMM which has stepped up 1 million tons quarter-on-quarter and ore is down. Is that how we should think about the strip ratio into next year? Does the mine become this constraint per se into next year?
Okay. Thanks for the question. This is just one of the features of the mine planning at Onslow. We're moving into some new areas up at Upper Cane and bringing some material there. So we're seeing a little bit of a change in this strip. But yes, we'll have more guidance, obviously, in August when we give you a better feel for '27.
Okay. And I have an accounting question for you. So the POSCO sell-down is still expected to complete this CY. When that's done, do you expect to report 50% of EBITDA from those 2 mines through EBITDA? Or will it be the 35%? And then just remind me the early call fee on the bonds you intend to repay early.
So in terms of the accounting for POSCO, we'll still control the assets, so we'll still deal with them the same way, but we'll be shifting our focus in terms of the way we communicate with the market to be more focused on an attributable basis so that people can tie it back to cash and cash in our bank more easily. So you'll see that change come through reporting in August. In terms of the October '28 steps down to a couple of percent to pay off. So it steps down materially every 6 months, it'll be a couple of percent.
Our next question comes from Paul Young from Goldman Sachs.
Just on that increase in mining services volumes, which are really strong in 4Q. You're putting that down to waste stripping at Mt Marion and then Onslow volumes. Was there anything to call out there on external -- increase in external volumes at all in the quarter?
Paul, we had a great quarter across all aspects of mining services, including the external operations. The performance here on each of those contracts for our clients was at or above where we expected it to be. The sizable volumes are across Onslow and Marion.
Okay. And then, Mark, on realized pricing for the quarter. I don't want to get caught up in too much in quarter-by-quarter, they probably beat a little bit then based on what we're seeing within the market. But just a more broader question around getting caught up in the CMIG negotiations and maybe getting dragged along by some others that are actually negotiating at the moment. I know you've got Baowu there as a partner, but ultimately, your grades probably will get mark-to-market into some of the other low-grade producers and their negotiations. Anything you could share around observations around how this might impact your discounts going forward?
You're right that we have a great relationship with Baowu. We've got a great relationship into China. Our volumes that we sell, our own volumes that we sell into China represent a very small portion of Australian iron ore going into China. So we don't have any direct engagement or connection with CMIG. Obviously, to the extent that there are conversations happening with other producers that affect the price and we do get pulled along by those. But generally speaking, the point that I'd like you to remember is that Onslow is a product that has been in the market for a while now. It's very well received and the mills want to take it. So we've got great demand for it. We are going to see the discounts that reflect the market, they tend to apply to our product.
The next question is from Rahul Anand from Morgan Stanley.
Look, Mark, I wanted to check firstly on Onslow, that's the first one, very strong run rates to finish the year. Obviously, you clocked nearly 40 million tonnes per annum there. You don't really have a 6 transhipper operating at the moment. it arrived in May. You've been -- you also had a sweeping campaign, I think, in June. And then you've obviously got the seventh transhipper coming in, in August. I mean, I guess the simple question is, is there a sizable upside to that 40 million tonne target? And what have you done differently that has gotten to basically close to the 40 million tonnes per annum without the 2 transshippers as we sit today? I'll come back with a second.
Rahul, thanks for the question. Just to remind you, of course, that we see a fair bit of seasonality in the shipments over the course of the year at Onslow. So the quarter that we've just gone through and the quarter we're in now are the quietest months and we need to be running up at or above 38 million tonnes if we are to achieve the opportunity that, that sixth transshipper represents. We've talked previously about the sixth transshipper helping us get towards 38 million tonnes. That's an average for the year. So we've touched on an average of 38 million tonne for the quarter and that we did have the sixth there for part of the quarter. The seventh transhipper gives us redundancy. But as we've said previously, it doesn't really give us significant extra capacity.
Got it. Okay. And look, the next one was around costs. Obviously, quite a strong performance quarter on the cost side, but the one -- and a lot of them are driven by volume. But if I look at the Pilbara Hub as well, in terms of production, it was a bit below, but still your cost performance was quite good for the quarter. I just wanted to understand what's driving that? Is it mainly the royalty going into land free? Or like is that basically a royalty delta? Or what's leading to the strong cost performance of that asset?
Yes. So in terms of the production at Central Pilbara, we saw obviously the transition out of Wonmunna into Lamb Creek as Lamb Creek came on size on board. The -- so that sort of explains the production. We're in that transition phase. In terms of the royalties, they sit outside fall. So it's more to do with the scale and the operation of the extra tonnes that we got through the quarter that we are above and beyond what we got thought we were going to do when we gave some guidance 3 months ago.
The next question is from Mitch Ryan from Jefferies.
Mark, just on Onslow just trying to -- you've said, obviously, this quarter is 1 of the ones where you have to operate quite strongly, but then you've called out maintenance work ongoing at port. Can you just help quantify the risks around that and/or just explain what's occurred there?
Yes, sure. As you would know, we have maintenance works scheduled through the year. Obviously, we try to sequence it as best we can with the weather. But you're talking about moving lots and lots of people in to do the work and lots of gear needed so you have to plan a fairway in advance. The work that I called out that's happening at the moment is unplanned. And so what it's meant is that we've had to resequence the works for the quarter. So we did have some planned maintenance works in August. We've brought those forward effectively to combine with the unplanned stuff that we're doing at the moment. So we're not expecting it to have any real impact this quarter or this half.
And my second question just relates to Mt Marion. Specifically, the integration of ore sorting. Can you just give us a bit of color? Will that be a permanent placement? Or is that mobile equipment? And how will it interact with the operation of the new float plant?
In terms of the ore sorting, I think we flagged previously that we're moving into a phase where we're going to be more heavily reliant on contact ore at Marion. That's just through the transition, the mine development as we head towards bringing those underground tonnes in. So we see more of a need for the -- sorry, for the ore sorting this year through that transition phase. Once we get into that new feed source from underground, I think it's going to be less but that's something we'll continue to monitor.
The next question comes from Lachlan Shaw from UBS.
Yes. The first question would just be on mining services. So I just wanted to understand obviously, a pretty strong June quarter, great finish for the year overall. How are you seeing kind of the books ahead for external activity next sort of 6 to 12 months in terms of potential new interest coming through but also current contracts and being potentially renewing? And then I'll come back with my second question.
Lachlan, really not a lot different to what I said 3 months ago. The performance of the business in Mining Services has been exceptionally strong. We've got a lot of interest in terms of what we're doing. I've said previously that Onslow has been a great demonstration of capability. And you can assume that, that's led to a whole range of opportunities and conversations. I think I've also foreshadowed that some of these conversations tend to take a while given the nature of the opportunities that we're talking about. But yes, we're seeing strong interest. We've got a strong forward pipeline and we'll be able to give more flavor to that when we talk in about a month's time.
Right. And then maybe just maybe stepping out a little wider lens with mining services. So you've spoken about potentially targeting other commodities in the past. So copper and maybe I'll just ask the question, how do you see gold? I suppose both copper and gold. How do you see those sort of opportunities sitting in your sweet spot and your core capabilities?
In terms of gold, I mean, we've been crushing gold sites for decades in terms of float experience and so on. We've got deep capability off the back, not just of lithium, but also in-house capability that we have with design engineering in that space with some very strong copper experience. So we had a whole range of options available to us. One of the things we haven't really spoken about much in the last few months is the strategy work that the Board and management did a few months ago. And you'll see some of that come through in the next month when we release our annual report and give updated guidance or give guidance to '27. So we'll talk about those topics a little bit more in about a month's time.
[Operator Instructions] The next question is from Ben Lyons from Jarden Securities Limited.
Just maybe drawing about on Lachie's last question there about the opportunities in the mining services business and triangulating back to your closing comments in the intro that you're looking at pursuing some of those opportunities with discipline. Now that the business is on a much more stable footing and you've got greater confidence, I guess, in the degearing trajectory, just checking on the appetite for offshore contracts.
Ben, yes, look, I think Chris Ellison was clear through a lot of FY '26 that we were very focused on delivery. And that's been the mantra inside the business, been very determined to deliver the tonnes and the outcome that we've reported today. In terms of the commentary around with discipline, as I said, we'll talk a little bit more about strategy next month and future opportunities. I think we've talked about an interest in exploring new commodities. We've also raised the prospect of exploring offshore new opportunities. But I think the key message there is that we would only do this with discipline. And sitting over the top of all of this, as we've talked about before, is the capital allocation framework that was put in place with the Board about 9 months ago now or maybe 10 months. And that's been a key driver in the way that we think about allocation of capital.
And then just...
Sorry, I was just going to say, you'll see over the last few months where we focused on the announcements of capital allocation. It's been brownfields with Marion, for example. So that all needs to feed into the way that we think about next year and beyond.
Yes. Got it. I'm sorry to interrupt. And then just maybe secondly, on the POSCO sell-down, the transaction does seem to be dragging on a little bit. Maybe you can update us on the progress with the various regulators that POSCO is dealing with and just give your view about the most likely effective date for the transaction, which I think from memory will align with the date that the transaction actually closes.
Yes. Thanks. We still expect the transaction to complete this half. There's still some regulatory approvals required. There's still got the documents that need to be finalized. But as I said, we still expect it to close this half.
The next question is a written question from Michael Orphanides from Palatine Capital. Michael said a color on the lithium market and the recent weakness. What is MRL seeing from a demand side? Do you think Bald Hill restart was premature?
Thanks for the question. The answer is no. I certainly don't think the Bald Hill restart was premature. And if you were watching us closely, you would have seen that we spent a period of time before we made that call. We previously flagged, we were looking for 1,500, and we wanted to make sure that, that market was going to be there, not just a blip. We were also careful given the uncertainty around diesel at the time. So we took our time with that decision in terms of how we see the market today, we continue to see consistent demand for our lithium and spodumene, particularly in China. I'd refer you and the market back to the release by CATL late last week and the messaging they offered around demand growth in the market, which is significant. That's what we're seeing. So I don't want to get into speculating as to what's happening with the prices. Underpinning all of this is continued growth in demand. That's what's key for us, and that's what gives us the confidence around Bald Hill.
The next question is another written question from Ken Wan from DKAM. Ken said, how should we think about the cost outlook? Costs were managed very well in the June quarter. Should we expect elevated cost pressures, whether energy-related or labor-related income in FY '27?
Ken, the answer is that MinRes has had a pretty strong record over the years of managing its costs very well. And particularly with the Mining Services business, to the extent that we have any sort of cost escalation pressures, they typically get passed through to the client under the rise and fall provisions of the contracts that we have in place. So we have a fair bit of sheltering from that cost pressure. More broadly across the commodities portfolio, we'll be giving guidance on costs for FY '27 when we talk to the market in about a month's time.
The next question is from Paul Young from Goldman Sachs.
Just a follow-up on the cash movements and accounting. Just to confirm, as far as the working cap movements, that's -- when you talk about payables inflow, you're talking about an increase in payables, i.e., work that you have to pay for. So you have seen an increase in payables on your balance sheet?
Yes, that's correct, Paul. And that comes from a number of different things. It's increased royalty obligations because of the increased revenue in the quarter. It's timing in terms of payroll. It's increased amounts to Morgan Stanley, infrastructure partners. So it comes from -- it's not one particular large number, but it comes from a number of different sources. I guess the underlying message though is that this is a business that over the years has delivered around 100% cash conversion to operating cash flow, and we expect that to continue into the future.
Yes. Understood. And then another sort of minor question is around the camp and also the $120 million, which will come through in FY '27. That's on 100% mining services. I presume there's going to be, I guess, some earnings some charge to your JV partners for that project?
No. There won't be. Well, we'll have some operating revenue there in terms of the accommodation and so on. But no material incremental revenue, it's basically being deferred. It's a balance sheet item.
The next question is from Glyn Lawcock from Barrenjoey.
Just wanted to see if you could give us a little bit of an update on like a quarter ago, you were kind enough to give us the diesel impact $4 a tonne Onslow, $7 at Pilbara Hub, $60 within the lithium business. Is any of that still persisting at the moment now? It feels like you obviously had a very good quarter relative to, I guess, what we thought, and we've seen that across a number of your peers where the diesel price didn't hang in there. Is there any of that still hanging around through your business?
Glyn, look, the diesel price that we're paying today still remains elevated relative to where it was 4 or 5 months ago. So we are still seeing an impact in the quarter that we just had. We were able to absorb that largely through the expanded activity that we had. So -- in terms of shipments and so on. So it still remains an underlying impost in terms of the numbers. But there's been -- as you would see, -- it's been a fair bit of volatility over the last few months. It's been down and then up, and it doesn't seem to take much in the way of rumors, but the oil price to move 5% or 10%. So we've tried to be conservative in the way that we think about the future and our planning. But it is -- I will say that the numbers are lower than they were 4 months ago, 3 months ago.
It would be like 1/4 of what you previously told us you think, or half? Any sort of sense?
Maybe. Maybe half.
All right. Cool. I understand, it's outside your control, but appreciate it.
The next question is from Matthew Costa from CLSA. Matthew wrote, thoughts on longer-term strategy for Bald Hill and capital allocation there, relative to debottlenecking, trains 1 to 3 at Wodgina or executing at Train 4? In terms of sequencing, would these expansions be mutually exclusive at a given point in time?
I think the question is a great question in the sense that it really demonstrates the optionality or some of the optionality that sits within the portfolio across our assets. In terms of Bald Hill, we've only just got our first parcel on a ship, and we're ramping up towards having nameplate at the end of this half or in that quarter, at least. We do believe there is opportunity to expand Bald Hill. We're doing some work on those options. We see the potential to -- that plant is quite simple. So the incremental capital cost of doing that expansion won't be significant. That's one of the things that we're working on. Wodgina, I think we've talked about before. We talked about that in May. That's a fantastic asset. That's something that we're working on at the moment in terms of progressing the design. We're looking at the options there. We're doing that in conjunction with a great JV partner, Albemarle. And those 2 decisions are separate decisions. Obviously, they fit within the overall capital allocation framework. And one of the things the Board will want to think about is where it's pointing where we collectively are pointing capital into the future, but they are separate decisions.
Thank you. There are no further questions, and that concludes today's call. Please reach out to the MinRes team if you have any follow-up questions. You may now disconnect.
Read the full transcript via the API
You're viewing the first half of this call. Get the complete Mineral Resources Limited transcript - plus 251,000+ transcripts from 12,000+ companies, speaker segments and full-text search - through the EarningsAPI REST API or hosted MCP server.
Get an API key View API docs →For developers and AI pipelines
Programmatic access to Mineral Resources Limited earnings transcripts and 251,000+ others is available through the
EarningsAPI REST API and the hosted MCP server.
Quarterly plans from $105 - full transcripts, speaker segments, full-text search,
and the /api/v1/transcripts/recent polling endpoint for ETL pipelines.