Mineral Resources Limited · ASX:MIN
Mineral Resources — FY2022 Earnings Presentation
58 slides from Mineral Resources's earnings presentation, Aug 29, 2022
Slide 1: FY22 Full Year Results
FY22 FULL YEAR RESULTS 29 AUGUST 2022 ASX:MIN
Slide 2: Contents
CONTENTS HIGHLIGHTS 03 SUSTAINABILITY PERFORMANCE 05 FINANCIAL PERFORMANCE 07 OPERATIONAL PERFORMANCE 19 FUTURE DIRECTION 24 APPENDIX 44
Slide 3: FY22 Highlights
FY22 HIGHLIGHTS STRUCTURED FOR GROWTH ✓ Underlying EBITDA $1.0bn ✓ Cash at bank $2.4bn ✓ Completed US$1.25bn bond ✓ Total dividend declared $1.00 per share ✓ ASX50 Index MINING LITHIUM IRON ORE ENERGY SERVICES ✓ Restructured business into 4 growth pillars: • Separate management • MinRes corporate st
Slide 4: FY22 Business Highlights
FY22 BUSINESS HIGHLIGHTS Mining Services Innovative • Record contract volumes 274Mt, up 10% BEST YEAR EVER • Five new contracts – three renewals FOR PROJECT DEVELOPMENT • Developed Marine division • Developed low cost pit-to-port haulage solution Lithium Significant Expansion • Restructuring Albemar
Slide 5: FY22 Sustainability
FY22 SUSTAINABILITY People • Key focus on workplace wellness • 5,000+ employees and contractors • Employees up 18% • 139 entry level people – 29% female Safety 2.33 0.00 TRIFR1 LTI1 Community • $5.8M – donations • $1.7bn – local procurement Indigenous • $10M – Indigenous procurement (99% to Traditio
Slide 6: Protecting Our Environment
PROTECTING OUR ENVIRONMENT Decarbonisation • Net zero operational emissions by 2050 • 50% emission reduction by 2035 • 2.1MW solar array installed at Wonmunna • Autonomous road trains – electric by 2025 • 100% carbon neutral electricity for head office Water and waste management • >3,300t waste and
Slide 7: Financial Performance
FINANCIAL PERFORMANCE
Slide 8: FY22 Financial Highlights
FY22 FINANCIAL HIGHLIGHTS Revenue ROIC (After Tax) $3.4bn 8% 14.1% Operating Cash Flow Underlying EBITDA $344M 79% $1.0bn 46% Cash Capex $2.4bn $800M US Bonds Raised Index Inclusion US$1.25bn ASX50 8
Slide 9: FY22 Underlying Profit and Loss
FY22 UNDERLYING PROFIT AND LOSS • Revenue of $3.4bn down 8% on pcp and Underlying Underlying Profit & Loss ($ million) FY21 FY22 Variance EBITDA of $1.0bn down 46% on pcp Revenue 3,734 3,418 (316) • FY22 Revenue and Underlying EBITDA driven by: Operating costs (1,834) (2,394) (560) • Record iron ore
Slide 10: FY21 to FY22 Underlying EBITDA
FY21 TO FY22 UNDERLYING EBITDA Controllable External 1. Includes Mt Marion lithium hydroxide volumes $204M 2. Central ($55M) and Intersegment ($22M). 10 3. FY22 Underlying EBITDA excluding the impact of commodity prices, shipping and royalties.
Slide 11: FY22 Cash Flow
FY22 CASH FLOW • Working capital reflects first time impacts of Wodgina Cash Flow FY21 FY22 Variance spodumene sales and lithium hydroxide sales from Mt ($ million) Marion. Lithium price increase over the period also impacts Underlying EBITDA 1,901 1,024 (877) receivables balance Movement in working
Slide 12: FY22 Working Capital Movement
FY22 WORKING CAPITAL MOVEMENT Receivables Total: ($295M) 12
Slide 13: FY22 Capital Expenditure
FY22 CAPITAL EXPENDITURE Continuing investing for the future FY22 Capex of $800M includes: Capex Growth Sustaining1 Exploration FY22 • Lithium growth capex on the restart and ($ million) ramp up of 2 trains at Wodgina Lithium 30 22 - 53 • Iron Ore growth capex inclusive of the Iron Ore excluding Ons
Slide 14: FY22 Summary Balance Sheet
FY22 SUMMARY BALANCE SHEET Summary Balance Sheet FY21 FY22 Variance ($ million) • Closing cash of $2.4bn and borrowings of $3.1bn, Inventories 123 253 130 reflecting completion of US$1.25bn Notes offering in Trade and other receivables 331 627 295 March 2022 Trade and other payables (582) (636) (54)
Slide 15: FY21 to FY22 Net Debt Waterfall
FY21 TO FY22 NET DEBT WATERFALL 1. Divestment of Pilbara Minerals (PLS: ASX) shareholding, net of $65M tax paid. 15 2. Other comprises of proceeds from disposal of PPE $[39]M, amounts received from joint venture partners $17M; less purchase of shares under employee share plans ($20M).
Slide 16: Value Creation Outcomes
VALUE CREATION OUTCOMES Return on Invested Capital After Tax (ROIC) Cumulative Returns to Shareholders Since Listing Growth in Dividends ($bn) 60% Since Listing 8.0 50% 7.0 40% 6.0 30% 5.0 20% 4.0 3.0 10% 2.0 0% 1.0 -10% 0.0 Invested capital Cumulative operating cashflow before interest and tax 4-yr
Slide 17: FY23 Guidance
FY23 GUIDANCE Iron Ore Lithium YILGARN HUB UTAH POINT HUB MT MARION WODGINA Commodity Iron ore Iron ore Spodumene Spodumene MinRes Share 100% 100% 51%1 50%2 Volume 6.7 to 7.3Mt 10.5 to 11.5Mt 300 to 330kdmt 190 to 210kdmt (Shipped MinRes share) 20% Lump 20% Lump 40% High-grade 100% SC6 FOB costs3 $8
Slide 18: FY23 Capital Expenditure Guidance
FY23 CAPITAL EXPENDITURE GUIDANCE Capex Growth Sustaining1 Exploration FY23 ($ million) Lithium 153 90 13 255 Iron Ore excluding Onslow Iron 8 188 96 293 Iron Ore - Onslow Iron 1,311 - - 1,311 Energy - - 99 99 Other Commodities 12 - - 12 Mining Services 7 16 - 22 Central & Other 46 22 - 67 Total Cap
Slide 19: Operational Performance
OPERATIONAL PERFORMANCE
Slide 20: Our Business
OUR BUSINESS World’s largest crushing contractor Leading pit-to-port mining services provider World’s top five lithium producer Australia’s fifth largest iron ore producer Largest landholder of onshore gas acreage in the Perth and Carnarvon Basins 20
Slide 21: FY22 Mining Services Performance
FY22 MINING SERVICES PERFORMANCE MINING CRUSHING CONSTRUCTION HAULAGE MARINE SERVICES AND PROCESSING • 25% CAGR growth since • 23 operating plants • Re-commissioned • Advanced trials of world- • Construction of first two FY19 Wodgina Trains 1 and 2 first autonomous road transhippers commenced with •
Slide 22: FY22 Commodities Performance
FY22 COMMODITIES PERFORMANCE MT MARION WODGINA KEMERTON YILGARN HUB UTAH POINT LITHIUM LITHIUM LITHIUM IRON ORE IRON ORE HYDROXIDE • TMM 31.1Mt • Train 1 and 2 commenced • Train 1 first product – July • TMM 59.2Mt • TMM 46.6Mt production • Produced 431kdmt • Train 2 – commissioning, first • Produced
Slide 23: FY22 Energy Performance
FY22 ENERGY PERFORMANCE GAS Perth Basin • Largest acreage holder1 • Significant gas discovery (Lockyer Deep 1) • Production testing completed in March 2022 • Very low impurities – clean natural gas • Anticipated low-cost gas based on proximity to infrastructure and reservoir deliverability Carnarvon
Slide 24: Future Direction
FUTURE DIRECTION
Slide 25: Putting Our People First
PUTTING OUR PEOPLE FIRST Workplace wellbeing • Head office – new standard for workplace wellness – targeting Platinum WELL • Resort style on site accommodation developed Safe and respectful workplaces • Female friendly and family environment • Zero tolerance – sexual harassment and anti- social beha
Slide 26: Mining Services Innovative Growth
MINING SERVICES INNOVATIVE GROWTH Volume Growth 25% pa +65% Volume growth from near NextGen Crushing Margin per tonne up 14% term, MinRes operated projects • MinRes design and IP • 5 – 50Mtpa modular construction 600 • Rapid deployment • Displace higher cost fixed plants • Lower dust emission 500 CR
Slide 27: Iron Ore Existing Operations
IRON ORE EXISTING OPERATIONS Utah Point • Continue to produce at 11Mtpa (Wonmunna and Iron Valley) • Wonmunna at steady run-rate • Assessing long term options – satellite deposits (Lamb Creek, Wedge Point) Yilgarn – Existing hematite • Currently 7Mtpa – 15 pits spanning +200km • Go forward – simplif
Slide 28: Iron Ore Pilbara Hub Development
IRON ORE PILBARA HUB DEVELOPMENT Landmark rail and port agreement unlocks stranded iron ore assets Mine • JV Partner: Brockman Mining (50%) • 20Mtpa1 ~30+ year life, Fe 60.5% • MinRes to manage Infrastructure • MinRes/Hancock JV shared rail and port access2 • Stanley Point Berth 3 approved by WA Gov
Slide 29: Onslow Iron Development
ONSLOW IRON DEVELOPMENT Transformational, low cost, long life sustainable iron ore project with strong joint venture partners PROJECT HIGHLIGHTS ✓ Board approved ✓ Stage 1 – 30Mtpa, 35Mtpa capacity1 ✓ 30 year project life2 ✓ Low operating cost ✓ Low risk jurisdiction ✓ Low capital intensity – US$65
Slide 30: Onslow Iron Development – Mine Co
ONSLOW IRON DEVELOPMENT – MINE CO Unlocking large stranded deposits in the West Pilbara region RHIOJV (MINE CO) REVISED STRUCTURE2 Assets • Red Hill Iron Ore (RHIOJV) tenements • Ore Reserves 537 Mt at 57.3% Fe1 Baosteel AMCI Resources POSCO WA • Mineral Resources 820 Mt at 56.5% Fe1 Australia Pty I
Slide 31: Onslow Iron Development: The MinRes Model
ONSLOW IRON DEVELOPMENT THE MINRES MODEL Annuity mining services and infrastructure contracts MINING SERVICES AND INFRASTRUCTURE – 100% MINRES Mining services • NextGen crushing Assets • Autonomous 320T jumbo road trains • 5 x 20kt transhippers NextGen crushing Revenue • MinRes charges a $/t to Mine
Slide 32: Energy Gas Program
ENERGY GAS PROGRAM Low cost energy security and transitioning to net zero emissions Perth basin Lockyer Deep 1 Gas discovery • Plan to drill at least two exploration/appraisal wells in FY23 • Targeting two additional appraisal wells in FY24 • Plan to bring into production in FY24 Other acreage • Pla
Slide 33: Lithium Major Beneficiary of Global EV Growth
LITHIUM MAJOR BENEFICIARY OF GLOBAL EV GROWTH 2021 Global EV Sales 11M Vehicles2 Target 100% EV No ICE1 sales from EU parliament approved ICE ban by 2035; Germany targeting 2030; Norway targeting new car by 2035 2030 sales by 2025 to be zero-emissions; Italy targeting 30% EV sales by 2030 2030 Globa
Slide 34: Strong Lithium Market Fundamentals
STRONG LITHIUM MARKET FUNDAMENTALS Strong EV demand to continue Driving strong demand for lithium Lithium provides the best exposure Global passenger EV units1 Battery-grade lithium chemicals demand1 IEA World Energy Outlook: clean 1,800 energy minerals demand growth, 2030 40 Battery-grade lithium c
Slide 35: MinRes Integrated Model – Price Outlook
MINRES INTEGRATED MODEL – PRICE OUTLOOK 2025 Lithium hydroxide cost curve1 Lithium hydroxide price outlook 1,2,3,4 Lithium Spodumene Concentrate - Actual (LHS) 60,000 2025 battery-grade lithium hydroxide price (contract; nominal) = US$55,048/t LiOH3 Lithium Spodumene Concentrate - Forecast (Wood Mac
Slide 36: Mt Marion Lithium
MT MARION LITHIUM JV 50% (operator), 50% Resources1 Mineral Resources: 73Mt at 1.2% Li2O Two stage upgrade to 900ktpa mixed grade by Expansion December 2022 for $120M2 Spodumene Capacity ✓ 900ktpa3 mixed grade – 600ktpa at 6% Lithium ✓ MinRes’ 51% offtake converted into lithium Hydroxide hydroxide 1
Slide 37: Update to Proposed Restructure of MARBL JV
UPDATE TO PROPOSED RESTRUCTURE1 OF MARBL JV ✓ Ownership to change from 40% to 50% MinRes WODGINA ✓ Increased exposure and management of Wodgina – a Tier 1 lithium asset ✓ MinRes to operate WODGINA LiOH CONVERSION ✓ MinRes and Albemarle to jointly fund new 50/50 JV ✓ JV to develop hydroxide plants to
Slide 38: Wodgina Lithium
WODGINA LITHIUM JV1 50% (operator), 50% Ore Reserves: 152Mt at 1.2% Li2O Resources2 Mineral Resources: 259Mt at 1.2% Li2O ✓ Train 1 – producing SC6 at nameplate 250ktpa2 Current ✓ Train 2 – first SC6 produced in July 2022 Capacity3 ✓ Train 3 – preparing for commissioning. Earliest production mid 202
Slide 39: Kemerton Lithium
KEMERTON LITHIUM JV1 Ownership to change from 40% to 15% MinRes Feed Greenbushes Current Train 1 and 2 – 50ktpa lithium hydroxide capacity2 ✓ Train 1 – first product July, 6 month qualification period Expansion ✓ Train 2 – first product expected 2Q FY23 1. Proposed structure subject to negotiations
Slide 40: Five Year Plan Lithium
FIVE YEAR PLAN LITHIUM Anticipated lithium hydroxide nameplate conversion capacity (attributable share) ktpa 7.5ktpa ~70ktpa ~118ktpa ~40ktpa 1 2 3 Mt Marion Wodgina Kemerton Target Production LiOH Train I & II Capacity 1. Assuming ramp up to 900ktpa mixed grade (equivalent to 600ktpa at 6%) and ass
Slide 41: Towards Battery Manufacturing
TOWARDS BATTERY MANUFACTURING LITHIUM GROWTH VISION Drive battery manufacturing opportunities in Australia. Harness Mineral Resources’ impressive lithium portfolio and world-class production capacity to help establish a local battery supply chain – supported by long-term supply Our ambitious long-te
Slide 42: Our 30 Year Track Record
OUR 30 YEAR TRACK RECORD 1992 2006 450 $100M 2022 5,000 $12bn FOUNDED ASX LISTING PEOPLE MARKET CAP ASX 50 PEOPLE MARKET CAP Our track record since 2006 ASX listing • Grown total assets 50 times to $7.8bn – 30% pa growth • Delivered 21% pa return on invested capital1 • Generated $7.4bn in Underlying
Slide 43: Thank You Q&A?
THANK YOU Q&A? AO resotRces
Slide 44: Appendix Additional Information
APPENDIX ADDITIONAL INFORMATION
Slide 45: Sustainability Highlights
SUSTAINABILITY HIGHLIGHTS SAFETY AND WELLBEING ENVIRONMENT COMMUNITY PEOPLE Safety focus – no LTIs, TRIFR Financial and social benefits +5,0002 employees and Net Zero operational for traditional owners contractors 2.33, LTIFR 0.001 emissions by 2050 $5.8M pa spend in 1393 entry level employees – Tar
Slide 46: Reconciliation of Non-IFRS Financial Information
RECONCILIATION OF NON-IFRS FINANCIAL INFORMATION Reconciliation of Non-IFRS Financial Information 1H21 2H21 FY21 1H22 2H22 FY22 ($ million) Total Revenue 1,531 2,203 3,734 1,354 2,064 3,418 Underlying EBITDA 763 1,138 1,901 156 868 1,024 Depreciation and amortisation (104) (154) (258) (162) (190) (3
Slide 47: Operating Segments
OPERATING SEGMENTS • Mining Services revenue and Underlying EBITDA growth was Operating Segments FY21 FY21 FY21 FY22 FY22 FY22 driven by additional volumes at Utah Point Hub and new ($ million) Revenue Underlying Margin Revenue Underlying Margin external contracts won during the year EBITDA EBITDA M
Slide 48: Mining Services FY19 to FY22 Performance
MINING SERVICES FY19 TO FY22 PERFORMANCE Mining Services less construction EBITDA3 Mining Services production-related contract tonnes1 300 283 2.5 Mining Services less Construction EBITDA ($M) 160 251 146 250 229 228 2.0 140 128 125 EBITDA per Tonne ($/wmt) 124 189 Contract tonnes (Million wmt) 120
Slide 49: Mining Services Key Business Metrics
MINING SERVICES KEY BUSINESS METRICS REVENUE1,2 BY COMMODITY REVENUE1 BY LENGTH OF CONTRACT Iron ore Lithium Gold Construction and Other ≤ 3 yrs 3-5 yrs 5-10 yrs > 10 yrs 1. FY22 Mining Services segment revenue (external and inter-segment). 49 2. MinRes' Mining Services contract rates are not linked
Slide 50: Iron Ore Utah Point Hub
IRON ORE UTAH POINT HUB Utah Point Hub 1H21 2H21 FY21 1H22 2H22 FY22 Exports kwmt 1,415 1,727 3,142 1,295 1,285 2,580 • Record 10.5Mt exported in FY22, 24% lump. Lower lump Fe grade % 58.5% 58.8% 58.7% 58.3% 58.9% 58.6% proportion is due to Wonmunna ore, which has a lower lump to fines ratio, making
Slide 51: Iron Ore Yilgarn Hub
IRON ORE YILGARN HUB Yilgarn Hub 1H21 2H21 FY21 1H22 2H22 FY22 Exports kwmt 1,874 603 2,477 - - - • 8.7Mt exported in FY22 with the removal of high cost tonnes from production in response to the rapid decline in Fe grade % 57.8% 57.5% 57.7% - - - Platts index and widening discounts in the first half
Slide 52: Iron Ore Realisations
IRON ORE REALISATIONS 1. Realisation excluding the impact of price adjustments for finalisation of iron ore sales contracts on prior period shipments. 52
Slide 53: Lithium Mt Marion
LITHIUM MT MARION Lithium Spodumene Mt Marion Lithium 1H21 2H21 FY21 1H22 2H22 FY22 • FY22 spodumene concentrate exports of Exports (at 100%) kdmt 203 282 485 207 235 442 442kdmt, 31% high grade High Grade Product contribution % 76% 66% 70% 55% 11% 31% • Temporary lower high grade product mix and Re
Slide 54: Conservatively Geared Through Cycles
CONSERVATIVELY GEARED THROUGH CYCLES 2,500 2,000 1,500 1,000 $ million 500 - (500) (1,000) (1,500) FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Net (Debt)/Cash Underlying EBITDA 54
Slide 55: Credit Metrics and Debt Maturity Profile
CREDIT METRICS AND DEBT MATURITY PROFILE CREDIT METRICS FY21 FY22 DEBT MATURITY PROFILE1 Cash and equivalents $1.5bn $2.4bn 2.5 Net debt/(cash) ($280M) $698M 2.0 Net gearing (9%) 18% 1.5 $billion Gross gearing 28% 49% 1.0 Net debt/(cash) to Underlying EBITDA2 (0.1x) 0.7x 0.5 Gross debt to Underlying
Slide 56: Glossary
GLOSSARY 1H, 2H, FY First half, second half, full year LTIFR Lost Time Injury Frequency Rate $ Australian dollar M Million US$ United States dollar Net debt / (cash) Gross debt less cash and cash equivalents. Includes lease liabilities. bn Billion pcp Prior corresponding period CAGR Compound annual
Slide 57: Investor Relations
INVESTOR RELATIONS Chris Chong Investor Relations Manager T: +61 8 9315 0213 E: chris.chong@mrl.com.au OFFICE: 20 Walters Drive, Osborne Park, WA 6017 POSTAL: Locked Bag 13, Osborne Park DC, WA 6916 P +61 8 9329 3600 F +61 8 9329 3601 www.mrl.com.au ASX:MIN
Slide 58: Disclaimer
DISCLAIMER This presentation should not be considered as an offer or invitation to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in the Company will be entered into