Mineral Resources Limited · ASX:MIN
Mineral Resources — H1 FY2023 Earnings Presentation
50 slides from Mineral Resources's earnings presentation, Feb 24, 2023
Slide 1: FY23 Half Year Results
FY23 HALF YEAR RESULTS 2 4 F e b r ua r y 2 0 2 3 ASXMIN
Slide 2: Contents
CONTENTS 1H23 OVERVIEW 03 SAFETY AND SUSTAINABILITY 04 1H23 PERFORMANCE 07 1H23 FINANCIAL PERFORMANCE 09 FUTURE GROWTH 21
Slide 3: 1H23 Overview
1H23 OVERVIEW 2.81 TRIFR CSI Mining Services • Business doubled from 2019 to 2022 ROIC • Advancements in technology driving new opportunities 18.4% Down from 23.9% pcp MinRes Iron Onslow Iron FID and early works under way $2.4bn • REVENUE 74% pcp • Existing sites operational with optimisation focus
Slide 4: 1H23 People and Safety
1H23 PEOPLE AND SAFETY Injury Frequency Rates Per million hours worked 10.0 0.2 2.81 TRIFR Total Recordable Injury Frequency Rate (TRIFR) TRIFR LTIFR Lost Time Injury Frequency Rate (LTIFR) 8.0 6.0 0.12 0.12 0.00 LTI 3.99 5,900+ EMPLOYEES AND 4.0 3.29 2.81 2.31 2.33 CONTRACTORS 2.0 APPRENTICES 0.0 F
Slide 5: Redefining the Workplace Experience
REDEFINING THE WORKPLACE EXPERIENCE LEADING OUR INDUSTRY ✓ Head office – Platinum WELL ✓ Resort style site experience WORKPLACE WELLNESS ✓ More than salary ✓ Services and amenities supporting lifestyle balance BUILDING COMMUNITIES ✓ Redefining FIFO workplace ✓ Bringing together MinRes and external c
Slide 6: 1H23 Sustainability
1H23 SUSTAINABILITY TARGET NET ZERO OPERATIONAL EMISSIONS BY 2050 in line with the Paris agreement1 2.8 CARBON EMISSIONS INTENSITY2 INCREASE TO 68% INDIGENOUS WORKFORCE FEMALE 21.2% WORKFORCE . up 6% pcp TARGET GHG $1.2B+ WA SUPPLIER SPEND REDUCTION OF 50% BY 2035 for current operations3 1. Net zero
Slide 7: 1H23 Performance
1H23 PERFORMANCE • Production volume 138Mt, down 6% pcp Yilgarn Hub • 3.6Mt shipped • $255M EBITDA down 10% pcp Utah Point Hub • 3 new mining services contracts – Tier 1 clients • 5.1Mt shipped • 2 new crushing plants delivered Onslow Iron • Early works underway • $295M capex 7
Slide 8: 1H23 Performance
1H23 PERFORMANCE Mt Marion • 113kdmt spodumene concentrate shipped • Progressed conventional gas program – two new exploration permits in Carnarvon Basin • 8,337t lithium battery chemicals converted • Off-market takeover offer for Norwest Energy – Wodgina now MinRes controlled • 64kdmt spodumene con
Slide 9: Financial Performance
FY23 HALF YEAR RESULTS FINANCIAL PERFORMANCE
Slide 10: 1H23 Underlying Profit and Loss
1H23 UNDERLYING PROFIT AND LOSS UNDERLYING PROFIT AND LOSS ($ MILLION)1 1H22 1H23 VARIANCE $2.4bn REVENUE 74% pcp Revenue 1,354 2,350 996 UNDERLYING $0.9bn Operating costs (1,198) (1,411) (213) EBITDA Underlying EBITDA 156 939 783 503% pcp Underlying EBITDA margin (%) 12% 40% 28% D&A (162) (258) (96
Slide 11: 1H23 Underlying EBITDA
1H23 UNDERLYING EBITDA Controllable External 1. Other comprises of Mining Services ($27M), Central ($23M), Intersegment ($3M) and Iron Ore volumes $15M. 11 2. 1H23 Pro forma EBITDA excluding the impact of Iron Ore prices, shipping, royalties and haulage.
Slide 12: 1H23 Cash Flow
1H23 CASH FLOW CASH FLOW ($ MILLION) 1H22 1H23 VARIANCE • Working capital increase driven by Underlying EBITDA 156 939 783 lithium business transition to Movement on working capital (78) (380) (302) downstream lithium conversion, sale of Net cash flow from operating activities before lithium battery
Slide 13: 1H23 Cash Movement in Working Capital
1H23 CASH MOVEMENT IN WORKING CAPITAL RECEIVABLES TOTAL: ($410M) INVENTORY TOTAL: ($126M) 13
Slide 14: 1H23 Lithium Conversion and Working Capital
1H23 LITHIUM CONVERSION AND WORKING CAPITAL Spodumene Lithium battery Activity Spodumene converted to lithium chemicals sold by shipped battery chemicals by Ganfeng MT MARION Ganfeng Spodumene Revenue revenue and lithium battery chemicals earnings1 recognised Receipt Cash Lithium Spodumene revenue b
Slide 15: 1H23 Capital Expenditure
1H23 CAPITAL EXPENDITURE CAPEX ($ MILLION) GROWTH SUSTAINING1 EXPLORATION 1H23 • 1H23 Capex of $741M includes: Lithium 118 65 3 186 • lithium growth capex relating to the ramp up of two trains and Iron Ore excluding Onslow Iron 12 104 26 142 commissioning of the third train at Wodgina, and Mt Marion
Slide 16: 1H23 Summary Balance Sheet
1H23 SUMMARY BALANCE SHEET BALANCE SHEET($ MILLION) FY22 1H23 VARIANCE Inventories 253 379 126 Trade and other receivables 616 1,026 410 Trade and other payables (637) (832) (195) $1.7bn CASH Other (70) (117) (46) Net working capital 162 456 294 Non-current receivables 665 300 (365) $3.1bn BORROWING
Slide 17: 1H23 Net Debt Waterfall
1H23 NET DEBT WATERFALL 1. Other comprises of amounts advanced to joint venture partners ($20M), purchase of shares under employee share plans ($3M), investments ($15M), FX ($18M) offset by other 17 non-cash movement $13M and proceeds from disposal of PPE $9M.
Slide 18: Snapshot Lithium Influence on Group
SNAPSHOT LITHIUM INFLUENCE ON GROUP 1,200 100% 1,000 80% Underlying EBITDA (Percent of total) Underlying EBITDA ($M) 800 60% 600 40% 400 20% 200 - 0% 2H21 1H22 2H22 1H23 2H21 1H22 2H22 1H23 Lithium Battery Chemicals Spodumene Concentrate Group Earnings Ex Lithium Lithium Battery Chemicals Spodumene
Slide 19: FY23 Capex Guidance
FY23 CAPEX GUIDANCE CAPEX ($ MILLION) GROWTH SUSTAINING EXPLORATION FY23 Lithium 653 90 13 664 Iron Ore excluding Onslow Iron 8 188 96 293 Iron Ore – Onslow Iron 1,114 - - 1,114 Energy - - 43 43 Other Commodities 12 - - 12 Mining Services 7 16 - 22 Central & Other 46 22 - 67 Total capex 1,873 315 15
Slide 20: FY23 Guidance Unchanged
FY23 GUIDANCE UNCHANGED Lithium battery chemicals guidance provided Iron Ore Lithium YILGARN HUB UTAH POINT HUB MT MARION WODGINA Lithium battery Lithium battery Commodity Iron ore Iron ore Spodumene Spodumene chemicals1 chemicals1 MinRes Share 100% 100% 50%2 100% 40%-50%3 100% 11.5 to 12.5kt3 Produ
Slide 21: Future Growth
FY23 HALF YEAR RESULTS FUTURE GROWTH
Slide 22: Setting the Foundations for Future Success
SETTING THE FOUNDATIONS FOR FUTURE SUCCESS Our recent progress supports our plan for transformational growth in the decades ahead • Double business in next 24 • Maximise potential of • Realise full potential of • Advance gas exploration months Onslow Iron project world-class assets and program partn
Slide 23: Growing Our Reputation for Innovation
GROWING OUR REPUTATION FOR INNOVATION GROWTH UNDERPINNED BY: ✓ Proprietary innovation and technology NextGen crushing Jumbo road trains ✓ Low-cost crushing and haulage solutions ✓ Track record for project delivery Transhipping Carbon fibre 23
Slide 24: Mining Services Planned Growth
MINING SERVICES PLANNED GROWTH +65% VOLUME GROWTH VOLUME GROWTH 25% PA FROM NEAR TERM EBITDA PER TONNE UP 14%1 MINRES OPERATED PROJECTS 600 Contract tonnes (Million wmt) 500 400 Wodgina Domestic 4-trains and 9Mwmt international 300 third-party Onslow projects Mt Marion Iron 200 expansion 140Mwmt 30M
Slide 25: Transitioning to a Low-Cost, Long-Life Iron Ore Producer
TRANSITIONING TO A LOW-COST, LONG-LIFE IRON ORE PRODUCER 100 90 Iron ore shipments (100% basis) 80 70 60 50 40 ONSLOW IRON1 – FOB Cost $40/t 30 20 UTAH POINT – FOB Cost $70/t2 10 YILGARN – FOB Cost $90/t2 0 CURRENT PLANNED CAPACITY POTENTIAL CAPACITY CAPACITY Yilgarn Hub Utah Hub Onslow Iron develop
Slide 26: Onslow Iron Project
ONSLOW IRON PROJECT Offtake 50%-75% with 35Mtpa Baowu stage 1 capacity $3bn 30+ years total capital expenditure mine life Resort style A$40/t setting a new FOB Cost ex FIFO standard royalties First ore now expected around June 2024 Capex guidance remains unchanged 26
Slide 27: Western Australian Gas Market
WESTERN AUSTRALIAN GAS MARKET FORECAST DEMAND 2023 to 2032 1800 1600 1400 Domestic demand 1200 remains strong TJ/day 1000 with growth potential 800 600 400 200 0 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 High Scenario Domestic Gas Demand Low Scenario Domestic Gas Demand Source: AEMO Gas Stat
Slide 28: Off-Market Takeover Offer for Norwest Energy
OFF-MARKET TAKEOVER OFFER FOR NORWEST ENERGY MINRES HAS SECURED CONTROL OF NORWEST ENERGY WITH CURRENT VOTING POWER AT 62.67%1 RISKS TO SHAREHOLDERS REWARDS FOR SHAREHOLDERS WHO DO NOT ACCEPT2 WHO DO ACCEPT of financing the Lockyer project given from receiving a premium on RISK Norwest’s limited fin
Slide 29: Existing World-Class Lithium Portfolio
EXISTING WORLD-CLASS LITHIUM PORTFOLIO MT MARION WODGINA KEMERTON MinRes operated in 50/50 partnership MinRes operated in 50/50 partnership Lithium hydroxide plant fed from with Ganfeng with Albemarle2 Greenbushes life-of-mine Current 450ktpa1 operation Producing 5.5% SC effective January Albemarle
Slide 30: Restructured MARBL JV Agreement
RESTRUCTURED MARBL JV AGREEMENT INCREASED EXPOSURE DEFINED PATHWAY COMPLEMENTARY JV Complementary JV partnership Increased exposure and Defined pathway towards model, with MinRes operating operatorship of Wodgina – a full vertical integration within upstream assets and ALB tier 1 operating lithium a
Slide 31: An Integrated Lithium Chemicals Producer
AN INTEGRATED LITHIUM CHEMICALS PRODUCER WORLD CLASS CAPITAL EFFICIENT CONTROL OF HIGH GROWTH UPSTREAM ASSETS CONVERSION CAPACITY (Spodumene concentrate) (Lithium battery chemicals) PRODUCT MARKETING END USER MARKET2 ELECTRIC VEHICLES MT MARION GANFENG TOLLING (50%) (51%)1 1.39Mt LCE 0.39Mt LCE Curr
Slide 32: Global Lithium Demand Is Increasing
GLOBAL LITHIUM DEMAND IS INCREASING GLOBAL ELECTRIC VEHICLE SALES FORECAST1 2020 – 2030 % Growth (rebased) 3,000% 2,500% 2,000% 1,500% 1,000% 500% - 2020 2022 2024 2026 2028 2030 China United States Europe Rest of world Integrated 2025 LITHIUM HYDROXIDE COST CURVE1 producers 100,000 90,000 Productio
Slide 33: Well Positioned to Respond to Growing Lithium Demand
WELL POSITIONED TO RESPOND TO GROWING LITHIUM DEMAND DOUBLING LITHIUM CHEMICAL CAPACITY FROM OUR TIER 1 RESOURCES OVER THE NEXT FIVE YEARS1 Capacity, ktpa lithium hydroxide (attributable share)2 Greenbushes Offtake Mt Marion Wodgina I & II Wodgina III Wodgina IV 120 61 Current Lithium Potential Lith
Slide 34: Questions?
FY23 HALF YEAR RESULTS QUESTIONS?
Slide 35: Appendix
FY23 HALF YEAR RESULTS APPENDIX
Slide 36: 1H23 Reconciliation of Non-IFRS Information
1H23 RECONCILIATION OF NON-IFRS INFORMATION RECONCILIATION OF NON-IFRS FINANCIAL INFORMATION ($ MILLION) 1H22 2H22 FY22 1H23 Total Revenue 1,354 2,064 3,418 2,350 Underlying EBITDA 156 868 1,024 939 D&A (162) (190) (352) (258) Underlying EBIT (6) 678 672 681 Interest income 4 7 11 18 Finance costs (
Slide 37: 1H23 Operating Segments
1H23 OPERATING SEGMENTS • Mining Services revenue growth 1H22 1H23 OPERATING SEGMENTS 1H22 1H22 1H23 1H23 driven by increased activity on Underlying Underlying ($ million) Revenue Margin Revenue Margin EBITDA EBITDA internal contracts. Mining Services margin of 21% was down from 23% in Mining Servic
Slide 38: Mining Services Performance
MINING SERVICES PERFORMANCE Mining Services production-related Mining Services less Construction EBITDA3 contract tonnes1 Mining Services less Construction EBITDA ($M) 300 283 2.5 160 251 255 146 138 250 229 228 2.0 140 EBITDA per Tonne ($/wmt) 125 128 124 200 189 Contract tonnes (Million wmt) 120 1
Slide 39: 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. 1H23 Mining Services segment revenue (external and inter-segment). 39 2. MinRes’ Mining Services contract rates are not linked
Slide 40: Iron Ore Utah Point Hub
IRON ORE UTAH POINT HUB UTAH POINT HUB (100% attributable basis, unless UNITS 1H22 2H22 FY22 1H23 otherwise indicated) TMM Mwmt 26.3 20.2 46.6 19.6 Ore Mined kwmt 5,704 5,856 11,560 5,394 Produced kwmt 5,399 5,827 11,225 6,212 • 5.1Mt exported in 1H23, 26% lump Shipped kwmt 5,436 5,097 10,533 5,098
Slide 41: Iron Ore Yilgarn Hub
IRON ORE YILGARN HUB YILGARN HUB (100% attributable basis, unless UNITS 1H22 2H22 FY22 1H23 otherwise indicated) • 3.6Mt exported in 1H23, slightly lower on pcp to allow for the processing TMM Mwmt 31.8 27.4 59.2 20.5 plant to be successfully converted kwmt Ore Mined 3,774 3,850 7,624 3,883 to proce
Slide 42: Lithium Mt Marion Spodumene Concentrate
LITHIUM MT MARION SPODUMENE CONCENTRATE MT MARION1 (50% attributable basis, unless otherwise UNITS 1H22 2H22 FY22 1H23 Spodumene concentrate indicated) • 113kdmt (50% share) of spodumene TMM (100% basis) Mwmt 15.3 15.8 31.1 23.8 concentrate shipped in 1H23, 29% Produced kdmt 99 116 215 115 high grad
Slide 43: Lithium Mt Marion Lithium Battery Chemicals
LITHIUM MT MARION LITHIUM BATTERY CHEMICALS MT MARION1 UNITS 1H22 2H22 FY22 1H23 Converted spodumene kdmt - 104 104 120 Conversion rate x - 15.7 15.7 14.3 Lithium battery chemicals sold2 t - 6,722 6,722 8,337 Lithium battery chemicals Achieved price (excluding VAT)3 US$/t - 68,060 68,060 73,000 Lith
Slide 44: Lithium Wodgina Spodumene Concentrate
LITHIUM WODGINA SPODUMENE CONCENTRATE WODGINA1 UNITS 1H22 2H22 FY22 1H23 (40% attributable basis, unless otherwise indicated) TMM (100% basis) Mwmt - 0.7 0.7 4.6 Produced kdmt - 8 8 62 Total Spodumene Total Spodumene Spodumene shipped - total kdmt - 17 17 64 • High spodumene FOB Costs during Spodume
Slide 45: Lithium Wodgina Lithium Battery Chemicals
LITHIUM WODGINA LITHIUM BATTERY CHEMICALS WODGINA1 Units 1H22 2H22 FY22 1H23 (40% attributable basis, unless otherwise indicated) Conversion rate x - - - 7.4 Lithium battery chemicals sold t - - - 2,290 Revenue (excluding VAT) US$/t - - - 51,209 Lithium battery chemicals Lithium conversion Revenue (
Slide 46: Conservatively Geared Through Cycles
CONSERVATIVELY GEARED THROUGH CYCLES 2.1x 0.7x 0.8x (0.0x) (0.1x) (0.2x) (0.1x) (0.3x) (0.4x) (0.7x) FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 1H23 Net Netdebt/(cash) debt/(cash)to toUnderlying UnderlyingEBITDA EBITDA(1) 1 1. On rolling 12-month basis. 46
Slide 47: Credit Metrics and Debt Maturity Profile
CREDIT METRICS AND DEBT MATURITY PROFILE CREDIT METRICS FY22 1H23 DEBT MATURITY PROFILE1 Cash $2.4bn $1.7bn 2.5 Net debt $0.7bn $1.4bn 2.0 Net gearing 18% 29% 1.5 $billion Gross gearing 49% 47% 1.0 Net debt to Underlying EBITDA2 0.7x 0.8x 0.5 Gross debt to Underlying EBITDA2 3.1x 1.7x 0.0 FY23 FY24
Slide 48: Glossary of Terms
GLOSSARY OF TERMS 1H, 2H, FY First half, second half, full year LiOH Lithium hydroxide $ Australian dollar Lithium battery Lithium hydroxide and lithium carbonate chemicals US$ United States dollar LTIFR Lost time injury frequency rate bn Billion M Million CAGR Compound annual growth rate Net debt /
Slide 49: 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 www.mrl.com.au ASXMIN
Slide 50: Disclaimer
DISCLAIMER The results of the Company are recorded under Australian Accounting Standards (“AAS”). This presentation contains certain financial data that are “Non IFRS” financial measures. Such measures include EBITDA and Underlying EBITDA. The Company believes that such “non IFRS financial measures”