Mineral Resources Limited · ASX:MIN
Mineral Resources — Investor Presentation (February 2022)
39 slides from Mineral Resources's investor presentation, Feb 9, 2022
Slide 1: FY22 Half Year Results
FY22 HALF YEAR RESULTS 9 FEBRUARY 2022 ASX:MIN
Slide 2: Contents
CONTENTS HIGHLIGHTS 3 SUSTAINABILITY PERFORMANCE 4 FINANCIAL PERFORMANCE 7 LOCKED IN GROWTH 13 APPENDIX 24 2
Slide 3: 1H22 Highlights
1H22 HIGHLIGHTS Mining Services • 4 new contracts • 3 renewals • On track for FY22 guidance of 15-20% growth • Remained COVID free Iron Ore • Ashburton Hub – signed HoA to develop Red Hill Iron Ore JV • TRIFR 2.25 • Port and rail sharing agreement with Hancock/Roy Hill • Allocated Stanley Point Port
Slide 4: 1H22 Safety and People
1H22 SAFETY AND PEOPLE Injury Frequency Rates Per million hours worked 8.0 TRIFR LTIFR 1.0 2.25 0.10 TRIFR1 LTI1 Total Recordable Injury Frequency Rate (TRIFR) 0.8 Lost Total Injury Frequency Rate (LTRIFR) 6.0 0.6 4,800+ 4.0 Employees and contractors2 0.4 72 2.25 82 2.0 0.2 Trainees/ 0.10 Apprentice
Slide 5: 1H22 Sustainability Performance
1H22 SUSTAINABILITY PERFORMANCE Greenhouse gas (GHG) emissions1 800 4.0 Emissions Intensity (Tonnes CO2 per TMM) 700 3.5 600 3.0 500 2.5 CO2 Equivalent (kt) 2.4 400 2.0 300 1.5 200 1.0 100 0.5 0.0 FY17 FY18 FY19 FY20 FY21 1H22 Diesel Gas Electricity Emissions Intensity Net zero emissions by 2050 in
Slide 6: 1H22 Performance
1H22 PERFORMANCE MINING SERVICES IRON ORE LITHIUM • Production volume 146Mt, up 18% pcp • Largest and sharpest price decline in history • Mt Marion1: • $281M EBITDA up 20% pcp • Significant provisional pricing adjustments • TMM 15.3Mt,198kdmt produced, 207kdmt shipped • Strong predictable result • Y
Slide 7: Financial Performance
FINANCIAL PERFORMANCE K€ MINERAL RESOURCES
Slide 8: 1H22 Underlying Profit and Loss
1H22 UNDERLYING PROFIT AND LOSS • Revenue of $1.4bn down 12% on pcp and EBITDA of $156M down Underlying Profit & Loss1 1H21 1H22 Variance 80% on pcp ($ million) Revenue 1,531 1,354 (177) • 1H22 Revenue and EBITDA driven by: Operating costs (768) (1,198) (430) • Significant reduction in iron ore reve
Slide 9: 1H21 to 1H22 Underlying EBITDA
1H21 TO 1H22 UNDERLYING EBITDA Controllable External 5% Growth in Controllable EBITDA 1. Central ($19M) and Intersegment ($20M). 9 2. 1H22 Underlying EBITDA excluding the impact of commodity prices, shipping and royalties.
Slide 10: 1H22 Cash Flow
1H22 CASH FLOW • Cash conversion impacted by outflow in working capital reflecting the Cash Flow 1H21 1H22 Variance significant fall in iron ore prices and provisional pricing adjustments ($ million) Underlying EBITDA 763 156 (607) • Tax paid of $159M in relation to FY21 Movement in working capital
Slide 11: 1H22 Capital Expenditure
1H22 CAPITAL EXPENDITURE 1H22 Capex of $403M includes: Capex 1H22 • Commodities growth capex of $66M including: ($ million) • Completion of Wonmunna development Commodities 66 Mining Services 26 • Development of Lucky Bay Garnet project1 Ashburton Hub development 36 • Natural gas drilling programs i
Slide 12: 1H22 Summary Balance Sheet
1H22 SUMMARY BALANCE SHEET Summary Balance Sheet FY21 1H22 Variance ($ million) • Closing cash of $0.8bn Inventories 123 192 70 • Increase in inventories primarily from reclassification of Wodgina Trade and other receivables 331 199 (133) stockpiles from non-current to current Trade and other payabl
Slide 13: Locked In Growth
LOCKED IN GROWTH 13 13
Slide 14: Locked In Growth Next Years
LOCKED IN GROWTH NEXT 5 YEARS LOCKED IN GROWTH FROM TIER 1 ASSETS IN THE WORLD’S BEST MINING JURISDICTION WITH TIER 1 CLIENTS AND JV PARTNERS Mining Services • Expect to average 15-20% yoy growth over next 5 years Iron Ore • Transition to low cost, long life mines • Add 30Mtpa from Ashburton Hub wit
Slide 15: Mining Services Growth
MINING SERVICES GROWTH SUSTAINABLE GROWTH BY OWNING AND OPERATING SIGNIFICANT INFRASTRUCTURE DELIVERING PREDICTABLE LONG TERM CASH FLOW Locked in 15-20% growth over next 5 years via: 1) Growth with Tier 1 clients NextGen Crushing • Expect 10-15% pa growth over next 3 years 2) Growth with significant
Slide 16: Iron Ore Growth
IRON ORE GROWTH LOCKED IN LARGE, LOW-COST, LONG-LIFE PROJECTS WITH STRONG JOINT VENTURE PARTNERS ASHBURTON HUB Stage 1 – 30Mtpa, +30 year mine life, Fe 57.5% • Heads of Agreement with APIJV partners • MRL has FID approval subject to APIJV partners agreement • MRL has commenced long-lead items procur
Slide 17: Iron Ore Growth
IRON ORE GROWTH LOCKED IN LARGE, LOW-COST, LONG-LIFE PROJECTS WITH STRONG JOINT VENTURE PARTNERS PILBARA HUB >20Mtpa, +30 year mine life, Fe 60.5% MineCo • JV Partner: Brockman Mining (ASX: BCK) • MRL to manage InfraCo • Haul road from Marillana to Mulga Downs • MRL/Hancock/Roy Hill JV shared rail a
Slide 18: Lithium Growth
LITHIUM GROWTH Top 5 global lithium producer ALB MRL JV Non-binding agreement with Albemarle (ALB) to expand the Joint Venture1 Best mining jurisdiction in the WODGINA SPODUMENE (ALB/MRL 50/50) world • Ownership change from 60/40 (ALB/MRL) to 50/50 • Stable high quality government • MRL to manage an
Slide 19: Mt Marion Lithium Growth
MT MARION LITHIUM GROWTH COMMENCING LITHIUM HYDROXIDE SALES AT WORLD CLASS LITHIUM MINE WITH A TIER 1 PARTNER MT MARION (50/50 JV WITH GANFENG) Current production – 450-475ktpa1 Two studies underway to grow spodumene production • Yield enhancement • Crushing and processing upgrades to change graduat
Slide 20: ALB MRL JV Lithium Growth
ALB MRL JV LITHIUM GROWTH COMMENCING LITHIUM HYDROXIDE SALES AT WORLD CLASS LITHIUM MINE WITH A TIER 1 PARTNER WODGINA SPODUMENE • Train 1 restart well advanced – first concentrate expected April 2022 • Train 1 capacity – 250ktpa1 • Train 2 and 3 capacity – 500ktpa1 – restart in line with market dem
Slide 21: Gas Growth Lockyer Deep
GAS GROWTH LOCKYER DEEP 1 2022: Production test and drill appraisal wells LARGEST ACREAGE HOLDER IN ONSHORE PERTH1 AND CARNARVON BASINS2 Lockyer Deep Gas Discovery • Drilled September 2021 – Perth Basin – total depth 4,274 metres • Significant gas discovery • Production testing expected to commence
Slide 22: FY22 Guidance
FY22 GUIDANCE Yilgarn Hub Utah Point Hub Mt Marion Wodgina Kemerton Commodity Iron ore Iron ore Spodumene Spodumene Lithium hydroxide Ownership 100% 100% 50% 40%5 40% Restart with first Under Exports1,2 8.0 to 8.5Mt 10.5 to 11Mt 450 to 475kt production Q4 FY22 construction Costs3 $96-$104/t $80-88/t
Slide 23: Thank You Questions?
THANK YOU QUESTIONS? 23
Slide 24: Appendix Additional Information
APPENDIX ADDITIONAL INFORMATION 24 24
Slide 25: Reconciliation of Non-IFRS Financial Information
RECONCILIATION OF NON-IFRS FINANCIAL INFORMATION Reconciliation of Non-IFRS Financial Information 1H21 2H21 FY21 1H22 ($ million) Total Revenue 1,531 2,203 3,733 1,354 Underlying EBITDA 763 1,138 1,901 156 Depreciation and amortisation (104) (154) (258) (162) Underlying EBIT 659 984 1,643 (6) Intere
Slide 26: FY22 Capital Expenditure Guidance
FY22 CAPITAL EXPENDITURE GUIDANCE CAPEX ($ million) FY22 Commodities 176 Mining Services 68 Ashburton Hub development 62 Corp Office and Other 124 Total Growth Capex 430 Deferred Stripping 162 Commodities 102 Mining Services 50 Central and Other 7 Total Sustaining Capex 320 Total Capex1 750 1. Capex
Slide 27: Operating Segments
OPERATING SEGMENTS • Mining Services revenue and EBITDA growth in 1H22 was Operating Segments 1H21 1H21 1H21 1H22 1H22 1H22 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 Mini
Slide 28: 1H22 Net Debt Waterfall
1H22 NET DEBT WATERFALL 1. Net investments and acquisitions comprises of ($200M) acquisition of RHIOJV tenement, ($8M) acquisition of shares and $326M proceeds from sale of PLS shares. 2. Other comprises of purchase of shares under employee share plans ($17M); other non-cash movement in borrowings (
Slide 29: Mining Services FY19 to FY21 Performance
MINING SERVICES FY19 TO FY21 PERFORMANCE Mining Services less Construction EBITDA3 Mining Services production-related contract tonnes1 Mining Services less Construction EBITDA ($M) 160 300 2.5 146 283 140 EBITDA per Tonne ($/wmt) 124 125 250 229 228 2.0 Contract tonnes (Million wmt) 120 110 189 102
Slide 30: Mining Services Key Business Metrics
MINING SERVICES KEY BUSINESS METRICS REVENUE1,2 BY COMMODITY REVENUE1 BY LENGTH OF CONTRACT ≤ 3 yrs 3-5 yrs 5-10 yrs > 10 yrs Iron ore Lithium Gold Construction and Other 1. 1H22 Mining Services segment revenue (external and inter-segment) 2. MRL’s Mining Services contract rates are not linked to co
Slide 31: Commodities Segments
COMMODITIES SEGMENTS Iron Ore Commodities 1H21 1H21 1H21 1H22 1H22 1H22 Segment Revenue Underlying Margin Revenue Underlying Margin • Record exports of 9.9Mt, up 25% due to growth at Utah ($ million) EBITDA EBITDA Point Hub Iron Ore 1,219 582 48% 883 (104) (12%) • Significant decrease in Platts inde
Slide 32: Commodities Utah Point Hub Iron Ore
COMMODITIES UTAH POINT HUB IRON ORE Utah Point Hub 1H20 2H20 FY20 1H21 2H21 FY21 1H22 Exports kwmt • 5.4Mt exported in 1H22, 24% lump. Lower lump proportion is 1,305 1,417 2,723 1,415 1,727 3,142 1,295 due to Wonmunna ore, which has a lower lump to fines ratio, Fe grade % 59.6% 59.2% 59.4% 58.5% 58.
Slide 33: Commodities Yilgarn Hub Iron Ore
COMMODITIES YILGARN HUB IRON ORE Yilgarn Hub 1H20 2H20 FY20 1H21 2H21 FY21 1H22 • 4.4Mt exported in 1H22 with the removal of high cost Exports kwmt 1,135 1,824 2,959 1,874 603 2,477 - tonnes from production in response to the rapid decline in Fe grade % 59.7% 59.2% 59.4% 57.8% 57.5% 57.7% - Platts i
Slide 34: Commodities Iron Ore Realisations
COMMODITIES IRON ORE REALISATIONS 1. Realisation excluding the impact of price adjustments for finalisation of iron ore sales contracts on prior period shipments. 34
Slide 35: Commodities Mt Marion Lithium
COMMODITIES MT MARION LITHIUM • 1H22 spodumene concentrate exports of Mt Marion Lithium 1H20 2H20 FY20 1H21 2H21 FY21 1H22 207kdmt, 55% high grade Exports (at 100%) kdmt 188 206 394 203 282 485 207 • Temporary lower high grade product mix and Weighted High Grade Product contribution % 66% 63% 64% 76
Slide 36: Credit Metrics and Debt Maturity Profile
CREDIT METRICS AND DEBT MATURITY PROFILE CREDIT METRICS FY21 1H22 DEBT MATURITY PROFILE1 Cash and equivalents $1,542M $751M 1,200 Net debt/(cash) ($280M) $582M 1,000 Net gearing (9%) 17% 800 $million Gross gearing 28% 31% 600 400 Net debt/(cash) to Underlying EBITDA2 (0.1x) 0.4x 200 Gross debt to Un
Slide 37: Glossary
GLOSSARY 1H, 2H, FY First half, second half, full year M Million $ Australian dollar Net debt / (cash) Gross debt less cash and cash equivalents US$ United States dollar pcp Prior corresponding period bn Billion ROIC Return on invested capital CAGR Compound annual growth rate T or t Wet metric tonne
Slide 38: 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
Slide 39: Investor Relations
INVESTOR RELATIONS Chris Chong Investor Relations Manager T: +61 8 9315 0213 E: chris.chong@mrl.com.au OFFICE: 1 Sleat Road, Applecross, WA 6153 POSTAL: PO Locked Bag 3, Canning Bridge LPO, Applecross, WA 6153 P +61 8 9329 3600 F +61 8 9329 3601 www.mrl.com.au ASX:MIN 39
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