Mineral Resources Limited · ASX:MIN
Mineral Resources — H1 FY2024 Earnings Presentation
47 slides from Mineral Resources's earnings presentation, Feb 22, 2024
Slide 1: FY24 Half Year Results
FY24 HALF YEAR RESULTS 2 1 F e b r u ary 2 0 2 4 ASXMIN
Slide 2: Disclaimer and Important Notices
DISCLAIMER AND IMPORTANT NOTICES This presentation should not be considered as an offer or invitation to subscribe for or purchase any securities in Mineral Resources Limited and its subsidiaries (“MinRes” or “Company”) or as an inducement to make an offer or invitation with respect to those securit
Slide 3: Contents
CONTENTS 1H24 OVERVIEW 4 PEOPLE AND SAFETY 5 1H24 OPERATIONAL SUMMARY 7 1H24 FINANCIAL PERFORMANCE 9 FUTURE GROWTH 19 Q&A 34 APPENDIX 35
Slide 4: 1H24 Overview
1H24 OVERVIEW • • 5 new contracts, 3 renewals with Tier 1 clients First haulage contract in Queensland Mining Services • On track to double business REVENUE $2.51bn 7% pcp Engineering & Construction • Strong progress at Onslow Iron UNDERLYING • On budget and on track for first ore-on-ship in June 20
Slide 5: 1H24 People and Safety
Total Recordable Injury Frequency Rate Per million hours worked 1H24 PEOPLE AND SAFETY 4.50 1.90 TOTAL RECORDABLE 4.00 INJURY FREQUENCY RATE1 3.50 3.00 2.50 0.18 LOST TIME INJURY FREQUENCY RATE1 2.00 1.50 7,200+ PEOPLE 1.00 0.50 0.00 23.3% FEMALE PARTICIPATION FY19 FY20 FY21 FY22 FY23 1H24 1. 12-mon
Slide 6: 1H24 Sustainability
1H24 SUSTAINABILITY OPERATIONAL CARBON 3.0 INTENSITY (tCO2e/TMM) STABLE 1,192 RENEWABLE ENERGY GENERATION (MWh) 196% INCREASE PCP 1,445 ENVIRONMENTAL INSPECTIONS COMPLETED $24.2M INDIGENOUS PROCUREMENT SPEND FY24 HALF YEAR RESULTS | 6
Slide 7: 1H24 Operational Summary
1H24 OPERATIONAL SUMMARY MINING SERVICES IRON ORE PRODUCTION • 3.8Mt shipped – up 5% pcp • 139Mt – steady YILGARN HUB VOLUME • FOB $109/wmt • $254M – in line with pcp • 5.0Mt shipped – down 2% pcp EBITDA PILBARA HUB • EBITDA/t of $1.89 • FOB $74/wmt • Mining rates advancing • 5 new contracts • Haul
Slide 8: 1H24 Operational Summary
1H24 OPERATIONAL SUMMARY LITHIUM ENERGY • Shipped 150kdmt SC4.0 – up 33% • Third successful well in Perth Basin • FOB Cost $548/dmt (Lockyer-3) MT MARION PERTH BASIN • Plant expansion completed • Drilling fourth production well • Underground exploration decline approved (Lockyer-5) • Shipped 90kdmt
Slide 9: Financial Performance
FY24 HALF YEAR RESULTS FINANCIAL PERFORMANCE
Slide 10: 1H24 Underlying Profit and Loss
UNDERLYING PROFIT AND LOSS ($M) 1H23 1H24 VARIANCE VARIANCE % 1H24 UNDERLYING Revenue 2,350 2,515 165 7% PROFIT AND LOSS Operating costs (1,411) (1,840) (429) Underlying EBITDA 939 675 (264) (28%) $2.5bn REVENUE 7% pcp Margin (%) 40% 27% (13%) D&A (258) (254) 4 UNDERLYING Underlying EBIT 681 421 (26
Slide 11: 1H24 Underlying EBITDA
1H24 UNDERLYING EBITDA Commentary 1H23 Underlying EBITDA 939 Spodumene volume and FOB Cost 123 Increased volumes shipped and lower Mt Marion FOB Cost Controllable Battery chemicals volume and cost 108 Increased volumes of LBC sold and lower spodumene feed costs from Wodgina Iron Ore volume and FOB C
Slide 12: 1H24 Cash Flow
1H24 CASH FLOW CASH FLOW ($M) 1H23 1H24 VARIANCE Underlying EBITDA 939 675 (264) • Strong working capital management continues – Movement on working capital1 (380) 173 553 cash conversion of 126% Operating cash flow before financing and tax 559 848 289 • Strategic investments including Net interest
Slide 13: 1H24 Capital Expenditure
1H24 CAPITAL EXPENDITURE RESOURCE DEVELOPMENT CAPEX ($M) GROWTH SUSTAINING 1H24 COMMENTS AND EXPLORATION Sustaining includes deferred strip of $128M to open up Lithium 94 194 28 316 each mine. Growth includes Wodgina development mobile fleet Iron Ore excluding 16 147 21 184 Sustaining includes defer
Slide 14: 1H24 Summary Balance Sheet
1H24 SUMMARY BALANCE SHEET ($M) FY23 1H24 VARIANCE BALANCE SHEET Inventories Trade and other receivables 606 658 708 700 102 42 Trade and other payables (892) (1,170) (278) $1.4bn CASH Other (146) (408) (262) Net working capital 226 (170) (396) Non-current receivables 70 53 (17) $7.5bn CAPITAL EMPLO
Slide 15: 1H24 Net Debt Waterfall
1H24 NET DEBT WATERFALL 1,000 - 173 (126) (1,000) 675 (71) Exploration (109) Sustaining (367) $ million (2,000) (1,855) Growth (1,000) (3,000) (133) 588 (39) (3,547) (4,000) (1,285) (5,000) Net Debt FY23 Underlying Working Net interest Tax paid Capex Dividends Net Proceeds from Other 1 Net Debt 1H24
Slide 16: Credit Metrics and Debt Maturity Profile
CREDIT METRICS DEBT MATURITY PROFILE1 AND DEBT MATURITY PROFILE 2.5 2.0 CREDIT METRICS FY23 1H24 $billion Cash $1.4bn $1.4bn 1.5 Net debt $1.9bn $3.5bn 1.0 Net debt to Underlying EBITDA2 1.1x 2.4x 0.5 Underlying EBITDA to interest expense2,3 6.6x 5.2x 0.0 Net debt/Enterprise Value4 12% 21% 2024 2025
Slide 17: FY24 Guidance
FY24 GUIDANCE IRON ORE LITHIUM YILGARN HUB PILBARA HUB MT MARION WODGINA MinRes share 100% 100% 50% 50%1 100%2 Iron ore Iron ore Spodumene Spodumene Lithium battery Product 25% Lump 15% Lump Grade 3.8% Grade 5.5% chemicals Volume 190 to 220kdmt 210 to 240kdmt 7.5 to 8.3Mt 9.0 to 10.5Mt 18 to 23kt (M
Slide 18: FY24 Capex Guidance
FY24 CAPEX GUIDANCE RESOURCE DEVELOPMENT CAPEX ($M) GROWTH SUSTAINING FY24 COMMENTS AND EXPLORATION Lithium 200 280 64 544 Sustaining includes deferred strip of $216M Iron Ore excluding Onslow Iron 26 265 40 331 Sustaining includes deferred strip of $190M Iron Ore – Onslow Iron 1,995 - - 1,995 On bu
Slide 19: Focused on Delivery
FY24 HALF YEAR RESULTS FOCUSED ON DELIVERY
Slide 20: Hallmarks of Industry Leaders
HALLMARKS OF INDUSTRY FIVE-YEAR SHARE PRICE PERFORMANCE 700 LEADERS 600 480% CUSTOMER FOCUSED • Long term relationships • Strong industry 500 partnerships 400% INNOVATIVE AND AGILE 400 • Proprietary products 330% • In-house build, own and operate capability 300 FOUNDER LED 290% 200 • 30+ years indus
Slide 21: Mining Services Innovation and Delivery
MINING SERVICES INNOVATION AND DELIVERY LEADING OUR INDUSTRY WITH A UNIQUE BUILD, OWN, OPERATE INFRASTRUCTURE MODEL PEOPLE LOGISTICS RESORT-STYLE FACILITIES CRUSHING & PROCESSING TRANSPORT INNOVATION Airport ownership and Redefining on-site FIFO NextGen technology Jumbo road trains management experi
Slide 22: Mining Services Growth Potential
MINING SERVICES GROWTH POTENTIAL FOUNDATION OF OUR BUSINESS AND DRIVING STRONG GROWTH 1,000 ORDER BOOK BY CONTRACT LENGTH 900 1.95 1.97 800 1.84 1.77 1.70 Contract tonnes (M wmt)1 EBITDA per Tonne ($/wmt) 700 600 500 400 300 200 100 0 FY19 FY20 FY21 FY22 FY23 FY24e FY25e FY26e FY27e FY28e EBITDA per
Slide 23: In-House Design, Engineering and Construction
IN-HOUSE DESIGN, ENGINEERING AND CONSTRUCTION WORKFORCE ENGINEERING AND CONSTRUCTION 4,000 Future projects 3,500 EMBEDDED EXPERIENCE AND CAPABILITY SUPPORTING OUR SIGNIFICANT GROWTH 3,000 Onslow Iron 2,500 development 25+ years’ in-house experience supporting future growth 2,000 Mt Marion 1,500 Wodg
Slide 24: Onslow Iron On Schedule
Map area WESTERN AUSTRALIA Perth ONSLOW IRON ON SCHEDULE Ashburton Port UNLOCKING 6BT OF STRANDED IRON ORE IN THE WEST PILBARA REGION Cochrane Jewel Trixie West Red Hill Creek West 35Mtpa (wet) Offtake Ken’s Bore Target Stage 1 Red Hill 50%-75% of MinRes Creek throughput share with Baowu Cardo Bore
Slide 25: Onslow Cashflow – Stage 1 (35Mtpa)
ONSLOW CASHFLOW – STAGE 1 (35MTPA) MINE CO $1.9bn $1.3bn 60.3% MinRes1 EBITDA2 Capex Mining Services and Access MINING SERVICES $280M Charges for MineCo 100% MinRes EBITDA3 $1.7bn Capex 49% partnership ACCESS CHARGE $281M sale process 100% MinRes EBITDA4 under way Indicative MinRes EBITDA MinRes Net
Slide 26: Iron Ore Projects Under Development
IRON ORE PROJECTS UNDER DEVELOPMENT Guinea WA Magnetite Onslow Iron Project1 Project1 ENGINEERING AND CONSTRUCTION MinRes Outsourced Outsourced CAPACITY 35Mt 120Mt 20Mt CAPITAL INTENSITY US$56/t US$193/t US$183/t Lowest capital intensity CONSTRUCTION TIME TO FIRST ORE 19 months 4 years 4 years Half
Slide 27: Iron Ore Price Outlook
IRON ORE PRICE OUTLOOK CONSENSUS ESTIMATES HAVE CONSISTENTLY UNDERESTIMATED ONSLOW MINRES 60.3% MINECO THE IRON ORE PRICE OUTLOOK EBITDA SENSITIVITY (A$M)2 Broker Range Prior Broker Consensus Highly cash generative 1,928 even at prices Wood Mackenzie Current Broker Consensus significantly below Spot
Slide 28: Growing Our Lithium Portfolio
GROWING OUR LITHIUM PORTFOLIO RAMPING UP PRODUCTION ACROSS THREE WORLD-CLASS HARD ROCK MINES WHILE MAINTAINING STRONG PARTNERSHIPS WITH LEADERS IN THE SUPPLY OF BATTERY-GRADE LITHIUM PRODUCTS WODGINA | MT MARION | BALD HILL | Ownership 50% MinRes Ownership 50% MinRes Ownership 100% MinRes Current Cu
Slide 29: Mt Marion Underground
MT MARION Mt Marion long section A – A’ +/- 1000m Conceptual interpretation – January 2024 UNDERGROUND UNDERGROUND PRODUCTION PLANNED TO COMMENCE IN 2025 Possible second sub-vertical feeder Stage 1 includes box- cut, portal installation, exploration decline and NE feeder fault zone diamond drilling
Slide 30: Significant MinRes Attributable Lithium Growth Potential
SIGNIFICANT MINRES ATTRIBUTABLE LITHIUM LITHIUM GROWTH 1600 POTENTIAL1 1400 MARKET LEADER Largest Australian-owned producer 1200 of spodumene concentrate SC6.0 equivalent (kdmt) 1000 800 GROWING OUTPUT Attributable production of 1Mtpa+ in three years via projects now under way 600 400 TOTAL OFFTAKE
Slide 31: Natural Gas Development Timeline
NATURAL GAS DEVELOPMENT TIMELINE Indicative, subject to approvals and rig availability PERTH BASIN ~7,300km2 in tenements – 4 production wells to be completed – quality clean gas (3% CO2) 2H24 FY25 FY26 2 WELLS (Red Gully) Up to 250TJ/day plant 2 WELLS (Lockyer) 5 WELLS (Lockyer) FID expected FY24 2
Slide 32: Business Outlook
BUSINESS OUTLOOK MINING SERVICES LITHIUM IRON ORE ENERGY Improving margins and growing volumes Significantly increasing volumes in the Transition to low-cost, long-life iron Providing energy security and through high-quality, long-life projects near-term with modest capital required ore operations v
Slide 33: Structured for Success
STRUCTURED FOR SUCCESS OPERATIONAL EXCELLENCE • World class assets and ethical operations • Track record for successful end-to-end project delivery DISCIPLINED CAPITAL ALLOCATION • High capital returns proven over decades • Pipeline of high-quality, long-life projects VALUE AND RETURNS • Track recor
Slide 34: Questions?
FY24 HALF YEAR RESULTS QUESTIONS?
Slide 35: Appendix
FY24 HALF YEAR RESULTS APPENDIX
Slide 36: 1H24 Reconciliation of Non-IFRS Information
1H24 RECONCILIATION OF NON-IFRS INFORMATION RECONCILIATION OF NON-IFRS FINANCIAL INFORMATION ($ M) (1) 1H23 2H23 FY23 1H24 Total Revenue 2,350 2,429 4,779 2,515 Underlying EBITDA 939 815 1,754 675 D&A (258) (192) (450) (254) Underlying EBIT 681 623 1,304 421 Interest income 18 21 39 29 Finance costs
Slide 37: 1H24 Operating Segments
1H24 OPERATING 1H23 1H23 1H23 1H24 1H24 1H24 OPERATING SEGMENTS Underlying Underlying Revenue Margin Revenue Margin ($ M) EBITDA EBITDA SEGMENTS Mining Services1,2 1,188 255 21% 1,452 254 17% • Mining Services revenue growth Iron Ore3 973 37 4% 1,329 266 20% driven by increased activity on internal
Slide 38: Mining Services Performance
MINING SERVICES PERFORMANCE Mining Services production-related contract tonnes1 160 2.4 146 138 139 2.2 140 125 128 2.0 124 EBITDA per Tonne ($/wmt) Contract tonnes (M wmt) 120 110 110 1.8 100 1.6 100 1.4 80 70 1.2 57 1.0 60 0.8 40 0.6 0.4 20 0.2 - - 1H19 2H19 1H20 2H20 1H21 2H21 1H22 2H22 1H23 2H23
Slide 39: Mining Services Key Business Metrics
MINING SERVICES KEY BUSINESS METRICS REVENUE1,2 BY COMMODITY Iron ore Lithium Gold Construction and Other 1. 1H24 Mining Services segment revenue (external and inter-segment). 2. MinRes’ Mining Services contract rates are not linked to commodity prices. There are no commodity price FY24 HALF YEAR RE
Slide 40: Iron Ore Pilbara Hub
IRON ORE PILBARA HUB (100% attributable basis, unless otherwise UNITS 1H23 2H23 FY23 1H24 PILBARA HUB indicated) TMM Mwmt 19.6 19.7 39.3 21.4 • 5.0Mt exported in 1H24, 18% Ore Mined kwmt 5,394 5,274 10,668 5,277 lump Produced kwmt 6,212 5,425 11,637 5,307 • Strong Platts index and Shipped kwmt 5,098
Slide 41: Iron Ore Yilgarn Hub
YILGARN HUB (100% attributable basis, unless otherwise UNITS 1H23 2H23 FY23 1H24 IRON ORE YILGARN HUB indicated) TMM Mwmt 20.5 17.3 37.8 16.4 Ore Mined kwmt 3,883 4,102 7,985 3,673 • 3.8Mt exported in 1H24, 29% Produced kwmt 4,182 4,052 8,234 3,956 lump Shipped kwmt 3,588 4,068 7,656 3,758 • Strong
Slide 42: Mt Marion
LITHIUM MT MARION1 UNITS 1H23 2H23 FY23 1H24 MT MARION (50% attributable basis, unless otherwise indicated) TMM (100% basis) Mwmt 23.8 21.8 45.6 24.6 SPODUMENE Produced kdmt 115 119 234 147 CONCENTRATE Shipped – SC6 equivalent kdmt 71 78 149 99 • Produced tonnes higher with Shipped kdmt 113 123 236
Slide 43: Wodgina
WODGINA1 UNITS 1H23 2H23 FY23 1H24 LITHIUM WODGINA (50% attributable basis from 18 October 2023, unless otherwise indicated) TMM (100% basis) Mwmt 4.6 7.6 12.2 24.2 SPODUMENE Produced kdmt 62 86 148 101 CONCENTRATE Shipped - total - SC6 equivalent kdmt 64 79 143 87 Total Spodumene Total Spodumene Sh
Slide 44: Lithium Wodgina Battery Chemicals
LITHIUM WODGINA1 Units 1H23 2H23 FY23 1H24 WODGINA (Attributable basis, unless otherwise indicated) LITHIUM BATTERY Conversion rate x 7.4 7.6 7.5 7.7 CHEMICALS Produced t 4,027 7,470 11,497 11,592 Sold t 2,290 4,996 7,286 10,747 Lithium battery chemicals Revenue (excluding VAT) US$/t 51,209 50,811 5
Slide 45: Conservatively Geared Through Cycles
CONSERVATIVELY GEARED THROUGH CYCLES Wodgina Lithium 2.4x 100% 2.1x Onslow 80% Iron 60% 1.1x 0.8x 40% 0.7x 0.4x 20% (0.7x) 0% (0.0x) (0.1x) (0.2x) (0.1x) (0.3x) (0.3x) -20% (0.4x) (0.9x) -40% -60% FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 1H24 Net debt/(cash) to Underlyin
Slide 46: 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 (LBC) US$ United States dollar LTIFR Lost time injury frequency rate as a 12-month rolling average bn Billion M Million CAGR Co
Slide 47: Office
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