Mineral Resources Limited · ASX:MIN
Mineral Resources — JP Morgan Global High Yield Conference 2023
28 slides from Mineral Resources's conference presentation, Mar 7, 2023
Slide 1: Global High Yield Conference JP Morgan
GLOBAL HIGH YIELD CONFERENCE JP MORGAN 7 MARCH 2023 ASX:MIN
Slide 2: Contents
CONTENTS OUR STORY 03 BUSINESS PILLARS 04 RECENT MILESTONES 05 SAFETY AND SUSTAINABILITY 10 FINANCIAL OVERVIEW 11 FUTURE DIRECTION 17 DELIVERING ON OUR COMMITMENTS 22 GLOBAL HIGH YIELD CONFERENCE JP MORGAN | 2
Slide 3: An Australian Success Story
AN AUSTRALIAN SUCCESS STORY • Founded 31 years ago • ASX listed in 2006 with A$100 million market cap • Now operate across diverse commodity and business streams • Today a A$16 billion1 business • 35% compound annual growth in total shareholder returns since listing 1. Market capitalisation at close
Slide 4: Business Pillars
BUSINESS PILLARS Mining Services • World’s largest crushing contractor • Leading pit-to-port mining services provider Iron Ore • Australian top five iron ore producer • Focus on low-cost, long-life projects Lithium • Leading miner and chemical supplier • Exposure to three of the world’s largest hard
Slide 5: Recent Milestones: NextGen3 crushers, road trains, transhippers
RECENT MILESTONES NextGen3 crushers • Proprietary ore crushing technology • Low-cost modular design • Rapid construction and deployment Jumbo road trains • Deliver commodities from mine to coast • Comparable to rail with reduced capital investment • Unlocking stranded deposits Transhippers • Low cap
Slide 6: Recent Milestones: Onslow Iron FID and Port Hedland agreement
RECENT MILESTONES Final Investment Decision: Onslow Iron • Agreement with Baowu, AMCI, Posco • Stage 1: 35Mtpa nameplate capacity • 30+ year life – construction commenced Port and rail agreement with Hancock Prospecting • Awarded last cape carrier berth at Port Hedland harbour • Binding agreement wi
Slide 7: Recent Milestones: Albemarle JV restructure and Mt Marion upgrades
RECENT MILESTONES Restructured Albemarle joint venture • Multiple agreements covering asset ownership, downstream conversion capacity and marketing ownership Commenced Mt Marion site upgrades • Doubling production capacity to 900ktpa (mixed grade) • Extended tolling arrangement with Ganfeng Arrival
Slide 8: Recent Milestones: Onshore gas discovery
RECENT MILESTONES Potentially the largest onshore gas discovery in Australia • Largest landholder in two of Australia’s most prospective regions • Reviewing opportunities to develop multiple downstream commodities • Lowest cost gas quartile GLOBAL HIGH YIELD CONFERENCE JP MORGAN | 8
Slide 9: Integrated Lithium Chemicals Producer
INTEGRATED LITHIUM CHEMICALS PRODUCER WORLD CLASS CAPITAL EFFICIENT CONTROL OF HIGH GROWTH UPSTREAM ASSETS CONVERSION CAPACITY PRODUCT MARKETING END USER MARKET2 (Spodumene concentrate) (Lithium battery chemicals) MT MARION GANFENG TOLLING ELECTRIC VEHICLES (50%) (51%)1 1.39Mt LCE 0.39Mt LCE MARBL J
Slide 10: Safety and Sustainability
SAFETY AND 0 Lost Time Injury Frequency Rates 0 Lost Time Injury Frequency SUSTAINABILITY Rates (LTIFR) (LTIFR) 2.81 Total Recordable Injury INJURY FREQUENCY RATES Frequency Rate (TRIFR) (INJURIES PER MILLION HOURS WORKED) 10.00 1.00 8.00 0.80 200+ Accredited Mental Health First Aiders TARGET 50% 6.
Slide 11: Financial Overview
FINANCIAL OVERVIEW
Slide 12: Revenue and Underlying EBITDA
REVENUE AND UNDERLYING EBITDA Revenue (A$M) Underlying EBITDA (A$M) 2,500.0 60% 4,415 1,901 1,807 3,734 2,000.0 50% 3,418 CAGR = 36% 51% 1,500.0 36% 40% 1,024 41% 2,125 29% 1,000.0 765 1,512 30% 30% 500.0 433 20% 0.0 10% FY19 FY20 FY21 FY22 CY22 FY19 FY20 FY21 FY22 CY22 Mining Services Iron Ore Lith
Slide 13: Free Cash Flow Generation
FREE CASH FLOW GENERATION Capex (A$M) Operating Cash Flow Cumulative Free Cash (A$M) Flow (A$M) 69 1,278 478 903 518 501 735 29 1,572 248 182 452 417 113 120 644 749 661 39 89 114 140 120 350 36 54 -163 FY19 FY20 FY21 FY22 1H23 -404 -380 FY19 FY20 FY21 FY22 1H23 Movt Working Capital Sustaining Defer
Slide 14: 1H23 Summary Balance Sheet
1H23 SUMMARY BALANCE SHEET Debt Maturity Profile (A$M)3,4 CREDIT METRICS FY22 1H23 Cash & equivalents A$2.4bn A$1.7bn 923 Total assets A$7.6bn A$8.2bn Debt A$3.1bn A$3.1bn Total liabilities A$4.3bn A$4.7bn 1,033 923 Total equity A$3.3bn A$3.5bn 400 Net debt A$0.7bn A$1.4bn 2023 2024 2025 2026 2027 2
Slide 15: Conservatively Geared Through Cycles
CONSERVATIVELY GEARED THROUGH CYCLES Gross and Net Leverage Gross debt / Underlying EBITDA Net debt / Underlying EBITDA 3.1 2.7 2.1 1.7 1.7 0.8 0.7 0.7 0.8 0.6 0.5 0.3 0.0 -0.1 -0.2 -0.3 -0.4 -0.7 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 1H23 GLOBAL HIGH YIELD CONFERENCE JP MORGAN | 15
Slide 16: FY23 Capex Guidance
FY23 CAPEX GUIDANCE CAPEX (A$ BILLION) GROWTH SUSTAINING EXPLORATION FY23 Lithium 0.7 0.1 - 0.8 Iron Ore – Onslow Iron 1.1 - - 1.1 Other 0.1 0.2 0.1 0.4 Total Capex 1.9 0.3 0.1 2.3 GLOBAL HIGH YIELD CONFERENCE JP MORGAN | 16
Slide 17: Future Direction
FUTURE DIRECTION
Slide 18: 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) Next Gen Crush i n g Jumb o Roa d Tra i n s 500 Domestic and Wodgina international 400 4-trains third-party 9Mwmt projects 300 Ons
Slide 19: Onslow Iron Growth
IRON ORE ONSLOW IRON GROWTH PROJECT Long-life, low-cost projects 100 Iron ore shipments (100% basis) 90 80 Offtake 35Mtpa 70 50% - 75% with Baowu stage 1 capacity 60 50 $3bn 30+ years 40 total capital ONSLOW IRON1 – FOB Cost $40/t expenditure mine life 30 20 UTAH POINT – FOB Cost $70/t2 Resort style
Slide 20: Gas and Our Energy Transition
GAS AND OUR ENERGY TRANSITION ONSHORE EXPLORATION: DEVELOPMENT TIMELINE1 FY23 FY24 FY25 PERTH BASIN Planned Two wells Three wells production LOCKYER-DEEP PERTH BASIN Planned One well production RED GULLY CARNARVON Two wells BASIN 1. Indicative – subject to approvals.
Slide 21: A Leader in Lithium
A LEADER DOUBLING LITHIUM CHEMICAL CAPACITY FROM OUR TIER 1 RESOURCES IN LITHIUM OVER THE NEXT FIVE YEARS Capacity, ktpa lithium hydroxide (attributable share)1 MT MARION 120 MinRes and Ganfeng 50/50 JV – MinRes operator • Doubling production capacity to 900ktpa (mixed grade) • All MinRes spodumene
Slide 22: Delivering on Our Commitments
DELIVERING ON OUR COMMITMENTS
Slide 23: Delivering on Our Commitments
DELIVERING ON OUR COMMITMENTS WHAT WE SAID1 WHAT WE DID Conservative • Rigorous capital management • Announced minimum investment hurdle 20% ROIC2; financial policies recorded 1H23 ROIC of 25%2 • Long-term target of gross leverage < 2.0x and balance sheet • 1H23 net leverage 0.8x; gross leverage
Slide 24: Key Takeaways
KEY TAKEAWAYS • Strong track record of operational performance • Core, stable base of Mining Services cash flow • Proven iron ore operator driving low cost, long-life projects to underpin growth • Evolved into one of the world’s largest fully- integrated lithium battery chemicals suppliers • Committ
Slide 25: Questions?
QUESTIONS? XO HsouRces
Slide 26: Glossary of Terms
GLOSSARY OF TERMS 1H, 2H, FY, CY First half, second half, full year, calendar year LTIFR Lost time injury frequency rate Australian dollar M Million United States dollar Net debt / (cash) Gross debt less cash and cash equivalents Billion pcp Prior corresponding period Compound annual growth rate Spo
Slide 27: Treasury contact
TREASURY Nigel Land General Manager Treasury T: +61 8 9329 3609 E: nigel.land@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 ASX:MIN
Slide 28: 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”
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