Mineral Resources : FY26 Q2 Results Call Transcript

About this update from Mineral Resources Limited

CALL: Q2 FY26 Quarterly Activities Report - Analyst Call DATE: Thursday, 29 January 2026 REPRESENTATIVES: Malcolm Bundey , Chair Mark Wilson , Chief Financial Officer Chris Chong , GM Investor Relations Mark Wilson, Chief Financial Officer Thank you, Josh, and good morning, everyone. My name is Mark Wilson. I'm the CFO of Mineral Resources. Joining me in the office this morning is Chris Chong, General Manager Investor Relations, and on the line we have our Chair, Mal Bundey. Conscious it's a very busy day today, so I'll just provide a very brief summary of the quarterly results before we move to questions. This has been another successful quarter for MinRes, with all divisions performing well. The quarter underscored the strengths of the business, with consistent operational performance at Onslow Iron, and the agility to capture opportunities in an improving lithium market. Following strong operational performance in Lithium in the first half, and to take advantage of the improved pricing, we're upgrading our FY26 volume guidance that both Wodgina and Mt Marion as outlined in the release this morning. In the Iron Ore division, Onslow Iron continues to operate at its nameplate capacity, and the development of Lamb Creek is progressing well at the Pilbara Hub, with final exports from Wonmunna scheduled for April. Balance sheet transformation is progressing as planned. Liquidity has strengthened to over $1.4 billion, and net debt is reduced by $500 million to below $4.9 billion. The POSCO Lithium Joint Venture that we announced in November will further accelerate deleveraging. In summary, today's report confirms that we're entering the second half with positive operational momentum, favourable market conditions, and a strengthening balance sheet. With that, I'll hand back to Josh to facilitate questions. Moderator Thank you, Mark. If you have not yet submitted your text question or joined the live audio queue, please do so now. I will introduce each caller by name and ask you to go ahead. You will then hear a beep indicating your microphone is live. Our first question today comes from Rahul Anand from Morgan Stanley. Rahul, please go ahead after the beep. Rahul Anand, Morgan Stanley Hi, good morning, team. Thank you for the call. I've got two questions. First one is on the potential for the Bald Hill restart. I just wanted to perhaps ask the question differently. I mean, bringing that project on versus bringing Train 3 on, what informs that decision to be more tilted towards Bald Hill? And if you can kind of help us understand if you've had any conversations with Albemarle on the potential restart of Train 3. That's the first one, and then I'll come back with a second, thanks. Mark Wilson OK, good morning, Rahul, and thanks for the question. In terms of Bald Hill, what we're doing is we're undertaking a study on that at the moment. So we're just flagging that we're doing that. It's really important that we get ourselves comfortable around the state of the lithium market going forward, just making sure. It's such a volatile commodity, we're just going to be very prudent in our approach to that. In terms of Train 3 at Wodgina, we've been saying for a while that we've been running it opportunistically when we can. That was the case through this last quarter. Over the next half, we'll continue to do that. We don't get the clean feed for a third train until final quarter this calendar year. So we'll continue to run it opportunistically, but the head grade is going to be a bit lower this half, which is why we haven't just simply doubled volume guidance. Rahul Anand Got it. Well noted, thank you. And look, the other one was just around some of the financial statement impacts that you flagged. Pretty clear on the revaluation gain in terms of the bonds, but the $220 million purchase price adjustment on the haul road and gas transactions, can you perhaps help us understand that one a bit more, and then also the RDG assets in terms of the non-cash impairment expense, please? Mark Wilson Sure. So those adjustments on the purchase price flow through the P&L, although they'll come through as non-underlying. In terms of the RDG, what we're saying there is we're just looking for carrying value of that asset, which we'll do over the next couple of weeks as we move to finalise our interim results. It had a carrying value of about $70 million at the half - sorry, at the full year. Moderator Our next question today comes from Kaan Peker from RBC. Kaan, please go ahead after the beep. Kaan Peker, RBC G'day Mark, Chris and Mal. Great result. Two questions from me, one on Onslow. Just looking at capital intensity from here, beyond Ken's Bore and Upper Cane, should we expect Onslow sustaining capex to normalise materially lowering FY27? And then I'll come back with a second one on the Lithium business. Thanks. Mark Wilson Yeah, morning Kaan. Obviously we'll provide guidance for '27 middle of the year. But we've been pretty consistent in terms of where we see capital intensity at that site, around $2 a tonne. So yeah, we don't expect it to change materially in the short term anyway. Kaan Peker Sure, thank you. And then on the Lithium business. With Mt Marion, maybe if you can provide some indication of the recovery uplift with the flotation plant and maybe the underground restart, what are the key gating items for the PFS, and what lithium price environment is required to proceed? Thanks. Mark Wilson Yeah, so we're working through that study at the moment. There's a lot of design work going into the work around the float there at Mt Marion. That work is expected to be complete in the coming months. So we'll have more information on that when we're in position to finalise that work. Moderator Our next question comes from - Mark Wilson Sorry, Kaan, sorry, Josh. I missed the underground piece for Kaan. Similarly, in terms of underground, we've already spent a fair bit of money and done a fair bit of work on that. We need to go back to the Board and ultimately that underground is expected to feed about a third of the feed at the mine. We haven't made a decision to take that back to the Board yet. Moderator Thank you. Our next question comes from Mitch Ryan from Jefferies. Mitch, please go ahead after the beep. Mitch Ryan, Jefferies Morning all. Thanks for taking my question. Just with regards to your POSCO deal, can you please remind us of the effective date of that? i.e. I guess what I'm asking is, is it a cashbox structure that would not see you capturing the full uplift from the current price trend? Mark Wilson Hi, Mitch. Yes, there is no effective date. So we capture the full uplift. Mitch Ryan OK. And then a second question; with the increase in the lithium production guidance, can you provide some guides on associated material movements at Wodgina and Marion? i.e. I guess is there increased capitalised stripping that will come through in this financial year? Mark Wilson I think you can assume that if we move to take advantage of an increase in the prices that we might have a slight increase in stripping costs, but we're not expecting our overall capex guidance to shift, not materially. Moderator Our next question comes from Ben Lyons from Jarden Securities. Ben, please go ahead after the beep. Ben Lyons, Jarden Thank you. G'day, Mark. First one's just on Onslow, please, just on the price realisation. Does that include, like does that absorb the cost of the hedging that was put in place across the whole Iron Ore business, and the delivery into the prepayments, is that all sort of captured in that realised price? Thanks. Mark Wilson Yeah. Good morning, Ben. Nice to talk. Yes, it does. It absorbs all those impacts on the - well, certainly on the hedging. There is no impact on the prepayments because that's done at market. Ben Lyons Yep. Cool. Thank you. And then just quickly on the Lithium business, maybe just interested if you can provide any observations from the commercial team. At present obviously your price realisation was really strong across the December quarter. Just if there's any customers out there who might be prepared to put in place clause-in-contract structures to support like a Bald Hill restart or a third concentrator at Wodgina. Thank you. Mark Wilson Yeah, it's a really interesting question around the market, Ben. It's moving quite quickly. It's volatile. Price is up and then down from day-to-day. As you know, it's not a very sophisticated market in terms of depth. You do have the traders playing a more active role than we might have seen them in years past. And you've got the complexity where you've got not just spodumene, but you've got hydroxide and carbonate with different parties focused on different product needs. So what I'm describing is a complex commodity environment against which to contemplate putting in place any sort of formal structures like that. Not saying it's impossible. I'm just saying it's more complex. Moderator Thank you. Our next question comes from Rob Stein from Macquarie. Rob, please go ahead after the beep. Robert Stein, Macquarie Hi, team. Just a quick one on Bald Hill restart. Can you give us a feel for how the labour force of the business could be remobilised, the speed of that, the cost of that, given obviously one of MIN's competitive advantages is it does have a Mining Services business. So can you just give us a flavour for the speed at which MIN could act there? Mark Wilson G'day, Rob. So just to repeat what I said earlier, we're just doing a study at this stage, but we just wanted to let the market know that. I don't want you to get ahead of yourselves in terms of baking numbers in or anything like that. But to answer your question directly, one of the great strengths of MinRes is our agility and our ability to move people and kit. And if you're a single asset operator in this environment, we've had to respond quickly to price movements. It's much more difficult for those guys than it is for us. Having said that, there's still a huge amount of work that would have to be done to mobilise and get that plant going again. And Chris is on record saying that could be up to four months, if and when we make that decision. Robert Stein Perfect. And then just, sorry, speaking about the Mining Services business more broadly, in the current iron ore market, things are obviously pretty resilient. There's been a few production issues globally. How are you seeing demand for your services, crushing plants specifically, across different regions? Obviously, there's been speculation that that's occurred in Brazil in the past, that there's been inbound interest, but has that matured at all? Mark Wilson I think I'll repeat what I've said previously. Onslow is a wonderful credential for this business across all aspects of the mining services, not just the crushing. Clients come to us because we deliver. We deliver month after month, and you can assume that we're regularly fielding inbound inquiries from all sorts of clients, existing and new. So they're conversations that are ongoing. These things take time to come to maturity. They don't happen overnight. But yes, you should assume that we're very happy with the level of inquiry we've got. Moderator Our next question comes from Matthew Frydman from MST Financial. Matthew, please go ahead after the beep. Matthew Frydman, MST Financial Sure, thanks. Good morning, Mark and team. Two from me, please, thanks. Firstly, on the lithium guidance. I'm just trying to get a sense of, I guess, how much conservatism is built into that, as it does imply that the volumes of both assets are going to be softer in the second half. I mean, at Wodgina, you already spoke about the lower grade being the driver there. But maybe looking at Mt Marion specifically, my recollection is the installed capacity there is about 600,000 tonnes per annum, SC6 equivalent. You're saying in the second half, it's probably going to be running at about half that rate. So is 600 still the right number without a float plant? And I guess, what's the timing to get back up to that level of production? Thanks. Mark Wilson Matt, hi. The answer with Mt Marion is that we operate out of different pits there. We cycle through those pits. We've had the benefit of working for some time now out of the central pits, which have higher grade and they go through the plant, the ore goes through the plant more effectively. So the recoveries are up out of those pits. And we've used the cycling through these pits to help us manage our capital needs as well over the last 12 plus months. We're now coming to the end of that central pit, a particular part of it anyway, and moving back into the northern pits, where we have higher strip and lower recoveries with more complex auditing. So that's why we're softer on our guidance for Mt Marion. As you said, for Wodgina, we have lower head grade basically. The guys at the site there have done an incredible job. I just want to call out, they've taken recoveries up to 70% on average for the quarter, done an incredible job through a whole range of initiatives. But again, this half, we're expecting it to be a little bit softer because of the head grade. Matthew Frydman OK. Thanks, Mark. I understand. And then secondly, on Onslow shipments, obviously flat quarter-on-quarter running at about a 35 million tonne per annum rate annualised. But you did call out that you had some transhipper maintenance program that you implemented, and also some downtime. I'm just wondering, what's the cycle of that maintenance program? Is that a quarterly or six-monthly period of downtime that you now expect going forward? And now that all of them are back online, as you say, towards the end of December, are you pushing above that 35 million tonne rate at the moment? Thanks. Mark Wilson Yes, so the current quarter is the most challenging in terms of weather, and we're seeing that this week. We've had a couple of days where we've been impacted by high swell and wind, which is what we expect. We plan for that. We allow for 55 days a year for downtime in one form or another. In terms of the maintenance programs and so on, one of the things we've talked about previously is getting a sixth transhipper into the fleet, which we expect to have up and running by the middle of this year. And then the seventh transhipper early into the new financial year, which will give us cover to be able to roll through that maintenance program and smooth out what is a little bit lumpy at the moment. We're regularly doing maintenance on these vessels, it's just it's par for the course. We just wanted to call it out because it had more of an impact in the quarter than it has previously. Moderator Our next question comes from Paul Young from Goldman Sachs. Paul, please go ahead after the beep. Paul Young, Goldman Sachs Morning, Mark. Hope you're well. Probably more of the same sort of question just on Onslow, though, just on shipments performance and just the mines performance and tracking performance. You've had a couple of weeks in January that you're actually, I think, north of 35. So it looks like it's performing pretty well. Do you have any comments you can share with us or info around just how your trucks are performing from speed, maintenance, and just testing the bottlenecks along from the mine to the port? Because from the site visit, it was pretty clear that the bottlenecks only sort of kick around that sort of high 30 mark. Just some additional colour on how that's all going, thanks. Mark Wilson G'day, Paul. Nice to talk. Very, very happy with the way each part of that operation is performing from the mine. The strip's still low. The mine's performing well, going through the crushing well. Stockpiles are healthy at the site, at the mine end. The haulage is going very well. No constraints on speed. The road's performing well. We're getting it into the port. So it's actually all running as we would expect, I'm very happy. You're absolutely right that one of the things that we are focused on, laser focused on, is how do we keep squeezing every tonne out of each day. We're looking at the way that we maintain each of these assets, the cycle times on that maintenance program, all those sorts of things. Today, the transhippers remain the bottleneck. That's why we're bringing the fifth - sorry, the sixth and seventh transhippers on later this year as we push towards 40. Paul Young Yeah, makes sense. Thanks, Mark. And then just on costs, you said you achieved 52 for the half and I probably presume a lot lower for the December quarter. I know that's partly denominator, but is there anything you can call out on anything else where you're happy with the cost performance, whether it be on just diesel or any other parts of the cost, considering the risk now is actually to the downside on your cost guidance? Mark Wilson Yes, again, we're very, very happy with costs. I mean, I got asked about this a while ago and I said that I felt that we had a pretty good grip on where our costs sat, and I think this quarter has shown that. We're guiding to the low end of guidance. In the second half, we're assuming slightly lower shipped tonnes, and we're also assuming some rise and fall impacts as we move into the new calendar year. But yeah, very, very happy with where the costs are across the board. Moderator Our next question comes from Lachlan Shaw from UBS. Lachlan, please go ahead after the beep. Lachlan Shaw, UBS Yeah, morning, Mark and team. Thanks very much for the update. Two on lithium. So firstly, congratulations in being able to comfortably lift guidance. I wanted to ask, the strong performance in the first half, is that more just really getting on top of things from an underlying operational point of view, or is part of that a response to market? And then I'll come back with my second question. Mark Wilson G'day, Lachlan. Yes, as I said earlier, we're really squeezing hard at Wodgina on the recovery side. So we've lifted that up to average that 70% and now we're pushing to go higher. So that's improved performance at the site, and very happy how that sets us up going forward with that asset. In terms of Marion, we've had the benefit of better feed stock effectively, which has gone through the plant well. We have been able to run the third train at Wodgina opportunistically, probably more than we'd expected, which has helped provide those extra tonnes in the quarter. But yes, very happy with the way each of those assets are set up. Lachlan Shaw Great, thanks. And then the second question was actually on Wodgina third train. Previously you've talked to ideally - or thinking about getting the stripping there into place and perhaps sustainable freight train operations from late calendar '26. And I think you've also kind of highlighted that you could perhaps go a little earlier, but there's a potential trade-off there in terms of recovery, given the quality of raw feed. How's that sort of trade-off and thinking evolving at the moment? And I suppose also just in terms of the transaction, POSCO coming in upon successful completion subject to regs in mid-year, how's all that piece coming together around sustained three-train operations at Wodgina? Thanks. Mark Wilson Yeah, so we're continuing to operate that asset in partnership with Albemarle. I mean, we're operating it, but that JV's functioning very well. We're pushing to use the third train where we can, and we factored that into our increased guidance for this path, or for the balance of this year. The truth of it is, as I said, we still can't get to that clean ore until this fourth quarter. It might be a little bit earlier, but it'll be at the end of that quarter, not into Q3, I wouldn't have thought, just because of the logistics and the shape of the ore body. So we'll keep pushing as best we can with the three trains running from time - the third train running from time to time, and that allows us to put the guidance where we've put it. Moderator Just a quick reminder of the instructions before we move on. To ask a text question, select the messaging icon, type your question in the box towards the top of the screen and press the send button. To ask a live audio question, press the request to speak button at the top of the broadcast window and follow the instructions. If you are already on the audio line, you can rejoin the queue by dialling star. If you have any issues, dialling details can also be found on the homepage under "asking audio questions." Our next question comes from Mitch Ryan from Jeffreys. Mitch, please go ahead. Mitch, you are live again for your second round question? We'll just give Mitch one more second if he's still there. As we are not hearing from Mitch, we will wrap up there. There are no further questions in the queue, so that does conclude today's call. Please reach out to the MinRes team if you have any follow-up questions. You may now disconnect. **END OF RECORDING**

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