A good week for Iron ore. Staying around that $100 range. Much...

A good week for Iron ore. Staying around that $100 range.

Much has been said about MinRes' s Balance Sheet and Debt in last 2 days. To be fair, Chris invited this and he deserves some heat, as he has been harsh and rude with the sell side analysts over last 2 years who politely raised their concerns around risk. Its the revenge of the Analysts. Having said that the pendulum has swung far too much to the left now and the stock trading at $40 is pricing in doom and gloom scenario which is also not justified. Mining services division (which is underpinned by stable long term contracts) is on track to generate a $1billion Ebitda in FY26. So the current market cap is 8 times of that division.

MinRes is not going anywhere. The kind of bench strength they have in construction and engineering could navigate the ramp up of onslow albeit with a couple million tonnes here and there. Slow yes, but at $40 market is assuming Onslow is write off. Fck that. If BaoWu was allowed by FIRB they will take it tomorrow for a couple of billion cash plus a 50 year mining services contract for US$10 per tonne. ( US 350 million every year for 50 years)

Iron ore market is north of 2000 million tonnes per annum. With high cost yilgarn tonnes coming out and low cost Onslow tonnes going into the market the overall balance is not impacted much. There are a whole lot of iron ore producers that sit to the right of Onslow (even if we increase the cost by 20%). If the price goes below $90 the supply will start leaving the market.


Lastly, lithium. The lithium market has already turned. In my view we have already seen the bottom and there will be slow and steady recovery from here to 90k-100K range where the equilibrium is in for teh short term untill more demand come in FY26-27. Wodgina will easily wipe its face and make some cash at that level. Mt Marion and Bald hill will eventually consolidate into a goldfield hub and spoke strategy - not much value in those assets at these prices (So happy to put a line through them for now).


I wouldn't mind Chris eating the humble pie here and selling some assets/raising capital to show that he listens to his critics. Thats the sign of a good corporate leader. Min Res will be just fine. I sleep easy buying more at $40.